There are two main groups of audits in the experiment: the "full audits" (team work) and the "short audits" (individual tasks). All firms subject to a full audit are excluded from the pool for selection of short audits.
The full audits were selected according to one of two methods: the data-driven algorithm or the tax authority. The tax authority selected a specified number of firms for audit, and we ran the algorithm to select the same number of firms within each tax office. Given capacity constraints, there are no randomly selected full audits. For each firm selected via the algorithm, we provided the respective inspector with information on the three main reasons why the firm was selected (the "flags"). This is similar to the "risk criteria" that the inspectors need to provide when nominating a firm for audit according to the discretionary procedure. The sequencing of full audits was determined by the tax authority based on their considerations of the complexity of the case and capacity constraints. However, we provided managers with a suggested sequencing, in which we randomly alternated inspector-selected and algorithm-selected audits. Moreover, we encouraged tax office managers to strive to alternate between inspector-selected and algorithm-selected audits in their annual planning.
Short audits are more numerous than full audits and thus allow for more experimental sub-treatments to test for how selection methods and information availability influence audit outcomes. For this type of audit, we have three kinds of audits: audits selected by tax inspectors, audits selected by the algorithm and also randomly-selected audits (which can all overlap with each other). The algorithm-selected and randomly selected audits were randomly assigned to individual tax inspectors within tax offices. Each tax inspector is thus provided with a list of firms to audit.
Cross-randomized with the selection method, we provided an information treatment for the audit cases. The three treatments are 1) no additional information on the case, 2) the three most important risk indicators detected by the algorithm, or 3) the three most important risk indicators and the taxpayer's data (tax declarations and third-party reports for the last four years) organized in an excel document. Note that we run the algorithm for all firms and thus obtain the risk score and risk indicators also for firms selected by the tax inspectors, so that even if the firm was not selected by the algorithm, there is a risk score assigned to it. Moreover, in the case of "short audits", the sequencing of the audits is randomized for each inspector, so that the inspector cannot choose which firm to audit first, among those that were assigned to him/her.