Active Use of Auditors in Tax Control: An Analysis of how the Auditors can Participate Actively in Tax Control

Michael Mosch Gellert & Filip Arthur Mickelsen

Student thesis: Master thesis

Abstract

Over the past few years, the media have pointed out many scandals within the Danish Tax Authorities, which have caused a lot of frustration in Danish society. These scandals have been discussed all over the country, and many questions have been raised regarding leadership and prioritisation within the tax authorities and the decisions made by the politicians. An obvious question would be whether the auditors bear part of this responsibility? Or can the auditors help prevent future scandals? This has been the pivot the debate, and we have with this thesis tried to shed a light on this question. This thesis has been prepared in connection with termination of MSc in Business Administration and Auditing at the Copenhagen Business School in the autumn of 2017. The purpose with this thesis is to analyse whether, and how, auditors could be used actively in tax control for the purpose of addressing the errors made by small and medium-sized enterprises. Furthermore, the thesis contains a critical analysis of tax control as it is today, and the development of the errors made by the enterprises and the consequence that prior years’ scandals have had on the perception of the Tax Authorities. Interviews have been held with auditors, representatives of FSR – Danish Auditors and an employee from the Danish Tax Authorities, to obtain the different parties’ position on the problem and on the question of whether auditors should have a more active role in future tax control. Furthermore, more than 4,500 small and medium-sized enterprises have given their response to a survey initiated by us in connection with the preparation of the thesis. Through an analytical evaluation of our questions to the respondents, we have clarified that at the moment there indeed is an expectation gap between the responsibility held by the enterprises and that held by their auditors. Furthermore, this has clarified on which points the respondents agree and on which they disagree. Based on the analysis and the relevant theory, we have examined the options that the Tax Authorities have to increase the tax control by using auditors. The pros and cons of the options have been discussed and based on this we have given our opinion as to which we option we consider the preferable one.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2017
Number of pages643