Factors Affecting Tax Audit Effectiveness: The Case Of West Showa Zone Revenue Authority

Abstract

The purpose of this study was to investigate factors affecting tax audit effectiveness the case of West Shoa Zone revenue authority. In light of this objective the study adopted quantitative research approaches and descriptive research design. Both primary and secondary sources of data have been used in this thesis. The primary data was collected through questionnaire and secondary data was collected from the case authority’s annual financial reports. The target populations of the study were the revenue authority’s officials and category “A” tax payers. Simple random sampling method was used to select the respondents from the entire population. Descriptive statistics and regression analysis used to undertake the statistical operations. The findings of the study showed that institutional factors, audit case selection and training were significantly and positively affected tax audit effectiveness in West Shoa Zone Revenue authority. Moreover, audit techniques were positively related to tax audit effectiveness but its contribution for audit effectiveness were statistically not significant. All of these four independent variables are making 57% of contribution for tax audit effectiveness. The West Shoa Zone Revenue Authority should understand that the contributions of these variables were collectively significant to identify any noncompliance activities in their authority and to add values for the tax audit effectiveness needs to give special attention and work on it