ASSESSMENT OF TAX AUDIT EFFECIVENESS: THE CASE OF ADDIS ABABA CITY GOVERNMENT REVENUE AUTHORITY LARGE TAX PAYER’S BRANCH OFFICE (BASED ON AUDITORS PERCEPTION)

Abstract

A tax audit examines whether a taxpayer has appropriately evaluated and declared their tax liability, as well as whether they have met their duties. One of the most successful policies for preventing tax evasion is a thorough tax audit. However, still ineffective tax audit program was engaged in Ethiopia. Based on this the study is to assess factors affecting tax audit effectiveness in Addis Ababa city government large tax payers branch revenue office. Descriptive research designs were used, and qualitative and quantitative research methods, to attain the study's goal. The study used a survey of questionnaire analysis. The Sample respondents selected for the entire set of all tax auditors study were 50 auditors and 47 were collected. Data analyzed on a quantitative basis using descriptive statistics. The results showed that tax audit attribute, audit quality, top management support, competency of staff auditors, have statistically significant influence and positive impact on assessment of the studied organizations on tax audit effectiveness. While organizational setting has a beneficial effect on tax audit effectiveness, it is statistically negligible. On the other hand, organizational independency has not significant influence on tax audit effectiveness. To reduce the negative impact of tax legislation on tax audit effectiveness, the organization should clarify tax laws and establish workable regulations.