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Using Financial Ratios to Select Companies for Tax Auditing: A Preliminary Study

Dorina Marghescu, Minna Kallio, Barbro Back, Using Financial Ratios to Select Companies for Tax Auditing: A Preliminary Study. In: Organizational, Business, and Technological Aspects of the Knowledge Society (Proceedings of WSKS2010), CCIS 112, 393-398, Springer, 2010.

Abstract:

Tax auditing procedures include an investigation of the accounting records of a company and of other sources of information in order to assess whether the taxation has been based on correct and complete information. When there are found discrepancies between the accounting information and the real situation, the taxation should be corrected so that the eventual tax defaults are assessed and debited. The paper analyzes to what extent the financial performance of a company can be used as an indicator of tax defaults. We focus on one type of tax, namely employer’s contribution, and four financial ratios. We evaluate the model in a study of Finnish companies by using a binomial logistic regression analysis. The study is exploratory and at a preliminary stage.

BibTeX entry:

@INPROCEEDINGS{inpMaKaBa10a,
  title = {Using Financial Ratios to Select Companies for Tax Auditing: A Preliminary Study},
  booktitle = {Organizational, Business, and Technological Aspects of the Knowledge Society (Proceedings of WSKS2010)},
  author = {Marghescu, Dorina and Kallio, Minna and Back, Barbro},
  volume = {CCIS 112},
  publisher = {Springer},
  pages = {393-398},
  year = {2010},
  keywords = {tax auditing, financial performance, financial ratios, binomial logistic regression},
}

Belongs to TUCS Research Unit(s): Data Mining and Knowledge Management Laboratory

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