Improving the Detection of Risk of Nondetection during the Audit of Tax Reporting

1Victoria I. Tarasova, Yury V. Mezdrikov, Danara A. Tahtomysova, Elena N. Makarova, Anna I. Aukina


The controversial nature of the methodology for assessing the detection risk in tax audits and profound interest of organizations in improving the methodology determined the research goal, the development of a detection risk assessment methodology. We used the Block-wise Selection method, the Key Elements method, the Main Array method, as well as provisions of the information asymmetry theory. We developed the methodology for detection risk assessment in tax audits; proved that there is a correlation between the information asymmetry theory and the more efficient company management process. The practical relevance of the study of the detection risk assessment methodologies on the example of two companies that use the general and special taxation systems proved the causal relationship between the information asymmetry theory and the validity of the owners’ managerial decisions. The practical usefulness of the results obtained: the study made it possible to arrange the company management process more efficiently, boost the company’s profitability, and minimize the company's risks when audited by the supervising tax body. The methodologies allowed improving the tax audit risk assessment theory.


audit risk, risk assessment, tax audit, combined non-statistical methods, general tax system, special tax system, the asymmetry theory

Paper Details
IssueIssue 8