The Role of the ASYCUDA System in Supporting Internal Audit Procedures for Customs Collection: A Study of the Integration Challenges with the Central Bank and the General Commission for Taxes in Iraq

Abstract

This study aims to analyze the challenges which facing the operation of the ASYCUDA system amidst Iraq's transition from a manual customs system to an integrated electronic platform, specifically through its integration with the Central Bank of Iraq (CBI) and the General Commission for Taxes (GCT). The study adopted a descriptive-analytical approach, utilizing a questionnaire to collect data from a random sample of (130) individuals, of which (110) valid responses (a responses rate of (84.6%) were obtained from) auditors and accountants working in these entities. Data were analyzed using descriptive statistical methods and linear regression analysis to test the study's hypotheses. The results indicated that the level of integration achieved a moderate level. Furthermore, the findings revealed a statistically significant impact of technical, operational, and institutional challenges that hinder effective integration. The strongest impact was observed in the role of internal audit through standardizing procedures via the automated system and reducing the risks of manipulation and public revenue loss by establishing electronic audit trails and appropriate auditing procedures to obtain objective evidence. Additionally, adopting importer codes as a prerequisite for registration in the ASYCUDA system to process foreign currency transfers imposed a robust enforcement mechanism. The main conclusions of the study show that the ASYCUDA system has achieved wide deployment across federal border crossings, covering (21) ports (up to the writing of this study) and documenting revenue increases over two years due to applying current tariff rates approved under Law No. (22) of 2010 and reducing manual discretion. However, integration with the Central Bank of Iraq and the General Commission for Taxes remains partial and contested.