An Optimal Auditing Model for Identifying Tax Fraud and Tax Evasion in the Iranian National Tax Administration

Mina  Bakhtiari Chehelcheshmeh; Arezoo Aghaei Chadegani; Ehsan   Kamali

Authors

Mina Bakhtiari Chehelcheshmeh Department of Accounting, Na.C., Islamic Azad University, Najafabad, Iran Author https://orcid.org/0009-0006-2500-3891
Arezoo Aghaei Chadegani Department of Accounting, Na.C., Islamic Azad University, Najafabad, Iran https://orcid.org/0009-0006-2500-3891
Ehsan Kamali Department of Accounting, Na.C., Islamic Azad University, Najafabad, Iran Author https://orcid.org/0000-0001-6897-1426

Keywords:

tax system, optimal auditing, tax fraud, tax evasion

Abstract

The present study aimed to develop an optimal auditing model for identifying tax fraud and tax evasion in the Iranian National Tax Administration, taking into account the environmental characteristics and prevailing conditions of the country. Given the exploratory approach of the research and the adoption of a qualitative methodology, grounded theory was employed. Accordingly, during the first half of 2023, the views of 15 experts specializing in tax auditing and possessing practical experience in this field were collected through in-depth interviews to investigate the factors affecting optimal auditing for the identification of tax fraud and tax evasion. Ultimately, an “Optimal Auditing Model for Identifying Tax Fraud and Tax Evasion in the Iranian National Tax Administration” was developed, encompassing causal conditions, intervening factors, contextual conditions, strategies for achieving optimal tax auditing, and their consequences. The findings resulted in the identification of six main dimensions and 18 axial components within the optimal auditing model for identifying tax fraud and tax evasion. These included the core category and causal conditions (the use of modern financial technologies, integration of auditing processes with tax systems, and an efficient auditing system); contextual factors (operational capabilities and the use of information technology, tax equity, the level of transparency and an efficient tax information system, macroeconomic factors, and political factors); intervening conditions (social and cultural characteristics and legal characteristics); strategies (establishment of quality-monitoring and ranking mechanisms, strengthening resources and modern facilities for optimal tax auditing, and providing the necessary arrangements for establishing extra-organizational balance); and consequences (consequences of resolving tax disputes, consequences of optimal tax auditing, and consequences at the taxpayer level). One of the most important achievements of this study is the proposed framework for optimal tax auditing aimed at identifying tax fraud and tax evasion. Within this model, the principal foundation of optimal auditing for identifying tax fraud and tax evasion is defined as a commitment to quality centered on economic information.

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