Methodology development problems of financial and economic analysis for the purposes of tax control

Abstract

The article considers the history and specific features of financial and economic analysis methodic in Tax Service of Ukraine. Topic is up to date because of absence of commonly shared views at scope, methodic and necessity of financial analysis in spite of twenty years long studies history and plenty of methods tried. Analytical methods are of particular importance at the stages of taxpayer’s selection for tax audit and pre-check analysis. The article focuses on the reasons of this situation.

Author studies peculiarities of financial analysis methodic, applied by Tax service of Ukraine and Russian Federation. There are few concepts, describing the role and importance of financial analysis in State tax service practice, its interrelations with risk-oriented system of taxpayer’s selection for tax audit. Author describes different analytical methodologies, including typical soviet-style techno economic study, cabinet audit, integrated due diligence methodic, and the last one, combined with task risks evaluation. Article reviews comparative practice of analytical procedures in Ukrainian and Russian Tax services. It is concluded that focused at tax aspects financial analysis requires regulatory adjustment. This is especially important for pre-checking stage of tax audit, where it is interconnected but not limited with proving of earlier detected tax risks. The article is supposed to be useful for activities of Tax service of Ukraine.