<![CDATA[Accounting theory suggests that political environments affect accounting practice because the accounting numbers have social realities. Political cost hypothesis argues that firms in high media exposure tend to manage their income to minimize government intervention. In pre-election periods, government-owned enterprises tend to report the favorable accounting numbers to help incumbents who have another term to serve. Although literature documents that political events affect financial reporting, limited studies focus on the association between the presidential election and tax avoidance. Thus, this study aims to analyze the profitability and tax aggressiveness in State-Owned Enterprises (SOEs) presidential election in 2014 and 2019. In doing so, we focus on pre- and post-presidential elections to understand the different patterns between them. Pre-presidential elections are 2013 and 2018, and post-presidential elections are in 2014 and 2019. Using the Wilcoxon Signed Rank Test with Eviews software to investigate 25 SOEs (50 observations) listed on the Indonesia Stock Exchange (IDX) during two presidential elections, this study finds that there is no significant difference in the profitability and tax aggressiveness of SOEs before and after the presidential election in Indonesia. Our study implies that presidential elections do not affect the financial behavior of SOEs in Indonesia.]]>
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