Maarten A. Sigl\u00e9, Nyenrode Business University, Netherlands Tax Administration (NTA), The Netherlands, ORCID 0000-0001-5787-8920.<\/p>\n\n\n\n
Stephan Muehlbacher, Karl Landsteiner University of Health Sciences, Department of Psychology and Psychodynamics, Division of Work, Organizational, and Economic Psychology, Krems, Austria, ORCID 0000-0002-3665-4976.<\/p>\n\n\n\n
Lisette E. C. J. M. van der Hel, Nyenrode Business University, The Netherlands, ORCID 0000-0002-6976-4338.<\/p>\n\n\n\n
Erich Kirchler, University of Vienna, Faculty of Psychology and IHS-Institute for Advanced Studies, Vienna, Austria, ORCID 0000-0003-4731-1650.<\/p>\n\n\n\n
In a world where technology keeps transforming every corner of our lives, tax auditing is no exception. From cloud-based accounting to AI-driven bookkeeping, the way companies handle their taxes keeps evolving rapidly. For tax authorities, this shift poses a crucial question: Traditionally, tax auditors have relied on years of experience to spot irregularities\u2014like mistakes made when processing unusual transactions or misinterpreting tax rules. But today\u2019s landscape keeps adding new twists: IT-related tax risks.<\/p>\n\n\n\n Think about:<\/p>\n\n\n\n \u00b7 Faulty logical access controls<\/em> that allow unauthorised system access.<\/p>\n\n\n\n \u00b7 Weak data integrity<\/em> due to outdated or misconfigured software.<\/p>\n\n\n\n These aren\u2019t your classic tax risks. They require specialised IT knowledge\u2014and that knowledge becomes outdated fast.<\/p>\n\n\n\n We conducted an experiment with tax auditors from four countries, comparing their abilities to detect both traditional and IT-related tax risks. The findings? When it comes to detecting IT-related risks, experience alone won\u2019t cut it.<\/em>\u00a0This makes sense. If your auditing skills were honed in a pre-cloud, pre-AI era, your expertise might not automatically transfer to spotting complex, tech-driven vulnerabilities.<\/p>\n\n\n\n Here\u2019s where it gets interesting. More experienced auditors who were highly open to new technology<\/em>\u2014demonstrating what we call technology readiness<\/em>\u2014outperformed their peers in detecting IT-related risks.<\/p>\n\n\n\n Why? Because they actively keep up with new tools, systems, and processes. They don\u2019t just rely on what they\u2019ve always known\u2014they adapt.<\/p>\n\n\n\n This isn\u2019t just theory. The reality is that many tax authorities are facing a looming wave of retirements amongst experienced staff. With fewer veterans in the field, it\u2019s crucial to:<\/p>\n\n\n\n \u00b7 Target training:<\/em>\u00a0Focus on helping auditors to develop IT-related skills alongside traditional audit know-how. In tax auditing\u2019s digital future, experience still matters\u2014but only if it\u2019s paired with a willingness to embrace change<\/em>. Technology readiness is no longer optional; it\u2019s a core skill for delivering high-quality audits in a world that won\u2019t stop innovating.<\/p>\n\n\n\n
How can tax auditors keep up\u2014and does experience still matter in the digital age?<\/strong>
That\u2019s exactly what our new study, Tax Audit Quality: The Role of Experience and Technology Readiness in a Digital World<\/em><\/a>, published in issue 10(1) of The Journal of Tax Administration<\/em>, set out to explore.<\/p>\n\n\n\nThe Digital Challenge for Tax Auditors<\/strong><\/h2>\n\n\n\n
Experience Alone Isn\u2019t Enough<\/strong><\/h2>\n\n\n\n
The Secret Ingredient: Technology Readiness<\/strong><\/h2>\n\n\n\n
Implications for Tax Authorities<\/strong><\/h2>\n\n\n\n
\u00b7 Deploy strategically:<\/em>\u00a0Assign experienced auditors with high levels of tech readiness to the most tech-heavy audits. \u00b7 Rethink hiring: <\/em>Look for curiosity and openness to new tools as much as formal qualifications<\/p>\n\n\n\nThe Bottom Line<\/strong><\/h2>\n\n\n\n
References<\/strong><\/h2>\n\n\n\n