Account Receivable Flow Test to Prove Real Sales Case: A Study Case of a Tax Court Decision in Indonesia

Abstract

The data in the financial statements and the corporate tax return must be supported by accurate and valid evidence. When the Directorate General of Taxation (DGT) as a tax authority in Indonesia conducts a tax audit by an account receivable flow test (ARFT), the taxpayer net sales can be corrected to be larger due to a lack of evidence. This paper applied a case study of a tax court decision in Indonesia by a desk-based literature study. The DGT audited a taxpayer and produced a stipulation of additional taxable income. The taxpayer did not agree with the provision and the taxpayer filed an appeal to the tax court. This paper finds the taxpayer’s unorganized and inaccurate bookkeeping leads the judges to reject the taxpayer’s appealing.

The Effect of Financial Distress, Audit Committee, Auditor Switching, and Industry Types on Audit Delay in the Covid-19 Pandemic of Companies Listed on the Indonesian Stock Exchange’s KOMPAS100 Index

“…Agency theory was used for the first time by Jensen and Meckling in 1976, where they explained the agency relationship as a contract between one or more people as principal hiring another person as an agent to do a job or service for the principal's interest and give them authorities to make the best decision for the principal (Hoesada, 2020). The agency theory appears when the business is not directly managed by the shareholders, and all management responsibility is allowed to the manager (Santoso, 2021). This theory implicates the information asymmetry by different interests between principal and agent (Hakim & Sagiyanti, 2018).…”

“…The formation aims to assist the board of commissioners in oversight function and become one of the main pillars in the application of good corporate governance (GCG) principles. There is a mutual relationship between governance, auditing, and financial reporting (Santoso, 2021). The audit committee oversight minimizes the obstacles in compiling financial statements as it increases the timeliness in publishing the financial statements and decreases the audit delay (Purnami et al, 2019).…”