Internal Control and Auditing and Their Role in Formulating the Financial System Strategy A Case Study in the General Tax Authority

Abstract

The main objective of the study is to explore the impact of internal control and auditing on the strategy and provisions of the financial system. The General Tax Authority in Iraq was chosen as a leading body in the country, due to the crises and financial events that the Iraqi economy has experienced since the nineties of the last century, and the decline in revenues due to many reasons, including fraud, deception and accounting errors, as well as the decline in professional ethics. As a result, society has lost confidence in administrative, accounting and control systems. The study provided a review and clarification of the theoretical and intellectual framework of the research variables. This problem lies in the widening gap between the financial data reports submitted to the General Tax Authority and tax revenues, which should be through the application of internal control and auditing (closer to the truth). The study sought to achieve the most important objectives, which is to apply the elements and means of internal control and auditing to improve the financial strategic system of the General Tax Authority. In order to achieve the objectives of the study, the study hypothesis was formulated: Does internal control and auditing affect the financial strategic system of the General Tax Authority? The most prominent conclusions reached by the study are that internal control and auditing is an integrated system through which monitoring and follow-up are imposed on the extent to which the General Authority applies official tax laws by practicing its administrative and financial operations with the highest degree of disclosure and transparency. The most important recommendations are: preparing the appropriate environment to activate the role of internal control and work with international accounting standards, and emphasizing the independence of internal and external auditors as well as the efficiency of audit committees, in order to follow up and inspect to discover violations and deviations in tax accounting operations in a timely manner.