Why auditor characteristics matter for tax audit efficiency and transparency

Tax audits are a cornerstone of effective tax enforcement. They generate substantial additional tax revenues, help reinforce compliance and enhance trust in the tax system. Yet tax administrations everywhere face the same issue: limited resources. So what makes a tax audit efficient, and how can tax administrations organize their auditors more effectively? A new study by TRR 266 researchers Kay Blaufus and Julian Bock and their co-authors Benjamin Peuthert and Alexander N. Schwäbe, published in the Journal of the American Taxation Association, offers answers to this question. Based on survey data of 610 German tax auditors covering 791 audited firms, their research sheds light on which individual auditor characteristics matter most and how smarter allocation of auditors can improve audit efficiency. It also highlights an important fairness implication: tax audit outcomes can depend on which auditor is assigned.

Tax administrations aim to use the resources they are given effectively. They want to make the most of limited funding or use additional resources strategically to increase revenue and demonstrate fiscal responsibility. To spend their funds most efficiently on recruitment or training, they need information on the most efficiency-relevant auditor characteristics (knowledge vs. soft skills). However, despite their economic importance, the evidence on which individual tax-auditor traits matter most for audit efficiency (measured in more additional taxes per day) is limited.

The study distinguishes between two broad sets of auditor characteristics:

Soft skills: work motivation, stress resistance, professional skepticism

Knowledge: general audit experience, firm-specific experience, theoretical knowledge acquired through training

Soft skills and technical knowledge are equally important

One might expect individual tax auditors to have limited influence on audit results because they are legally required to assess the correct tax liability, and in most countries their compensation is not linked to the amount of additional tax assessed. However, these results paint a more nuanced picture: Motivation, stress resistance, professional skepticism, and training-based expertise stand out. For each of these characteristics, audit efficiency is roughly 22–29% higher. HR and training managers can directly benefit by using these findings to design more effective recruitment, training and performance monitoring policies. They can, for example, invest in both soft skills as well as technical knowledge training.

More experience and high motivation are a key combination in complex cases

The findings also demonstrate that practical experience (general and firm-specific) and high motivation combined matter especially in complex cases. As a result, managers responsible for case allocation should assign their auditors strategically. Motivated and experienced auditors should take over complex cases. Less complex cases can be handled by less experienced and less motivated auditors without large efficiency losses.

Relevance for Transparency Research and regulator implications

From a broader perspective, the study raises an important fairness and transparency concern: audit outcomes are partly influenced by which auditor is assigned. In complex tax systems transparency is not only determined by tax rules, but whether those rules are enforced consistently and effectively — an essential condition for a credible and predictable tax system. These findings show that audit efficiency depends systematically on individual auditor characteristics such as motivation, professional skepticism, training, and experience. This means that personnel policies and allocation decisions play a key role in shaping how tax regulation works in practice.

Regulators and public-sector stakeholders therefore benefit from enforcement strategies that explicitly account for these human factors, improving both efficiency and fairness. Society and public budgets benefit indirectly through more cost-effective enforcement, higher revenues, and greater fiscal capacity.

To cite this blog:

Blaufus, K., Bock, J. (2026). Why auditor characteristics matter for tax audit efficiency and transparency. TRR 266 Accounting for Transparency Blog. https://www.accounting-for-transparency.de/why-auditor-characteristics-matter-for-tax-audit-efficiency-and-transparency