Detecting tax evasion in the hospitality and tourism sector

The purpose of this paper is to present the results of a meta-analysis of the relationship between determinant factors and tax evasion based on deterrence approach. Using the meta-analysis method, each statistical result of empirical studies is converted into r-pearson as standardized effect size, and then synthesized into a mean effect size in order to increase power and to resolve uncertainty. Theoretically, increasing audit, tax rate and tax penalty will decrease tax evasion. However, the results show that only tax rate has a significant impact on tax evasion. Synthesizing totally 478 outcomes from articles published between 1978 and 2018, there is a robust conclusion that decreasing tax rate is an effective tool in combating tax evasion. On the other hand, audit and penalty are not significant in influencing tax evasion. In addition, the results of heterogeneity analysis suggest that national culture and income level of the country are useful in explaining the impact of audit, tax rate and tax penalty on tax evasion. These findings should be of interest to policymakers. First, instead of sacrificing more resources in conducting audit or imposing more penalty, tax authorities should consider setting the tax rate as low as possible to diminish tax evasion. Second, considering that culture and income level influence the impact of audit and penalty on tax evasion, policymakers should consider national cultural values and income level condition when designing audit techniques and setting penalty structures.

Sharia Supervisory Board (SSB) plays an important role in implementing Islamic law in Islamic banks, including fraud prevention. This ungodly act, also known as haram, is highly forbidden in Islam, as evidenced in the holy book of Al Qur’an. Therefore, this study was conducted to provide evidence on the role of SSB attributes (number of members, expertise, cross-membership, educational level, attendance of meeting, tenure) in preventing fraud. This study used 11 Islamic banks in Indonesia as research samples that were observed during 2014–2018. Data were analyzed using the ordinary least squares (OLS) method. The research findings from this study showed that the number of members, cross-membership, education level, attendance of meetings, and SSB tenure were not proven to reduce fraud. SSB’s expertise in accounting/finance had a negative influence on financial statement fraud. The implication of the study is that SSB’s expertise helps banks to effectively carry out their duties, namely detecting financial statement fraud. SSB acts as an independent control mechanism that states that all bank activities are in line with Islamic law and also avoid financial statement fraud.

The risk of distortion of financial statements has been growing. Following the 2008 crisis, recipients of financial information are increasingly focusing on the likelihood of financial statements being distorted through fraudulent presentation of financial information. Therefore, scientific research pays more attention to models capable of detecting financial statement manipulation.
The paper aims to present the principles of functioning and the possibility of using the Beneish M-score model in Polish realities. It analyzes the history of more than 30 companies listed on the Warsaw Stock Exchange to select those whose history indicates that they can be classified as manipulators, and to select the same number of companies from the control group that are considered as non-manipulators.
The research method involves the analysis of empirical data on companies listed on the Warsaw Stock Exchange.
The analysis showed the 8-factor Beneish model identified manipulators with 100% accuracy and succeeded in identifying non-manipulators. The effectiveness of the 5-factor model was much lower.
To serve the purpose of the study, the effectiveness of the Beneish model was tested on a small sample of Polish listed companies as an introduction to a planned larger scale research. The results obtained are consistent with the results of numerous studies by authors from various countries and confirm the effectiveness of the Beneish model in detecting financial statement manipulation.

Acknowledgment
The publication is sponsored by funds from the Cracow University of Economics for the maintenance and development of research potential.