THE EFFECT OF COMPANY CHARACTERISTICS, AUDIT QUALITY, AND TAX PLANNING ON BOOK TAX DIFFERENCES (BTD) AND IMPACT ON PERSISTENCY OF PROFIT

Abstract

This study aims to examine and analyze the effect of company characteristics, audit
quality, and tax planning on book tax differences (BTD) and their impact on earnings
persistence. The population in this study are companies listed on the Indonesia
Stock Exchange (IDX) in the 2014-2016 period. While the samples chosen were
foreign investment companies (PMA). The sampling technique used purposive
sampling method, the researcher determined as many as 28 companies with a total
observation of 84 samples. Data analysis was performed with multiple linear
regression models and independent sample t test with the help of SPSS version
21.0 software. The results of the study show that profitability and tax planning affect
book tax differences (BTD). While leverage, liquidity, and audit quality do not affect
book tax differences (BTD). Furthermore, for the second model, the results obtained
that permanent differences affect the persistence of earnings. However, for
temporary differences does not affect the persistence of earnings. From the results
of the independent sample t test showed that in the first model the percentage of the
influence of the independent variable on the dependent variable was 83.4%.
Whereas in the second model, the percentage effect of variables on the dependent
variable is 12.1%.