TAX AUDIT QUALITY: AN EMPIRICAL ANALYSIS OF THE USE OF INFORMATION TECHNOLOGY, COMPETENCE, TASK COMPLEXITY AND TIME PRESSURE

Abstract

One of strategies conducted by tax authority to fulfil its tax revenue target is improving audit quality. To do so, this research was designed to analyze the empirical evidence related to factors in the use of information technology, tax auditor’s competencies, task complexity, and time pressure that could potentially affect the quality of tax audit. The research was carried out by using an online survey followed by 96 tax auditors in Tax Offices in the Special Jakarta Region, with fifteen years of tax audit experience on average. The research data were analyzed by using Partial Least Square-Structural Equation Modeling procedures. The results indicate that the factors of information technology in terms of usefulness, ease of use of technology, and support of technological resources are positively associated with tax audit quality. Tax auditor’s competencies in the aspects of knowledge and skills also indicate positive relations. Meanwhile, the factors in time pressure that could deter the evaluation of evidence, implementing procedures, and detection of tax non-compliance have negative consequences on tax audit quality. The implications of these findings for tax authorities are the urgency in improving information technology that keeps pace with the latest business process to support tax audit, improving tax auditors’ competencies continuously, and managing tax audit time