Ethical issues in tax audit in Albania

A code of ethics is a clear declaration of values and principles, which should guide the auditors in their daily work. Auditor’s independence, power and responsibility in the line of their duty should demonstrate high ethical values.

It is especially important that inspectors are looked upon with confidence, security and reliability by the taxpayers they audit. They can encourage this confidence by mastering and applying the ethical requirements specified in this code while exercising their functional duty.

Every violation of professional behavior or inappropriate behavior in their personal lives affects the integrity of the entire tax office as well as the quality and validity of their work and they can create suspicions as to the credibility of audit itself.

Integrity is the principal value in the Code of Ethics. It is the auditor’s duty to comply with high standards of behavior (honesty, fairness, justice, purity and credibility in their work and relations with their superiors). The integrity of the auditors and audit section should rely on the principles of independence and objectivity. Auditors independence means that it should not be affected by personal or external interests. Auditors should not only try to be independent from the taxpayer and interest groups, but they should also be objective and impartial in the issues they audit. Objectivity and impartiality are necessary in every work performed by the auditors, and much more so in their reports. Conclusions and reports should be based on facts gathered according to tax audit standards.

Auditors should not agree to make audits which are beyond their competence. When they are assigned such duties, they should have the courage to refuse this to the Head of Office. Auditors should demonstrate due professional care when they audit and prepare reports about these audits. They should make sure that their work is reliable, timely, useful, convincing and clean. The auditors have the professional obligation to update and improve the necessary skills to fulfill their professional responsibilities and they should adopt the highest possible quality methods and practices when conducting an audit.

Conducting an audit is always subject to approval by the direct superior/head on the basis of the monthly plan. The Head of Audit should have the responsibility to sincerely try to reduce the costs and ensure the effectiveness and efficiency of the unit they monitor and therefore reduce the administrative costs for every audit. As with all other public administration structures, the audit costs are covered by the taxpayers. In this respect, the auditors have the moral responsibility to be role models for the rest of the public administration.

It is important for the auditors to maintain political neutrality. Therefore, it is important that auditors maintain their independence from political influences, in order to fulfill their audit responsibilities in an impartial way. Auditors should not engage and not even think of the idea to engage in political activities while they are under the fiscal authority not only because this type of activity is prohibited by law, but also because such engagement may have or may be considered to have a negative influence on their capacity to fulfill their professional responsibilities in an impartial way. All auditors should obviously demonstrate that they do not really discriminate any taxpayer because of sex, religion, physical ability or health condition.

Auditors should be polite and perseverant at the same time while making examinations. They should insist in gathering and analysis of the necessary facts to produce valid findings and conclusions. They should make sure that the evidence supporting the report is sufficient, reliable and clear, so that conclusions or judgments can be convincing and important. For this, they should present only the findings that are strongly supported by clear facts already found. Time after time, it may be necessary to present the findings and conclusions which contain interpretations. However, such interpretations should be based on facts and be logically grounded and reasonable.

All auditors and members of the section working for audit purposes should stick to their employment terms and other acts and rules of ethics in public service, etc. Auditors should not use their official position to benefit what does not belong them, be it property or other types of benefits.

Auditors are responsible for their behavior in all cases of harassment. Harassment is a boring behavior which creates problems to the person that is harassed. Harassment may vary from extreme forms, such as sexual and religious harassment to offending someone in his working place. In spite of its form and time when it occurs, harassment causes restrictions and serious impact on the auditors personal and family life and harms the reputation and credibility of the section and tax office. All inspectors have personal responsibility to make sure that with their actions they will not jeopardize their own health or safety or those of others.

The auditors should guarantee that they will effectively and efficiently use all public resources not for personal purposes. This is reflected in the use of office equipment, including phone, fax, computers, e-mail and internet, copier, premises, means of transportation, etc. only for the purpose of the audit functions.

Auditors should respect the methods applied by other professions in their professional activity. They should take into consideration the traditions and practices of other professional groups with which they work. When using materials from other professionals, auditors should accurately use references and sources of information. They can present their alternative options without making any direct assessments or opposing them.

When tax office employees give advice, or make comments either directly or in the mass media, demonstrations, radio and TV programs, posters or others, they should take reasonable measures to make sure that:

• Their declarations are based on the appropriate literature and practice for the case in question;
• Their declarations comply with the Code of Ethics and professional practice standards;
• Those who receive information demonstrate that there is a consulting and professional relationship between them;
• When making personal declarations in a public context, the auditors should clarify that they are speaking from their personal position and not on behalf of tax office.

Finally, it is important for every auditor to update their knowledge. The auditors should be able to self-assess their own knowledge and make the best efforts to improve the level of their professional knowledge. For this, the auditors should be provided with the necessary time when preparing to audit a certain function. The time between two successive audits should also serve as professional development time. According to the all over world tax administration experience, I believe that an auditor should be trained at least up to 40 hours. This education must be the open gate always for all types of employees of tax administrations.