ABSTRACT

This study was designed to assess the role of tax audit in corporate tax avoidance. The research objectives of study includes the following, to determine the effect of tax audit process on corporate tax avoidance, to determine the effect of tax audit outcome on corporate tax avoidance and to determine the key challenges faced by tax authorities in conducting tax audit within the corporate sector. This study adopted the survey research design. The population study includes some of the staff of the federal inland revenue service, Edo State. The sample size of this study is 30 respondent drawn from the FIRS, Edo State. The instrument used for the collection of data was the questionnaire which was administered to the study sampled respondents. Out of the 30 questionnaires distributed, 27 copies were retrieved. The data collected was analyzed using simple percentage and chi square analytical method to test the hypotheses generated for the study. One of the  findings of the study is that there is no significant relationship between tax audit process and corporate tax avoidance. However, it was observed that majority of the respondent agrees that the tax audit process ensures effectiveness of tax laws and tax audit outcome has impacted companies tax avoidance practices. Thus the study concludes a lot of revenue are lost to tax avoidance yearly as a result leads to the following recommendations: deterrence effect, behavioral change, reputation risk, financial impact, audit frequency, sophistication and resources, transparency, engagement and communication, enhanced technological capabilities, increase international cooperation, strengthen legal framework, expand resources,regular training and development, develop predictive models and policy reforms.