Tax Audit Pass Rate
Measures the percentage of tax audits passed without additional liabilities or penalties. A high pass rate indicates that the company's tax practices and documentation are in compliance with regulations. A lower rate might signal a need for improved internal controls.
(Number of Audits Passed / Total Audits Conducted) x 100
If a company underwent 10 tax audits in a year and passed 9 of them without additional liabilities, the Tax Audit Pass Rate would be 90%.