Compliance implications of pay as you earn audit evidence of the banking sector

Abstract

The research set out to find out whether Pay as You Earn audit has an implication on Pay As You Earn compliance in the banking sector. A questionnaire was constructed; (i) To find out the banks that have had P.AY.E. Audit and those that have not been P.AY.E. Audited. (ii) To find out the frequencies on P.AY.E non compliant indicators which include penalties, interest charges, P.A.Y.E audits, additional assessments and audit adjustments. Secondary data was obtained from Kenya Revenue Authority audit section relating to all the commercial banks in Kenya. The data relates to the period from 2000 to 2008. The data collected was analyzed using frequency tables and percentages as well as a chi square for independence. The findings were that most banks are P.AY.E audited and whether audited or not, most of them are affected by non-compliant indicators. The study revealed that there is no significance difference in P.A.Y.E. compliance between commercial banks with P.A.Y.E audit and those not audited.