Record Keeping Practices and Tax Compliance of SMEs

This paper reports upon a research project which was designed to explore the relationship between the record keeping practices of small businesses and their potential exposure to tax and related business compliance problems. Overall, the research showed that there was some dissonance between perceptions and reality. All of the key stakeholders – SME owners/managers, practitioners and ATO auditors – perceived (to varying degrees) direct relationships between poor SME record keeping practices and adverse tax compliance outcomes.