The Effect of Book Tax Differences on Tax Examiner’s Skeptical Judgments and Actions “An Experimental Study

Document Type : Original Article

Authors

1 Faculty of Business. Alexandria University

2 Assistant Professor of Accounting and Auditing, Faculty of Business, Alexandria University

3 Assistant Professor of Accounting and Auditing, Faculty of Business - Alexandria University

Abstract

The research aims to study the effect of book tax differences on tax examiner’s skeptical judgments and actions, and that’s during the income tax returns examination process carried out by the state tax authority. The Tax examiner’s skeptical judgment includes the reasonableness of taxable income and the Tax examiner’s skeptical action includes the expansion in both the tax examination & makes adjustments on income tax returns data. This research uses a 2×2 between subjects’ experiment, that includes main variable book tax differences (Low vs. High). This is going to result some practical cases, which are provided to sample of tax examiners in the Egyptian tax authority, and collect the responses to reach research results by providing scientific and practical evidence for the effect of book tax differences on tax examiner’s skeptical judgments and actions.
The experimental study community consists of tax examiners, and the study sample consisted of a selective, judgmental sample from that Community of 136 individuals. The study concluded that the Main hypothesis was accepted in full of its subsidiary implications, as book tax differences effect on the tax examiner’s skeptical judgments by making it more conservative, and the effect on his skeptical actions by making it more strict.
The research contributes to addressing the behavioral aspects related to the human element within the Tax Authority as the most important element of the tax system, and what these behavioral aspects include in terms of skeptical judgments and actions to uncover tax evasion and avoidance activities and earning management for companies.

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