PERCEIVED BENEFITS OF VAT AND ITS IMPACT TO THE

CORPORATE TAXPAYERS IN THE LONE

DISTRICT OF BINAN

Statement of the Problem

The study aimed to determine the perceived benefits of VAT and its impact to the

corporate taxpayers. Specifically, this sought answers to the following sub-problems:

1. What are the perceived benefits of VAT to the Corporate Taxpayers in terms of:

1.1 Credit rating;

1.2 Investor value; and

1.3 Contribution to the country?

2. What is the Impact of VAT to the Corporate Taxpayers in terms of:

2.1 Cash Flow; and

2.2Profitability?

3. Is there a significant relationship between the perceived benefits of VAT and its Impact

to the Corporate Taxpayers?

Name of the Company:

Address:

I. Profile of the Respondents:

Corporation VAT Rate:

o Zero
o Exempt
o Regular (12%)
o Mix of Zero, Exempt, and 12%

Form of Organization:

o Partnership
o Corporation

Industry:

o Real Estate
o Manufacturing
o Energy and automotive
o Retail Company
o Marketing Research Company
o Financial Services Company
o Advertising Company

Other specified

II. Perceived Benefits of VAT

 Directions: Put a check (√) mark on the number that best describes your reaction to
each question.

4 – Strongly Agree
3 – Agree
2 – Disagree
1 – Strongly Disagree

Credit rating 4 3 2 1
1. Provides good credit rating to financing institutions
2. Provides credit worthiness for investors
3. Lowers cost of borrowing
4. Expands credit line
5. Acquires preference as borrower client
Investor value
1. Accumulates funds for future expansion
2. Deals with more suppliers
3. Pays VAT on time
4. Pays VAT gain additional credibility
5. Generates higher revenue
Contribution to the country
1. Provides truthful Income Tax Return
2. Supports economic and public service of the Government
3. Receives more revenue to local Government
4. Fulfills the infrastructural, technological, entrepreneurial demand of the
country
5. Helps the Government to raise fund for their projects for the country

III. Impact of VAT to corporate taxpayers

Directions: Put a check (√) mark on the number that best describes your reaction to
each question.

4 – Strongly Agree
3 – Agree
2 – Disagree
1 – Strongly Disagree
Cash flow 4 3 2 1
1. Reduced cash outflow on tax credit
2. Tax benefits on input tax credit on capital goods
3. Increased cash inflows due to presumptive input tax on certain occasion
4. Increased cash inflows when refund on input taxes are claimed
5. Increased cash revenue on VAT transaction
Profitability
1. Increased in price levels of goods/services
2. Increased the income of the company
3. Resulted in additional costs, which could be actual or cash flow related
4. Exceeded income over expenses
5. Paid all the expenses of the corporation

QUALITY OF EXTERNAL AUDIT ANDFINANCIAL

STATEMENTS OF PROFIT-ORIENTED
CORPORATIONS

by
Escaño, Eugene Kenneth
Bautista, Ana Rita
Gonzales, Rizzalyn Rose
Habana, Richard
Statement of the Problem

This study determined the relationship of the quality of external audit and financial

statements of profit-oriented corporations.

Specifically, this sought answers to the following sub-problems:

1. What is the extent of quality in the corporations’ external audit in terms of:

1.1 Audit firm culture;

1.2 Skills and personal qualities of audit partners and staff;

1.3 The effectiveness of the audit process;

1.4 The reliability and usefulness of audit report; and

1.5 Other factors affecting audit quality?

2. What is the extent of quality in the corporations’ financial statements in terms of:

2.1 Relevance;

2.2 Faithful Representation;

2.3 Comparability;

2.4 Understandability; and

2.5 Verifiability and timeliness?

3. Is there a significant relationship between the extent of quality of the corporations’ external

audit and financial statements?

