Auditors Role in Ensuring Tax Compliance: Insights into Tax Audits and Regulatory Adherence

Riyan Wibowo

doi:10.69725/raida.v1i2.165

Authors

Riyan Wibowo a. Department of Accounting, Faculty of Economics, Universitas Muhammadiyah Surakarta, Surakarta, Indonesia

DOI:

https://doi.org/10.69725/raida.v1i2.165

Keywords:

Audit quality, Tax Compliance, External auditors, Regulatory complexity, Audit Technology

Abstract

Objective: The extent of tax compliance by using audit quality, type of audit, technology, and tax compliance complexity, as well as the numbers of tax audit are the objectives of the study in addition to the role of auditors in this regard.
Methods: We designed a structured survey that was administered to auditors and tax officials to collect data on their audit practices, compliance behaviors and perceptions of regulatory complexity. Hypothesis testing was performed on the data by using multiple regression analysis.
Results: The findings demonstrate that audit quality and the use of external auditor positively affect taxpayer adherence. Moreover, tax regulatory complexity was discovered to harmfully moderate the association between audit effectiveness and tax compliance. This emphasis on audit technology dramatically improved the audit process and provided favorable compliance results. Furthermore, entities monitored regularly complied at significantly higher rates than those audited irregularly.
Novelty: This study adds to the literature by combining the theories of modern audit technologies and regulatory complexity in an investigation of tax compliance. This also advance our understanding of external vs internal auditor effects to compliance levels, especially for a developing country taxation system like Indonesia.
Research Implications: The study highlights the need for tax regulators to reduce tax complexities and invest in innovative tax audit technologies in a bid to improve tax compliance. Regular audits and particularly the introduction of external audits could further help to bolster the tax compliance framework, the study added. Emerging technologies such as Artificial Intelligence (AI) and blockchain can transform tax audits and compliance monitoring, which could be a topic for further research.

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Author Biography

Riyan Wibowo, a. Department of Accounting, Faculty of Economics, Universitas Muhammadiyah Surakarta, Surakarta, Indonesia

Riyan Wibowo., S.Ak., M.Ak

Department of Accounting, Faculty of Economics, Universitas Muhammadiyah Surakarta, Surakarta, Indonesia

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