FACTORS AFFECTING TAX AUDIT EFFECTIVENESS IN THE CASE OF CATEGORY “A” TAX PAYERS IN GONDAR TOWN ADMINISTRATION REVENUE OFFICE

Abstract

Tax Audit is essential for revenue authority and auditee as a whole to improve their efficiency and effectiveness through constructive criticism based on the audit finding. General objective of the study is to investigate factors affecting tax audit effectiveness on category “A” taxpayers. The main problem which initiates the researcher to conduct the research was diminishing tax audit performance of Gondar town revenue administration year to year. In order to select samples from the total population simple random sampling technique was applied. This study employs a cross sectional survey to investigate the effectiveness of Tax audit. Several statistical techniques such as the descriptive statistic, correlation and regression analysis were used to analyze the data from the survey. The result of the study showed that there were significant positive relationships among the factors analyzed in this study such as auditors’ independence, top management support, competency of tax auditors and auditee attribute to the effectiveness of tax audit. Thus, the investigated factors in this study will strongly contribute to the effectiveness of tax audit.