Purpose

The issue of tax evasion through fraudulent financial reporting committed by companies is a major concern facing the tax authority in Malaysia. As such, the purpose of this study is to propose a cohesive model of predicting tax evasion from the perspective of fraudulent financial reporting amongst small- and medium-sized enterprise (SME) taxpayers.

Design/methodology/approach

The proposed model for this study is designed to explore the extent of the relationships between the independent variables: family ownership firms, company size, presence of tax professionals, company’s duration in business and frequency of tax audits and the moderating variable, i.e. tax audit officers’ level of competence; and the dependent variable, i.e. tax evasion from the perspective of fraudulent financial reporting. This study is grounded on four theories: agency theory, political cost theory, economic deterrence theory and competency theory. Data will be gathered from actual audit cases resolved by the Inland Revenue Board of Malaysia. Ordinary least square regression analysis is proposed for the investigation.

Findings

This study anticipates that family ownership firms, company size, presence of tax professionals, company’s duration in business and frequency of tax audits could be associated with tax evasion amongst SMEs in Malaysia. This study further proposes that highly competent tax audit officers could mitigate the relationship between frequency of tax audits and tax evasion practices amongst SMEs in Malaysia.

Originality/value

This study should be able to provide a cohesive model of predicting tax evasion from the perspective of fraudulent financial reporting amongst SMEs in Malaysia. Research on fraudulent financial reporting amongst SMEs is very limited, especially involving the level of competence of the tax audit officers; therefore, this study should contribute to the tax evasion literature by providing a comprehensive model of predicting tax evasion through fraudulent financial reporting using a Malaysian tax setting.

中文翻译：

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中小型企业财务造假视角下的偷税漏税预测模型

目的

公司通过欺诈性财务报告逃税的问题是马来西亚税务机关面临的主要问题。因此，本研究的目的是从中小企业 (SME) 纳税人的财务报告欺诈的角度提出一个预测逃税的内聚模型。

设计/方法/方法

本研究提出的模型旨在探索自变量之间的关系程度：家族所有制公司、公司规模、税务专业人员的存在、公司的业务持续时间和税务审计的频率以及调节变量，即税务审计人员'能力水平；和因变量，即从欺诈财务报告的角度逃税。本研究基于四种理论：代理理论、政治成本理论、经济威慑理论和胜任力理论。数据将从马来西亚内陆税收局解决的实际审计案例中收集。建议采用普通最小二乘回归分析进行调查。

发现

这项研究预计，家族企业、公司规模、税务专业人士的存在、公司的业务持续时间和税务审计的频率可能与马来西亚中小企业的逃税行为有关。本研究进一步提出，高度称职的税务审计人员可以减轻马来西亚中小企业税务审计频率与逃税行为之间的关系。

原创性/价值

这项研究应该能够提供一个从马来西亚中小企业欺诈性财务报告的角度预测逃税的内聚模型。对中小企业欺诈性财务报告的研究非常有限，尤其是涉及税务审计人员的能力水平；因此，这项研究应该通过提供一个综合模型来预测逃税，通过使用马来西亚税收环境的欺诈性财务报告来预测逃税文献，从而为逃税文献做出贡献。