Tax audit is an activity or a set of activities performed by tax auditors to determine taxpayer’s correct tax liabilities for a particular accounting or tax period. Many countries have adopted a self-assessment system (SAS) including Ethiopia; The main objective of this study was to assess the tax audit practice and its challenge in the case of large taxpayers’ office and tries to assess the application of automation in audit, the proficiency of auditors, functions of audit in the reduction of tax evasions and avoidances and how it is exercised to increase the compliance level of taxpayers. Descriptive method was used to analyze the collected data.

Keywords : Tax Audit, SIGTAS, Evasion, Avoidance and Compliance.