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Smoke and mirrors: Corporate social responsibility and tax avoidance

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  • Sikka, Prem

Abstract

The bourgeoning corporate social responsibility literature has paid little attention to organised tax avoidance by companies even though it has real consequences for the life chances of millions of people. Companies legitimise their social credentials by making promises of responsible and ethical conduct, but organisational culture and practices have not necessarily been aligned with publicly espoused claims. This paper draws attention to the gaps between corporate talk, decisions and action, or what may be characterised as organised hypocrisy. Its persistence can become a liability and threaten the welfare of the company, its employees and its executives. The paper provides examples to show how companies, including major accountancy firms, make promises of responsible conduct, but indulge in tax avoidance and evasion. It also shows that the exposure of contradictions between talk and action has yielded negative outcomes.

Suggested Citation

  • Sikka, Prem, 2010. "Smoke and mirrors: Corporate social responsibility and tax avoidance," Accounting forum, Elsevier, vol. 34(3), pages 153-168.
  • Handle: RePEc:eee:accfor:v:34:y:2010:i:3:p:153-168
    DOI: 10.1016/j.accfor.2010.05.002
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    References listed on IDEAS

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    Cited by:

    1. Jeffrey, Cynthia & Perkins, Jon D., 2014. "The Relationship between Energy Taxation and Business Environmental Protection Expenditures in the European Union," The International Journal of Accounting, Elsevier, vol. 49(4), pages 403-425.
    2. repec:eee:crpeac:v:52:y:2018:i:c:p:35-47 is not listed on IDEAS
    3. repec:eee:crpeac:v:22:y:2011:i:3:p:316-332 is not listed on IDEAS
    4. repec:eee:accfor:v:37:y:2013:i:1:p:15-28 is not listed on IDEAS
    5. repec:eee:accfor:v:37:y:2013:i:4:p:315-324 is not listed on IDEAS
    6. Weber, Stefan, 2014. "Der Einfluss von Steuern auf Corporate Social Responsibility-Instrumente: Dargestellt am Beispiel von Spenden," arqus Discussion Papers in Quantitative Tax Research 159, arqus - Arbeitskreis Quantitative Steuerlehre.
    7. repec:kap:jbuset:v:147:y:2018:i:3:d:10.1007_s10551-015-2978-5 is not listed on IDEAS
    8. repec:eee:accfor:v:38:y:2014:i:4:p:258-273 is not listed on IDEAS
    9. Huseynov, Fariz & Klamm, Bonnie K., 2012. "Tax avoidance, tax management and corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 804-827.
    10. Mihai-Bogdan AFRASINEI & Iuliana Eugenia GEORGESCU & Costel ISTRATE, 2016. "The Influence Of The Connections Of Romanian Non-Listed Firms To Tax Havens On Their Profitability," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8(4), pages 572-596, December.
    11. Asongu, Simplice A & Nwachukwu, Jacinta C., 2016. "Transfer Mispricing as an Argument for Corporate Social Responsibility," MPRA Paper 75413, University Library of Munich, Germany.
    12. Paolo Antonetti & Stan Maklan, 2016. "An Extended Model of Moral Outrage at Corporate Social Irresponsibility," Journal of Business Ethics, Springer, vol. 135(3), pages 429-444, May.
    13. Diego Ravenda & Josep Argilés-Bosch & Maika Valencia-Silva, 2015. "Labor Tax Avoidance and Its Determinants: The Case of Mafia Firms in Italy," Journal of Business Ethics, Springer, vol. 132(1), pages 41-62, November.
    14. Antonetti, Paolo & Anesa, Mattia, 2017. "Consumer reactions to corporate tax strategies: The role of political ideology," Journal of Business Research, Elsevier, vol. 74(C), pages 1-10.
    15. repec:eee:accfor:v:39:y:2015:i:1:p:1-18 is not listed on IDEAS
    16. Elaine Doyle & Jane Frecknall-Hughes & Barbara Summers, 2014. "Ethics in Tax Practice: A Study of the Effect of Practitioner Firm Size," Journal of Business Ethics, Springer, vol. 122(4), pages 623-641, July.
    17. Jeffrey, Cynthia & Perkins, Jon D., 2015. "The association between energy taxation, participation in an emissions trading system, and the intensity of carbon dioxide emissions in the European Union," The International Journal of Accounting, Elsevier, vol. 50(4), pages 397-417.
    18. repec:eee:accfor:v:37:y:2013:i:1:p:1-14 is not listed on IDEAS
    19. Hanna Filipczyk, 2015. "Impact of the Credit Rating Agencies on the Financial Crisis 2007–2009," Annales. Ethics in Economic Life, University of Lodz, Faculty of Economics and Sociology, vol. 18(4), pages 111-127, December.
    20. repec:eee:crpeac:v:33:y:2015:i:c:p:5-23 is not listed on IDEAS
    21. Krichewsky, Damien, 2014. "The socially responsible company as a strategic second-order observer: An Indian case," MPIfG Discussion Paper 14/10, Max Planck Institute for the Study of Societies.
    22. repec:eee:accoun:v:52:y:2017:i:4:p:303-318 is not listed on IDEAS
    23. repec:eee:crpeac:v:22:y:2011:i:8:p:811-827 is not listed on IDEAS
    24. AnnMarie Bennett & Breda Murphy, 2017. "The Tax Profession: Tax Avoidance and the Public Interest," Economics, Finance and Accounting Department Working Paper Series n286-17.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    25. repec:eee:worbus:v:53:y:2018:i:2:p:177-193 is not listed on IDEAS

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