ASSESSMENT OF TAX AUDIT PRACTICE THE CASE OF ETHIOPIAN REVENUES & CUSTOMS AUTHORITY EAST ADDIS DISTRICT

Abstract

This study assesses tax audit practice in Ethiopian Revenues and Customs Authority (ERCA)-Eastern Addis District. The study aims to assess tax audit practice: to investigate the tax audit looks like the experience and capability of auditors participated in tax audit practices as required by international standards. To conduct the study, the researcher used both primary and secondary data sources through questionnaire, interview and documentary review from target population of tax auditors. The study has employed descriptive types of research; both qualitative and quantitative research design has used in order to make the study meaningful. The researcher takes the entire target population (census) in order to achieve the research objectives and to answer research questions. Specifically, the techniques used in the study include survey with tax auditors and investigators, in-depth interviews with tax officials, and documentary analysis. The findings shows that poor working condition, poor remuneration and lack of motivational incentives, lack of training, insufficient public awareness, continuously high turnover, lack of follow-up, ineffective utilization of IT and unclear data in SIGTAS, were expressed as the major problems of tax audit activities. The study recommends that ERCA-East Addis District to give more attention for the tax auditor continuous training should be provided, working condition should be improved and good salary structure should be set for tax officials. Also, need to employ positive relationship among tax audit quality, organizational independence, tax audit effectiveness, competent and qualified staff with background knowledge of accounting and tax discipline. The study suggests that Auditors need to audit smarter which can be accomplished by the need for auditors to be more aware in context which the audit occurs and the fact that the nature and concentration of fraud varies by industry and auditors should be aware of the development of their profession.