Artificial intelligence and corporate governance: strengthening oversight mechanisms to mitigate tax avoidance

Abstract

Purpose This study aims to explore the contribution of artificial intelligence (AI) on strengthening corporate governance mechanisms to mitigate corporate tax avoidance, with implications for transparency, accountability and ethical corporate conduct. By triangulating the agency theory, institutional theory and technology acceptance model, it explores the role of AI-driven systems in supporting internal control, board oversight and compliance functions within firms. Design/methodology/approach This study uses a qualitative approach, based on 23 semi-structured interviews with tax auditors, inspectors, financial experts and digital specialists. Data was analyzed using IRAMUTEQ software (Reinert method), identifying lexical clusters related to the transition from manual to AI-based oversight. Findings The analysis reveals that AI integration contributes to strengthening oversight mechanisms, fostering information transparency, enabling effective fraud detection and shifting to a continuous monitoring. However, the implementation is moderated by barriers related to the organizational, legal and ethical context. This study suggests that AI serves as a catalyst for governance, enhancing accountability and providing real-time, high-quality data to inform law-abiding and responsible decision-making, especially when supported by robust structural factors. Research limitations/implications This study is limited by its focus on the Moroccan context; although the findings may be applicable to comparable developing economies, the qualitative design may constrain further generalization. Future research could adopt comparative, longitudinal or mixed-methods approaches to assess the long-term effects of AI on corporate governance, tax compliance and ethical reporting practices. Practical implications This paper offers guidance for corporate boards, regulators and policymakers on leveraging AI to strengthen oversight, risk management and ethical compliance. It emphasizes the need for mandating digital governance literacy and ethical framework by the boards to ensure responsible monitoring. It also calls for authorities to enforce explainable AI standards to prevent the black box paradox of algorithms. Originality/value This study contributes to corporate governance and tax literature by clarifying the regulatory, ethical and organizational implications of AI adoption, offering new evidence from the Moroccan context where AI regulation is being implemented. It also proposes the “AI-Augmented Tax Governance framework” for firms to ensure a strategic and ethical integration of AI into their governance structures, positioning AI as a transformative tool for enhancing compliance, decision-making and risk management.