Tax fraud indicators / Rohaya Md Noor … [et al.]

Md Noor, Rohaya and Abdul Aziz, Alizan and Mastuki, Nor’Azam and Ismail, Norashikin (2012) Tax fraud indicators / Rohaya Md Noor … [et al.]. Management & Accounting Review, 11 (1). pp. 1-15. ISSN 2550-1895


This paper examines data of companies subjected to tax investigation during the tax years of 2001 to 2005 to detect the financial ratio associated with tax evasion. Using the financial ratio analysis, the objective of this study is to investigate the possible indicators of fraudulent financial reporting for tax evasion. Six financial ratios applied to a final sample of 73 companies. Univariate and multivariate statistical techniques are used to identify the indicators of fraud financial reporting. Based on the ordinary least square model, this study provides empirical evidence that the ratio of sales, working capital and debts over total assets, are significantly associated with the companies’ tax evasion. Hence, the findings imply that these ratios can be used by tax offices in their investigation as a predictor of fraud financial reporting for tax evasion purposes. The results therefore demonstrate that the findings could be of assistance to tax authorities in their effort to identify the possibility of tax evasion.


Item Type: Article
CreatorsID Num. / Email
Abdul Aziz, AlizanUNSPECIFIED
Mastuki, Nor’AzamUNSPECIFIED
Ismail, NorashikinUNSPECIFIED
Subjects: H Social Sciences > HJ Public Finance > Revenue. Taxation. Internal revenue
H Social Sciences > HJ Public Finance > Revenue. Taxation. Internal revenue > Income tax
Divisions: Universiti Teknologi MARA, Selangor > Puncak Alam Campus > Faculty of Accountancy
Journal or Publication Title: Management & Accounting Review
Journal: UiTM Journal > Management & Accounting Review
ISSN: 2550-1895
Volume: 11
Number: 1
Page Range: pp. 1-15
Official URL:
Item ID: 31125
Uncontrolled Keywords: Tax evasion, Tax fraud indicators and financial statements fraud.


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