Representation fees and tax avoidance with emphasis on institutional shareholders and discount auditing fees

Tax payments are one of the major costs incurred by individuals and businesses as a result of their income-generating activities. Tax avoidance is a risky activity that can hurt shareholders. In companies with high agency costs, the manager does not act in the interests of the shareholder, which increases tax avoidance, but having a large shareholder reduces the agency issue and, consequently, reduces tax avoidance. On the other hand, auditors reduce their audit hours and effort by receiving an audit fee, which in turn increases agency costs and tax avoidance. But in the absence of appropriate scientific and empirical evidence, the present study examines agency costs and tax avoidance with an emphasis on institutional shareholders and auditing fee reductions. In this regard, samples including 130 companies listed on the stock exchange during the period 2013-2018 have been selected and tested. The results using multivariate regression method show that agency cost has a significant relationship with tax avoidance and auditing fee reduction intensifies the relationship between agency cost and tax avoidance. But institutional shareholders do not moderate the relationship between agency costs and tax avoidance.