The Divergent Effects of Chief Accountant Characteristics on Tax Avoidance: Evidence from Vietnam

Abstract

Purpose: This study investigates the impact of chief accountant characteristics on tax avoidance in different contexts. Design/methodology/approach: We utilize panel data from Vietnamese listed firms covering the period 2006 to 2020 and apply both fixed effects (FE) and system generalized method of moments (GMM) estimation techniques. Findings: First, we find that female chief accountants and chief accountants with a PhD degree lead to reduced tax avoidance, but chief accountant tenure and chief accountant ownership increase tax avoidance. Second, we find that a higher chief accountant's age negatively affects tax avoidance in high tax avoidance firms but positively affects tax avoidance in low tax avoidance firms. Finally, this study provides strong evidence that foreign ownership reduces the negative effects of female chief accountants on tax avoidance but strengthens the positive effects of chief accountant tenure and chief accountant ownership on tax avoidance; by contrast, state ownership increases the negative effect of female chief accountants but reduces the negative (positive) effect of chief accountant knowledge (chief accountant ownership) on tax avoidance. Research limitations/implications: This study provides theoretical insights into the effects related to the role of a chief accountant in controlling tax avoidance. Practical implications: Our findings offer important implications for shareholders and regulators in managing tax avoidance by considering the characteristics of chief accountants. Originality/value: This is the first study to explore the important role of chief accountants in tax avoidance practices of firms in countries where the chief accountant decides the accounting process and is responsible for the quality of financial statements.