Investigating the Moderating Role of Audit Quality on the Effect of Corporate Social Responsibility on Tax Aggressiveness Using Static and Dynamic Approaches

Shamgani, Reza; Azhdar, Mohsen; Tirbakhsh Gouran, Souror

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year 17, Issue 68 (2026)

fa 2026, 17(68): 83-106

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Investigating the Moderating Role of Audit Quality on the Effect of Corporate Social Responsibility on Tax Aggressiveness Using Static and Dynamic Approaches

Reza Shamgani¹

, Mohsen Azhdar ^*¹

, Souror Tirbakhsh Gouran¹

1- Department of Accounting, Shk.C., Islamic Azad University, Shahrekord, Iran.

Abstract: (313 Views)

The aim of this study is to investigate the effect of corporate social responsibility (CSR) on tax aggressiveness and the moderating role of audit quality in this relationship, within the framework of companies' implicit tax contracts with the government, among firms listed on the Tehran Stock Exchange. To test the research hypotheses, financial data of 113 companies listed on the Tehran Stock Exchange were selected using a systematic sampling method for a ten-year period from 2015 to 2024, and were statistically analyzed using panel data regression in both static and dynamic approaches, employing Stata software version 17. Furthermore, to measure audit quality, two components were utilized: financial statement restatement and audit fees. The findings indicate that corporate social responsibility has a significant negative effect on tax aggressiveness. Moreover, the significant negative coefficient of the interaction effect (CSR × audit quality) in both dimensions suggests that audit quality intensifies the negative relationship between CSR and tax aggressiveness. In other words, in firms with higher audit quality (higher audit fees and no restatement), the negative effect of CSR on tax aggressiveness becomes stronger. These findings demonstrate that audit quality, as a formal monitoring mechanism, along with corporate social responsibility as a voluntary governance mechanism, operate synergistically and provide the groundwork for reducing opportunistic tax behaviors. The present study is innovative in three respects: First, unlike previous studies in Iran that have predominantly examined the direct relationship between corporate social responsibility and tax aggressiveness, this study considers audit quality as a moderating variable and investigates the interaction between two voluntary and formal monitoring mechanisms. Second, by simultaneously employing both static and dynamic approaches and controlling for the effect of tax inertia, it takes into account, for the first time in the domestic literature, the dynamic and memory-based nature of corporate tax behavior. Third, by empirically testing two complementary and substitution scenarios in Iran's institutional context and providing evidence of a complementary mechanism, it enriches the literature on implicit contract and economic deterrence theories in environments with concentrated ownership structures.

Article number: 5

Keywords: Corporate Social Responsibility, Tax Aggressiveness, Audit Quality, Static and Dynamic Approaches.

Full-Text [PDF 615 kb] (104 Downloads)

Type of Study: Research | Subject: Special

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Shamgani R, Azhdar M, Tirbakhsh Gouran S. Investigating the Moderating Role of Audit Quality on the Effect of Corporate Social Responsibility on Tax Aggressiveness Using Static and Dynamic Approaches. fa 2026; 17 (68) : 5
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