A study on tax audit perception of certified public accountants in combating informal economy: The Case of Kayseri province

The informal economy is when people engaged in commercial and economic activities hide some of their income from the state by not registering these activities. The existence of an informal economy in a country prevents the correct calculation of economic indicators such as gross national product in that country. The rate of informal economy should be reduced to ensure that the economic and fiscal policies implemented are effective and efficient. Taxes in Turkey are based on the declaration procedure. For the correct calculation of taxes, it is of great importance whether the declarations made by taxpayers reflect the truth. An effective tax audit is needed to determine whether the declarations reflect the truth.The tax audit is carried out by the tax administration in order to determine whether the administration and taxpayers act in accordance with the tax laws and to prevent tax losses and leakages by correcting the identified erroneous practices. CPAs carry out most of the taxpayers' transactions with the tax administration (including tax audits). Therefore, the perceptions, attitudes and behaviors of CPAs as well as taxpayers are important about tax auditing. The presence of an effective tax audit will significantly reduce the informal economy. In order to increase the efficiency in tax auditing, it is of great importance to determine the tax audit perceptions of the taxpayers and CPAs who are subject to audit. The aim of this study is to measure the tax audit perceptions of CPAs in the fight against the informal economy. The study was carried out specifically for Kayseri province. The population of the study consists of 1,775 CPAs registered with the Kayseri CPA Chamber. Demographic data of 405 CPAs, which are the sample of the study, and data on tax audit perceptions in the fight against the informal economy were obtained by using the survey method and survey technique. Cross-tabulation and Chi-square analyses were performed for the data. According to the findings of the study, tax audits are perceived by CPAs as an effective tool in combating the informal economy. CPAs' perception of tax audits differs significantly according to demographic factors such as marital status, age, professional experience, the number of taxpayers to whom consultancy services are provided, and the method of tax audit. In addition, the perception of tax audits differs significantly according to socio-psychological factors such as perception of the informal economy, perception of justice, and fear of audit. In this context, developing technological infrastructure, providing continuous education opportunities, and increasing the frequency of tax audits can help create a more successful strategy in combating the informal economy.