 Appendix B

SAMPLE QUESTIONNAIRE

Instruction:Directions:Please check the box that best corresponds to your answer for each question below.
Legend: 4 Excellent
3 High
2 Fair
1 Poor
 Part I: QUALITY OF EXTERNAL AUDIT

Audit Firm Culture 4 3 2 1

1. The audit firm promotes merits of consultation on difficult issues
in the exercise of their personal judgment.
2. The audit firm ensures robust systems for client acceptance or
continuation.
3. The audit firm provides consequential action after monitoring
audit quality within firms.
4. The audit company makes measures to ensure that financial
considerations do not drive actions and decisions of the partners
and staffs.
5. The audit firm creates an environment where achieving
high quality is valued.
Skills and Personal Qualities of Audit Partners and Staff 4 3 2 1
1. Partners and staff make actions to better understand their clients’
business.

2. Partners and staff adhere to principles underlying auditing

standards.

3. Partners and staff exhibit professional skepticism in their work.

4. Staffs performing detailed ‘on-site’ audit work have sufficient

experience.

5. Partners provide junior staff with appropriate ‘mentoring’ and ‘on

the job’ training.

The Effectiveness of the Audit Process 4 3 2 1

1. The audit methodology requires audit documentation.

2. The audit methodology provides procedures to obtain audit

evidence effectively.

3. The audit methodology provides procedures to obtain audit

evidence efficiently.

4. The audit methodology administers high quality technical support

when the audit team requires it.

5. The audit methodology encourages partners and managers to be

 actively involved in audit planning.

The Reliability and Usefulness of Audit Reporting 4 3 2 1

1. Communications with the audit committee include discussions

about the qualitative aspects of the entity’s potential ways of
improving financial reporting.

2. Communications with the audit committee constitute discussions

about the scope of the audit.

3. Communications with the audit committee comprise discussions

about the threats to auditor objectivity.

4. Communications with the audit committee incorporate

discussions about the key risks identified.

5. Communications with the audit committee include discussions

about judgments made in reaching the audit opinion.

Other Factors outside the control of auditors affecting audit

4 3 2 1
quality

1. The reporting entity has an approach to corporate governance

that attaches importance to the audit process.

2. The reporting entity’s shareholders support auditors.

3. The reporting entity has deadlines on carrying out an audit

without undue reliance on work performed before the end of
the reporting period.

4. The reporting entity has appropriate agreed arrangements for

any limitation of liability.

5. The reporting entity is professional in dealing with issues

identified during the audit.

Part II: QUALITY OF FINANCIAL STATEMENT

Fundamental Qualitative Characteristics

4 3 2 1
Relevance

1. The financial statements contain information on corporate

 social responsibility.

2. The financial statements present non-financial information

in terms of business risks and opportunities that
complements the reported financial information.

3. The financial statements encloseananalysis concerning

cashflows.

4. The financial statements contain a proper disclosure of

extraordinary gains and losses.

5. The financial statements provide information concerning the

company's going concern.

Faithful Representation 4 3 2 1

1. The financial statements include disclosure related to

positive contingencies.

2. The company use non-recurring accounting estimates in the

preparation of the financial statements moderately.

3. The financial statements provide information on the

company’s corporate governance.

4. The financial statements contain disclosure related to

negative contingencies.

5. The notes to financial statement consist information

concerning bonuses of the Board of Directors.

Enhancing Qualitative Characteristics

4 3 2 1
Comparability

1. The financial statements comprise a disclosure on changes

in accounting estimates.

2. The financial statements contain information concerning

comparison and effects of accounting policy changes.

3. The company present financial index numbers and ratios in

the report.
4. The financial statements report information concerning
companies’ shares.

5. The financial statements entail a disclosure on changes in

accounting policies.

Understandability 4 3 2 1

1. The financial statements constitute information concerning

the company’s mission.

2. The financial statements include information concerning the

company’s strategy.

3. The financial statements present graphs and tables to clarify

information.

4. The financial statements do not have terms that are not

understandable in the perception of a potential investor.

5. The financial statements contain technical jargon for the

understanding of a researcher.

Verifiability and Timeliness 4 3 2 1

1. The financial statements disclose valid arguments to support

the decision for certain assumptions and estimate.

2. The financial statements are based on measures that can be

verified by other trained accountants using the same
measurement methods.

3. The financial statements report depreciation based on the rate

of depreciation and assets' net book value.

4. The financial statements show revenue and expense by

various responsible parties throughout the organization
separately.

5. The financial statements are prepared at the end of the firm's

tax year.