Board Financial Expertise and Tax Avoidance of Listed Consumer Goods Firms in Nigeria
DOI:
https://doi.org/10.55677/GJEFR/07-2025-Vol02E1Keywords:
Board Financial Expertise, Tax Avoidance, Directors’ Financial Expertise, Effective Tax RateAbstract
The research examined the effect of board financial expertise on tax avoidance among publicly listed consumer goods companies in Nigeria. The specific objective was to investigate the degree to which directors’ financial expertise affects effective tax rate. The study employed an ex-post facto research design and included a population of 21 listed consumer goods firms, from which a sample of 15 firms was selected. Data was collected from the annual reports of these firms covering the period from 2014 to 2023, providing a total of 10 years of data. Prior to hypothesis testing, the data underwent several preliminary diagnostic tests, including descriptive statistics, test for normality, heteroskedasticity, linearity, and autocorrelation. Following these checks, the Robust Least Squares method was applied to test the study's hypotheses. The finding revealed that Directors’ financial expertise significantly and negatively affects tax avoidance of listed consumer goods firms in Nigeria (β = -0.040738; p-value = 0.0000). In conclusion, firms with directors possessing robust financial skills and knowledge tend to engage in less aggressive tax avoidance practices. Based on the significant negative effect of directors' financial expertise on tax avoidance, it is recommended that the boards of listed consumer goods firms in Nigeria actively prioritize the recruitment of directors with substantial financial expertise to ensure effective oversight and reduce the risk of tax avoidance behaviors, thus enhancing the firm's governance and tax compliance.
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