The quality of tax reporting by companies in Malaysia: The role of tax agent

• Main Author: Norazean, Ahmad
• Format: Thesis
• Language: English; English
• Published: 2023
• Subjects: HJ Public Finance
• Online Access: https://etd.uum.edu.my/10699/1/s829362_01.pdf; https://etd.uum.edu.my/10699/2/s829362_02.pdf; https://etd.uum.edu.my/10699/

The objective of this study is to investigate the quality of tax reporting by companies in Malaysia. Three aspects of investigation were included in the situation of tax planning practices by companies in Malaysia from the perspective of tax computation prepared by tax agents appointed by companies for the years of assessment 2017, 2018 and 2019. Then, it was followed by identifying some clues of the characteristics of the tax agents that probably came from the Big 4 or non-Big 4 tax agent companies. Lastly, this study would ascertain the issues of audit frequently found that would be the triggered items for tax administrators in choosing companies for audit. Via the Theory of Ethics, the adoption of ethics values by tax agents in every decision made upon conducting its profession was explored especially in maintaining the quality of its tax reporting and the character from its professionalism. Data was collected from the internal data of IRBM and convenience sampling was used for the interviews to support the data collected. The results indicated poor quality of tax reporting in terms of the increase in tax adjustment after audit for the three consecutive years. The results also showed that the direct mediation of Big 4 and non-Big 4 tax agent companies in tax avoidance which, correspondingly indicated the poor quality of tax reporting. Results indicated issues on Sales, Purchases and Expenses were the most frequent issues in audit. The adoption of Theory of Ethics is similar to Deontological and Utilitarian theories which indicate that a non-Big 4 tax agent will take the risk of not reporting the actual performance of the company. When taxpayers seek experts in reducing their tax liabilities, tax authorities should focus more on its audit regime to reduce tax avoidance and hence increase revenue collections. The study has limitations in terms of the small scale of sampling and information provided is not up to date. Possible further studies should focus more on other ethics theories and other possible factors towards tax reporting quality.