Tax Planning, Conservatism Accounting and Business Risks to Company Value

Wawan Cahyo Nugroho

doi:10.24843/EJA.2025.v35.i07.p07

Authors

Wawan Cahyo Nugroho Faculty of Economics and Business, Universitas Indonesia, Indonesia

DOI:

https://doi.org/10.24843/EJA.2025.v35.i07.p07

Keywords:

Conservatism Accounting, Business Risk, Company Value, Tax Planning

Abstract

This study aims to examine the effect of tax planning, accounting conservatism, and business risk on company value. This study used 124 samples from 31 property companies listed on the Indonesia Stock Exchange in 2020-2023. The data analysis technique used multiple linear regression. The results of the study showed that tax planning had no significant effect on firm value. This is because aggressive tax planning can cause investors to lose confidence, thus reducing investment interest. Accounting conservatism has a significant positive effect on firm value because the principle of conservatism can reduce agency conflicts, allowing investors to make decisions based on the resulting financial statements, thus providing high value to the company. Business risk has a significant positive effect on firm value. This is because companies that are able to manage risk well demonstrate their resilience to market changes and flexibility, as well as the ability to overcome problems, thereby increasing confidence in the company's future.

Author Biography

Wawan Cahyo Nugroho, Faculty of Economics and Business, Universitas Indonesia, Indonesia

-

References

Ajiza, N., & Mar'ah, N. (2018). The Effect of Managerial Ownership and Institutional Ownership on Dividend Policy and Firm Value. Business Sketches, 5(2).

Alamsyah, MF, & Malanua, W. (2021). The Influence of Investment Opportunity Set, Corporate Social Responsibility, and Business Risk on Firm Value. Journal of Business Management Focus, 11(2), 154–172.

Angelina, S., & Darmawan, A. (2021). The Impact Of Tax Planning On Firm Value. Journal Of Applied Accounting, 6(2), 196–204.

Anggraeni, NR, & Mulyani, SD (2020). The Effect of Tax Planning, Managerial Ownership, and Profitability on Firm Value with Transparency as a Moderating Variable. KOCENIN Conference Series, 1(1), 5.11.1-5.11.10.

Apriantini, NM, Widhiastuti, NLP, & Novitasari, NLG (2022). The Effect of Profitability, Leverage, Liquidity, Managerial Ownership, and Company Size on Company Value. Jurnal Kharisma, 4(2), 190–201.

Arfan, M., Basri, H., Handayari, R., Shabri, M., Fahlevi, H., & Dianah, A. (2017). Determinants of Cash Holding of Listed Manufacturing Companies in The Indonesian Stock Exchange. DLSU Business and Economics Review, 26(2), 1–12.

Ariyantia, O. (2022). The Effect Of Accounting Conservatism And Financial Performance On Company Value (Case Study on Companies Conducting Mergers listed on the Sharia Stock. Indonesian Journal of Banking and Marketing, 2(2), 10–20.

Astuti, YD, & Fitria, GN (2019). The Effect of Tax Planning and Profitability on Firm Value with BOD Diversity as a Moderating Variable. Esensi: Journal of Business and Management, 9(2), 235–246.

Bagaskara, RS, Titisari, KH, & Dewi, RR (2021). The effect of profitability, leverage, company size, and managerial ownership on company value. Economic Forum, 23(1), 29–38.

Basuki, B., & Siregar, IG (2019). The Influence of Good Corporate Governance and Prudent Accounting on Company Value in Manufacturing Companies 2014-2017. Journal of Accounting and Finance, 3(2), 91.

Bhagiawan, G., & Mukhlasin, M. (2020). Effect of Corporate Governance on Tax Planning & Firm Value. International Journal of Commerce and Finance, 6(2), 72–80.

Chukwudi, UV, Okonkwo, OT, & Asika, ER (2020). Effect Of Tax Planning On Firm Value Of Quoted Consumer Goods Manufacturing Firms In Nigeria. International Journal Of Finance And Banking Research, 6(1).

