M.A. Thesis:

Overconfidence managers and tax avoidance: more interactive role in ensuring managers and the operational Nqzd

Overconfidence of the managers is a personality trait and character among the managers which affects both on the decision making in respect of the investment as well as on selecting their financial reporting. The pseudo-confidence of the managing director plays a significant role in the policy making procedure and the strategic decision making of the companies. This survey intends to study the interactive effect of the managers' overconfidence and overconfidence in operating cash flow on the tax avoidance of the companies admitted at the Tehran Stock Exchange. To do so, the data of 110 companies active in the Stock Exchange during the years: 2011 till 2015 were gathered and analyzed using the Eviews statistical forecasting software. According to the research findings and the statistical tests at the error level of p=5%, it can be said that there is a positive and significant correlation between the managerial overconfidence and the interactive effect of the overconfidence as compared to operating cash flow and tax avoidance. In fact, managerial overconfidence, through maximum estimation of saving tax in tax planning, minimum estimation of expenses imposed due to the over-investment in tax planning and / or a combination of both give rise to the investment rate in tax reduction plans which in itself leads to a rise in tax avoidance. However, there is no significant correlationbetween overconfidence in operating cash flow and tax avoidance.

Keywords: Tax Avoidance, Managerial Overconfidence, Overconfidence in Operating Cash Flow.