Applied Research in Financial Reporting

Applied Research in Financial Reporting

The Mediating Role of Corporate Social Responsibility in the Impact of Tax Avoidance, Evasion, and Corruption on Fraudulent Reporting

Document Type : Original Article

Authors
1 shahid bahonar univresity of kerman
2 Faculty of Management and Economics, Shahid Bahonar University of Kerman
Abstract
Fraudulent reporting is a critical challenge in financial management, posing a serious threat to financial integrity and investor trust. Companies often engage in financial manipulation practices such as tax avoidance, tax evasion, and tax corruption, which can significantly increase the prevalence of fraudulent reporting, as these practices frequently involve intentionally misleading information to conceal financial issues. Among these challenges, the role of corporate social responsibility (CSR) emerges as a key factor. This research examines whether a commitment to CSR can serve as a deterrent in the relationship between these harmful tax practices and fraudulent reporting. To address this, the study uses data from 146 publicly traded companies(1460 years-firm) from 2013 to 2022 and employs regression, logistic models, and the mediation approach of Baron and Kenny (1983) to analyze the complex patterns between corporate tax practices, fraudulent reporting, and CSR disclosure. The findings indicate that the use of tax avoidance, tax evasion, and tax corruption practices leads to increased fraudulent reporting. Furthermore, CSR plays a mediating role and mitigates the increase in fraudulent reporting caused by tax avoidance, tax evasion, and tax corruption. This study highlights the significant mediating role of CSR in the relationship between tax activities and fraudulent reports, emphasizing the importance of integrating CSR practices into corporate governance to address tax evasion, corruption, and fraudulent reporting.
Keywords

  • Receive Date 08 June 2024
  • Revise Date 30 October 2024
  • Accept Date 04 November 2024