Author: Clarita M. Alarin
Date: September 1996
Presented to: The Faculty of the Graduate School, Urios College, Butuan City
Thesis title: THE IMPLEMENTATION OF SELECTIVE AUDIT PROGRAM, Bureau of Internal Revenue, District Office No. 103, Butuan City Fiscal Year 1994-1996

  A. On Profile of Violation Committed by Taxpayers
  1. A total of 25 types of tax violations involving 272 frequency counts were committed during the fiscal years 1993 and 1994.   The average gross amount of the violations in two years was P 5, 565, 250.00.
  2. The top five tax violations committed in two years were the following: 61 disallowed expenses, 40 unsupported expenses, 36 understatements of sales, 29 unrecorded sales, and 27 disallowed input tax.
  3. There were nine tax violations with substantial percentage of non-repeaters in 1994.   These were: understatement of sales subject to VAT 100%, unsupported purchases 80%, understatement of sale/receipt 70.58%, unsupported expenses 68.42%, over claimed expenses 66.66%, disallowed expenses 63.64%, unreported sales/receipt 55.56% and vat sales were recorded as Non-VAT sales 60%.   The average percentage of non-repeaters of tax violations is 67.39%.
  4. Tax violations committed in 1993 reduced by 32.61% in 1994 due to voluntary compliance.
  B. Extent of Implementation of Selection Audit Program
  1. The Revenue District Officer rated the Phase I activities of Selective Audit Program as average.   However, he rated the assigning of tax cases to revenue to examiners as very effective.
  2. The tax examiners rated Phase II activities of Selective Audit Program as very effective. Of the 11 program components, five were very effective, one average and five very much effective.
  3. The components rated very effective were: pre-audit analysis of return, work planning, and contact with tax payer, preliminary evaluation of miscellaneous records, initial examination techniques and performance of quality work.