Tax Auditing in Electronic Environment
This course was delivered as part of the Tax Policy and Administration Learning Program primarily supported by the Dutch Ministry of Finance and the Ministry of Finance of Slovenia. The overall objective of the program is to contribute to strengthening of beneficiary institutions’ capacity in implementing the EU recommendations under which the revenue authorities can deliver tax compliance risk management.
What participants learned
Rapid developments in information technology have not only had an impact on assessing tax liability and collecting revenue but also on the tax administrations’ ability to identify the growing number of taxable transactions that take place in the cyberspace. The traditional brick and mortar structures that were compulsory for dealers to register under value added tax laws are gradually fading and it is becoming more challenging for the tax authorities to identify the legal “person” for tax compliance purposes. This causes countries to lose revenues. In this context, it is imperative to sharpen tax officials' auditing skills to keep pace with the needs of a constantly changing business environment.
The workshop looked into ways how tax authorities are responding to the digitalization of taxpayers accounting information systems to keep up to date with the audit techniques in electronic environments and to optimize the value of their audit work. It explored the prerequisites essential to the success of e-auditing, addressed the importance of the holistic training approach based on appropriate audit methods, the role of data analysis and the use of innovative computer-assisted audit tools (CAAT’s).
The workshop also addressed work environment changes triggered by the implementation of e-taxation systems, increased data collection and possibilities to analyze this data, along with ways of adapting to the rise of new electronic accounting information systems and electronic transaction (cash) registers.
How participants benefited
This learning initiative applied participatory learning design, combining subject matter presentations with group work activities designed to optimize learning outcomes. As such it promoted learning through engagement and personal experience while also putting special attention to leveraging on the experience and expertise of participants.
In particular participants learned about:
- General IT controls and their impact on audits
- More efficient techniques for reviewing taxpayer information used in electronic audits
- Understanding the impact of an IT environment on an audit
- Improving compliance activities (cross-border issues, e.g. related to online shopping)
- The prerequisites of effective tax audit (appropriate audit methods, software and training)
- The importance and role of strong tax legislation
- IT and international developments and their impact on compliance
Suggested reading materials was also made available on our online platform a few weeks before the start of the event to help participants prepare for their active involvement and contributions to the successful attainment of event’s objectives.
This learning initiative was designed for mid to senior level tax officials involved and/or having experience with the e-taxation systems, risk analysis, data-mining, supervision, control and/or audit functions within their administrations.
Participants were expected to take an active part in the event’s activities. The success of the learning initiative was directly dependent on the participants’ active engagement in the discussions and group work.
Ms Saskia Carstens, Accountant and Client Coordinator, Ministry of Finance, the Netherlands
Mr Thimo Bouten, Junior Accountant, Ministry of Finance, the Netherlands
No fee was charged for officials working in the public sector.
The costs of travel and accommodation for two participants from Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Macedonia, Moldova, Mongolia, Montenegro, Romania, and Ukraine were covered by the Dutch Ministry of Finance. Proposed candidates were approved by the CEF.
Additional participants from the above mentioned 11 countries or those applying from other CEF constituency (Albania, Kosovo, Serbia, Slovenia and Turkey) were sponsored by other sources, e.g. their sending or sponsoring institutions.
Applicants were approved and selected by the CEF.
This learning initiative was supported by: