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The purpose of this study is to shed light on the relationships between the different types of ownership structure and tax avoidance activities and examine the moderating effect of audit quality.

This study used secondary data from the listed companies in Amman Stock Exchange (2009–2020). To obtain additional robust findings, this study used various proxies for measuring tax avoidance (effective tax rate [ETR] and cash flow effective tax rate [CFETR]).

Relying on various proxies for tax avoidance, the results reveal that family and managerial ownership lead to exacerbating tax avoidance activities. Although institutional and board ownership have a positive impact on ETR and CFETR, which indicate that these type of ownership have a negative impact on tax avoidance. Audit quality also has a significant role in moderating the ownership structure–tax avoidance relationships. Besides, the results reveal that audit firm size is not merely symbolic words, but it contributes to reducing and restricting tax aggressiveness.

This study has policy implications related to the policymakers in creating future tax policies to minimize and avoid tax avoidance activities. Results of this study can be used to improve awareness among the various owners and to reduce the tax avoidance practices in the developing countries. It also determines a good agenda for research in the relationships between ownership identities, audit quality and tax avoidance, which also can be used to encourage and guide future studies.

This research extends the existing literature by examining both the direct and indirect influence of ownership structure on tax avoidance in Jordanian firms by including audit quality as a moderating variable. This is a pioneering and unique study examining the joint influence of the different forms of ownership on tax avoidance. To the best of the author’s knowledge, this study is the first of its kind that examines the interaction influences between the various identities of ownership and audit quality on the tax avoidance activities in the Jordanian context.

This study aims to investigate the effect of the ownership structure types on the indicators of the external audit quality, in the light of the weak legal protection of the shareholders.

This study used the panel data of 94 listed Jordanian companies from 2009–2018 and the fixed-effect method.

The results revealed a significant relationship between the directors’ ownership, family and institutional ownership with the audit quality. By contrast, the managerial ownership had an insignificant influence on audit quality.

The results show the important role played by the directors’ and institutions’ ownership in ensuring the audit quality in Jordan. The results have implications for the policymakers in Jordan, to encourage and support the participation of such types of the investors and provide an effective monitoring over other types of ownership in the Jordanian capital markets.

This study suggests that the ownership structures are an essential and effective determinants of the external audit quality, which ultimately affects the performance and financial statements.

These results are consistent with prior studies, which have indicated a significant relation between ownership structure and the demand of the audit quality, even in a setting where legal protection of the shareholders plays essentially no role. To the best knowledge of the researchers, this study is one of the few studies that separates the ownership by the directors into two separate types. Further, this is the first study that used several indicators to measure the audit quality at the same time.