CNBC Indonesia. (2022). Property Stocks on Sale Again, What's Going On? https://www.cnbcindonesia.com/market/20220112094646-17-306588/saham-properti-lagi-lagi-diobral-ada-apa-sih

Devi Silvia, S., & Paul E, S. (2022). The Effect of Tax Planning on Company Value in Listed Property and Real Estate Companies. Journal of Economics and Business, 15(1a), 1–17. https://jurnal.unai.edu/index.php/jeko/article/view/2809

Fadilah, R., & Afriyenti, M. (2020). The Influence of Intellectual Capital, Tax Planning, and Enterprise Risk Management Disclosure on Company Value. Accounting Research Institute, 8(1), 82.

Ginting, FG, Saerang, IS, & Maramis, JB (2020). The Influence of Business Risk, Financial Risk, and Market Risk on Company Value in State-Owned Banks for the Period 2011-2018. Emba Journal: Journal of Economics, Management, Business, and Accounting Research, 8(1).

Habibah, H., & Aisyah Margie, L. (2021). The Effect of Tax Planning and Accounting Conservatism on Firm Value. CREATIVE: Scientific Journal of Management Study Program, 9(1), 60.

Harahap, SS (2010). Critical Analysis of Financial Statements. Jakarta: PT. Raja Grafindo Persada.

Irawati, AE, & Komariyah, EF (2019). The Role of Capital Structure on the Effect of Dividend Policy and Business Risk on Firm Value (Evidence from Indonesian Manufacturing Company). The Indonesian Journal of Accounting Research, 22(2), 207–228.

Jensen, M. ., & Meckling, W. . (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. J. Financ. Econ, 3, 305–360.

Lestari, N. (2014). The Influence of Tax Planning on Companies. Journal of Accounting Science (Accountability), VII(no 1), 69–83.

Makmur, MI, Amali, LM, & Hamin, DI (2022). The Effect of Asset Growth and Business Risk on Firm Value in Manufacturing Companies in the Food and Beverage Sub-Sector Listed on the Indonesia Stock Exchange for the 2016-2020 Period. JAMBURA: Scientific Journal of Management and Business, 5(1), 140–147. https://doi.org/10.37479/jimb.v5i1.14262

Mediyanti, S., Kadriyani, E., Sartika, F., Astuti, IN, Eliana, E., & Wardayani, W. (2021). Tobin's Q Ratio as a Measure Tool for the Value of an Islamic Bank. JUPIIS: Journal of Social Sciences Education, 13(1), 242–247.

Meilany, I., & Hidayati, NW (2020). The Effect of Prudence and Tax Planning on Firm Value with Profitability as a Moderator. Journal of Business Disruption, 3(3), 67–88.

Mufida, N., Saifi, M., & Darmawan, A. (2020). The Influence of Intellectual Capital, Investment Opportunity Set on Financial Performance and Value of Food and Beverage Companies Listed on the IDX for the 2012-2016 Period. Business Sketches, 7(2), 84–93. https://doi.org/10.35891/jsb.v7i2.2146

Pohan, CA (2013). Tax Management: Tax and Business Planning Strategies (Revised Edition). Gramedia Pustaka Utama.

Ratri, AM, & Christianti, A. (2017). The Effect of Size, Liquidity, Profitability, Business Risk, and Sales Growth on Capital Structure in the Property Industry Sector. Journal of Management and Business Research, 12(1), 13. https://doi.org/10.21460/jrmb.2017.121.271

Risna, FA, & Haryono, S. (2023). The Effect of Tax Planning & Tax Avoidance on Company Value with Company Transparency as a Moderating Variable. Trisakti Accounting Journal, 10(2), 305–318. https://doi.org/10.25105/jat.v10i2.17104

Rizkiadi, N., & Herawaty, V. (2020). The Effect of Prudent Accounting, Profitability, Leverage, and Size on Firm Value Moderated by Good Corporate Governance (Empirical Study of Companies Listed on the Indonesian Stock Exchange (BEI) in 2016–2018). Proceedings of the National Expert Seminar, 2003, 1–8. https://doi.org/10.25105/pakar.v0i0.6900

Romadhina, A.P., & Andhitiyara, R. (2021). The Effect of Tax Planning, Sales Growth, and Dividend Policy on Firm Value. Journal of Information System, Applied, Management, Accounting and Research., 5(2), 358–366. https://doi.org/10.52362/jisamar.v5i2

