Open Access
American Research Journal of Business and Management
ISSN (Online): 2379-1047
DOI: 10.46568/arjbm
Tax Audit Quality in Ethiopia: The Case of Ministry of Revenues
1Assistant Professor, Ph.D. Candidate, Department of Public Financial Management and Accounting, Ethiopian Civil Service University, Ethiopia.
2Associate Professor, Director, School of Graduate Studies, Ethiopian Civil Service University, Ethiopia.
3Assistant Professor, Dean, College of Finance, Management and Development, Ethiopian Civil Service University, Ethiopia.
Shemelis Zewdie, Amsalu Bedemo, Lemessa Bayissa, “Tax Audit Quality in Ethiopia: The Case of Ministry of
Revenues”, American Research Journal of Business and Management, Vol 7, no. 1, 2021, pp. 1-9.
Abstract
The purpose of this study was analyzed the tax audit quality in Ethiopia with special reference to the Ministry of Revenues.
Accordingly Mixed research approaches with concurrent triangulation mixed research design were used in the study.
Questionnaires were used to obtain the primary data from 217 out of 472 auditors, including team leaders, process owners,
and supervisors in the Ethiopian Ministry of Revenues by using proportionate stratified random sampling in addition to
semi-structured interviews from 15 participants from management positions. The secondary data were obtained from
the ministry and the audit report. The data were analyzed using mean, standard deviation and Spearman rho value.
Findings related to tax audit practices show that the current tax audit practices are moderate, they do not apply for an
adequate audit program, pre-audit and risk analysis, audit methodology, sampling, detailed audit objectives, and audit
verification process. In addition to that, almost in all tax audit branch offices, auditors lack understanding about the
nature of the taxpayer’s business, and somewhat lack of understanding and interpretation of tax laws and regulations as
well as recognized standards. The Spearman rho values indicated that there is a positive correlation between audit input
factors, interaction factors, contextual factors, or tax audit effectiveness and tax audit quality. The study suggests that
the tax auditors, as well as the management and executive bodies in different positions, need to help each other and fulfill
their responsibilities to avoid similar enforcement of tax disputes. In addition, the tax audit engagement teams, team
leaders, supervisors, process owners, directors, branch managers, professional bodies, and regulators should give more
attention to the audit process and input factors following contextual factors because they were imperative constructs of
tax audit quality.
