The Effect of Corporate Governance Structure on the Relation between Tax Avoidance and Corporate Cash Holdings Level and Value

Lack of appropriate corporate governance structure can provide the opportunity of tax avoidance activities for managers. On the other hand, if investors aware from this action, they undervalue the corporate cash holdings. Therefore, this paper investigates the effect of corporate governance structure on relation between tax avoidance and corporate cash holdings level and value. The sample includes 68 firms listed in Tehran Stock Exchange in the period from 2004 to 2011. Results show that existence of strong corporate governance structure weakens the relation between tax avoidance and corporate cash holdings level and value.