The effect of sworn-in financial advisors on preventing tax evasion as an audit unit: An applied research on sworn-in financial advisors

Tax evasion can be defined as tax payer?s cutting down on the amount he is supposed to pay in legal and/or illegal ways. The negative effect of tax evasion for governments is not only limited to the decrease in tax income, but it leads to more serious problems in social and political structures of countries. Therefore, both developed and developing countries spend great efforts to take precautions in order to minimize tax evasion.Various methods can be applied to prevent tax evasion and audit conducted by independent external auditor has long been claimed at the literature as one of the most important such factors. In fact, many studies have shown positive relationship between the amount of audit and tax compliance. These studies have found out that the taxpayers pay more attention to comply with tax requirements even if they are aware of the high probability of being audited before they declare taxable income. This study, therefore, aims to assess the impact of Sworn-in Financial Advisors, one of the audit professions in Turkey, on preventing tax evasion.In this study, having examined the relationship between the basic functions of Sworn-in Financial Advisors and tax evasion from theoretical perspective, a research based on questionnaire survey were conducted to identify the effects of Sworn-in Financial Advisors on tax evasion. The results of the theoretical discussions, related literature review and the research conducted in this study, indicate that three functions of Sworn-in Financial Advisor, namely, auditing, consulting, and approving, has significant impact on preventing tax evasion.Key Words: Tax Evasion, External Audit, Sworn-in Financial Advisors