Corporate tax avoidance during the COVID-19 pandemic and the moderating role of audit firm tenure: evidence from Thailand

PurposeThis study aims to examine whether the COVID-19 pandemic impacts corporate tax avoidance and whether audit firm tenure moderates the relationship between the COVID-19 pandemic and corporate tax avoidance.Design/methodology/approachThis paper analyzes data from companies in Thailand during the 2018-2021 period. Corporate tax avoidance is measured using the cash effective tax rate, calculated as total cash taxes paid divided by pretax income for that year. Audit firm tenure is assessed using two measures: (1) the number of consecutive years a company has engaged the same audit firm and (2) a dummy variable indicating whether audit firm tenure exceeds six years, the median tenure value.FindingsThe results show a positive association between corporate tax avoidance and the COVID-19 pandemic. In addition, audit firm tenure reduces corporate tax avoidance during the COVID-19 pandemic.Originality/valueThe findings provide practical insights and have direct policy implications, offering regulators valuable guidance on audit firm rotation and governance frameworks. Regulators and policymakers can leverage audit firm tenure to mitigate corporate tax avoidance behaviors, thereby enhancing corporate accountability, transparency, and public trust.