A Multidimensional Framework for Understanding Tax Audit Effectiveness in Developing Countries


  • Mohammed Abdullahi Umar Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
  • Chek Derashid Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
  • Oluwatoyin Muse Johnson Popoola Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia


Tax audit, developing countries, audit probability, detection, sanction


Taxation in developing countries is different from the practice in advanced countries. There is, therefore, the need to contextualize tax research in developing countries. One of the significant differences between the two regions is the practice of tax audits. In advanced countries, the probability of tax audit is seen as a deterrence to tax noncompliance. However, this study argues that this may not be the case in developing countries. The paper presents tax audits in developing countries as a three-dimensional process consisting of audit probability, detection and sanction. The paper argues that these three aspects are distinct and must all work together to ensure an effective audit. For instance, after an audit, there is a need for detection to take place. Otherwise, the entire process will be ineffective. Furthermore, after detection, there is a need for sanction before the audit process can serve as a deterrent. Detection without sanction renders the entire process ineffective. In developing countries, audits can take place without detection and detection may occur without any sanction because tax evaders can compromise the system through bribery and corruption. The paper makes a significant contribution both to the literature and practice. There is a need for researchers to focus on the three dimensions of tax audit in developing countries rather than a holistic audit probability, as found in some studies from advanced countries. Additionally, practitioners should measure tax audit effectiveness based on the three dimensions proposed in this study.


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How to Cite

Umar, M. A., Derashid, C., & Popoola, O. M. J. (2019). A Multidimensional Framework for Understanding Tax Audit Effectiveness in Developing Countries. Indian-Pacific Journal of Accounting and Finance, 3(2), 4-14. Retrieved from http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/72



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