Rosharlianti, Z. (2018). The Effect of Prudence and Family Ownership on Company Value with Dividend Policy as an Intervening Variable. JABI (Indonesian Journal of Sustainable Accounting), 1(1), 61–82. https://doi.org/10.32493/jabi.v1i1.y2018.p61-82

Suadnyana, IM, & Wiagustini, LP (2017). The Effect of Business Risk and Company Growth on Capital Structure and Company Value. Management Forum, 11(1), 100–108. https://doi.org/10.61938/fm.v11i1.53

Suryati, & Setyawati, W. (2024). The Effect of Financial Distress, Capital Intensity, and Tax Planning on Company Value (An Empirical Study of Energy Companies Listed on the Indonesia Stock Exchange in 2018-2022). Journal of Economics, Management, and Accounting, 2(5), 437–453.

Susilo, A., Sulastri, S., & Isnurhadi, I. (2018). Good Corporate Governance, Business Risk, and Financial Performance on Firm Value. Journal of Business Economic Analysis, 16(1), 63–72. https://doi.org/10.31603/bisnisekonomi.v16i1.2132

Verawaty, V., Merina, CI, & Kurniawati, I. (2016). Analysis of Corporate Value Development Based on Investment and Financing Decisions, Ownership Structure and Dividend Policy in Manufacturing Companies Listed on the Indonesia Stock Exchange. Indonesian Accounting and Finance Periodical, 1(1), 15–34.

Warno, W., & Fahmi, U. (2020). The Effect of Tax Avoidance and Agency Costs on Firm Value with Audit Quality as a Moderating Variable in Lq45 Companies. EL Muhasaba Journal of Accounting, 11(2), 188–201. https://doi.org/10.18860/em.v11i2.9225

Warseno, Dharmendra, & Susmita Handayani. (2022). The Effect of Accounting Conservatism and Accounts Receivable Turnover on Firm Value with Corporate Governance as a Moderating Variable. Jurnal Buana Akuntansi, 7(1), 39–62. https://doi.org/10.36805/akuntansi.v7i1.2103

Watts, R.L. (2003). Conservatism in Accounting Part I: Explanations and Implications (17th ed.). Accounting Horizons. https://doi.org/http://dx.doi.org/10.2308/acch.2003.17.3.207

Widiyati, D., & Lukmana, F. (2024). The Effect of Deferred Tax Expense, Tax Planning, and Intellectual Capital on Company Value. CEMERLANG: Journal of Management and Business Economics, 4(2), 212–223. https://doi.org/10.55606/cemerlang.v4i2.2733

Wiharno, H., Hamzah, A., & Pangestu, RH (2023). Determinants of accounting conservatism. Global Financial Accounting Journal, 07(01), 14–27. https://journal.uib.ac.id/index.php/gfaDOI:http://dx.doi.org/10.37253/gfa.v7i1.7252Web:https://journal.uib.ac.id/index.php/gfa/article/view/7252http://dx.doi.org/10.37253/gfa.v7i1.7252

Wiksuana, IGB (2016). Saraswathi Wiksuana Rhyuda. 2016, 6, 1729–1756.

Wirjawan, RS (2022). The Influence of Business Risk and Other Factors on Firm Value. E-Journal of Accounting, 2(2), 971–988.

Yuono, C., & Widyawati, D. (2016). The Effect of Tax Planning and Corporate Governance on Company Value. Journal of Accounting Science and Research, 5(6), 1–19. http://ejournal.upi.edu/index.php/JRAK/article/view/7708

Yuwono, W., Sonata, V., & Hesniati. (2024). Analysis of the Influence of Profitability, Debt, CSR, Capital Structure, and Company Size on Company Value in Various Industries. Business Sketches, 10(2), 254–268. https://doi.org/10.35891/jsb.v10i2.4502

Zulfiara, P., & Ismanto, J. (2019). The Effect of Accounting Conservatism and Tax Avoidance on Firm Value. JABI (Indonesian Journal of Sustainable Accounting), 2(2), 134–147. https://doi.org/10.32493/jabi.v2i2.y2019.p134-147