The Impact of Using Analytical Procedures on Reducing the Cost of Tax Audit "The Jordanian Income and Sales Tax Department"

Abstract

The study aimed to exam the impact of using the analytical procedures on reducing the cost of a tax audit in the Jordanian Income and Sales Tax Department. To achieve the aim of the study, the analytical descriptive approach has been used and a questionnaire has been designed and given out to the study sample, which represented from the auditors of Directorate of senior taxpayers and directorates of medial taxpayers in the income tax department and sales who work in these directorates. The appropriate statistical methods have been used to find results.
 
 The findings showed that using the analytical procedures led to reducing the cost of a tax audit in all auditing stages. The stage, which has the most impact of using the analytical procedures on reducing the cost, is the final auditing stage followed by the planning stage and the implementation (fieldwork) stage.
 
 The study recommended the necessity of compulsion of the auditors in tax department to use the analytical procedures because it reduces the cost of tax auditing and the necessity of holding workshops and training programs to define the importance of analytical procedures in tax auditing.

Small firm auditing using the analytical procedures (APs) in a politically challenging context

“…Results in Table 7 are consistent with similar politically unstable environments (Mansour and Kalib, 2019; Samaha and Hegazy, 2010; Awadallah and Elsaid, 2020). The Palestinian auditors believe in the effectiveness of the APs in achieving the audit objectives, with significant differences between the perceptions of the Big-4 and non-Big-4 auditors.…”

“…520, 2018). Thus, APs require multiple stages to get a solid result (Mansour and Kalib, 2019). Professional and environmental knowledge, experience and education are needed for effective implementation of APs (Cho and Lew, 2000).…”

“…APs contain different tools, techniques and procedures – ranging from simple to sophisticated – aimed at obtaining useful conclusions or detecting unexpected data that direct auditors’ attention to complex organisational areas and control deficiencies (ISA. 520, 2018; Mansour and Kalib, 2019; Tušek et al , 2020; Ježovita et al , 2018). Table 1 summarises the literature on the tools used while conducting APs.…”

“…520, 2018). APs work well when the goal of audit is cost reduction in a short time (Ismoilov, 2020; Mansour and Kalib, 2019). APs assess risks effectively (Samaha and Hegazy, 2010).…”

“…APs dominate auditing literature on competitive environments (Khansalar et al , 2015), effective and advantageous audit processes (Mansour and Kalib, 2019), sophisticated financial data modelling (Jans et al , 2014) and skilled auditors from large, internationally active (Big-4) firms. SMEs are hesitant to use APs for auditing (Lin et al , 2003; Abidin and Baabbad, 2015).…”