IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v164y2020i1d10.1007_s10551-018-4081-1.html
   My bibliography  Save this article

The Influence of Ethical Codes of Conduct on Professionalism in Tax Practice

Author

Listed:
  • Darius Fatemi

    (Northern Kentucky University)

  • John Hasseldine

    (University of New Hampshire)

  • Peggy Hite

    (Indiana University)

Abstract

Professional integrity is a fundamental principle of the International Ethics Standards Board for Accountants Code of Ethics (IESBA, in Code of ethics for professional accountants, IFAC, New York; IESBA, Code of ethics for professional accountants, IFAC, New York, 2016). This does not apply directly to members of a particular professional body, but rather member organizations from around the globe are required to adopt a code no less stringent than the principles in the IESBA Code. Hence, all professional accountants are required to possess integrity as a core ethical principle. In the USA, certified public accountants must, in addition, also adhere to the principle of client advocacy in relation to their tax clients. Despite extensive prior literature on accounting ethics, firm culture, and ethical codes, no prior research has tested whether the communication of an Integrity ethical standard actually affects practitioners’ actual judgments and decisions. In this study, we use brief interventions to determine whether a prime of two ethical professional standards (Integrity; Advocacy) affects tax practitioners’ recommendations to their clients. One implication for professionalism in tax practice is our finding that a brief intervention of professional standards can directly impact on practitioners’ judgments. Most notably, a joint presentation of Advocacy and Integrity leads to contrasting results that depend on the order of the intervention. In sum, when the Integrity (Advocacy) standard was presented before the Advocacy (Integrity) standard, tax practitioners were significantly less (more) likely to choose a tax-favorable outcome. That is, the order of professional ethical standard intervention significantly affects tax practitioners’ judgments.

Suggested Citation

  • Darius Fatemi & John Hasseldine & Peggy Hite, 2020. "The Influence of Ethical Codes of Conduct on Professionalism in Tax Practice," Journal of Business Ethics, Springer, vol. 164(1), pages 133-149, June.
    • Handle: RePEc:kap:jbuset:v:164:y:2020:i:1:d:10.1007_s10551-018-4081-1
    DOI: 10.1007/s10551-018-4081-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-018-4081-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-018-4081-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mario J. Maletta & Yue (May) Zhang, 2012. "Investor Reactions to Contrasts Between the Earnings Preannouncements of Peer Firms," Contemporary Accounting Research, John Wiley & Sons, vol. 29(2), pages 361-381, June.
    2. Dinah M. Payne & Cecily A. Raiborn, 2018. "Aggressive Tax Avoidance: A Conundrum for Stakeholders, Governments, and Morality," Journal of Business Ethics, Springer, vol. 147(3), pages 469-487, February.
    3. François Brouard & Merridee Bujaki & Sylvain Durocher & Leighann C. Neilson, 2017. "Professional Accountants’ Identity Formation: An Integrative Framework," Journal of Business Ethics, Springer, vol. 142(2), pages 225-238, May.
    4. Sally Gunz & Linda Thorne, 2017. "Introduction to Thematic Symposium on Accounting Professionalism," Journal of Business Ethics, Springer, vol. 142(2), pages 199-201, May.
    5. Cooper, David J. & Robson, Keith, 2006. "Accounting, professions and regulation: Locating the sites of professionalization," Accounting, Organizations and Society, Elsevier, vol. 31(4-5), pages 415-444.
    6. Bayou, Mohamed E. & Reinstein, Alan & Williams, Paul F., 2011. "To tell the truth: A discussion of issues concerning truth and ethics in accounting," Accounting, Organizations and Society, Elsevier, vol. 36(2), pages 109-124, February.
    7. Renu Desai & Robin Roberts, 2013. "Deficiencies in the Code of Conduct: The AICPA Rhetoric Surrounding the Tax Return Preparation Outsourcing Disclosure Rules," Journal of Business Ethics, Springer, vol. 114(3), pages 457-471, May.
    8. J. Gregory Jenkins & Velina Popova & Mark D. Sheldon, 2018. "In Support of Public or Private Interests? An Examination of Sanctions Imposed Under the AICPA Code of Professional Conduct," Journal of Business Ethics, Springer, vol. 152(2), pages 523-549, October.
    9. Donna Bobek & Amy Hageman & Robin Radtke, 2015. "The Influence of Roles and Organizational Fit on Accounting Professionals’ Perceptions of their Firms’ Ethical Environment," Journal of Business Ethics, Springer, vol. 126(1), pages 125-141, January.
    10. Mulligan, Emer & Oats, Lynne, 2016. "Tax professionals at work in Silicon Valley," Accounting, Organizations and Society, Elsevier, vol. 52(C), pages 63-76.
    11. Carnegie, Garry D. & Napier, Christopher J., 2010. "Traditional accountants and business professionals: Portraying the accounting profession after Enron," Accounting, Organizations and Society, Elsevier, vol. 35(3), pages 360-376, April.
    12. H. Scott Asay & Tim Brown & Mark W. Nelson & T. Jeffrey Wilks, 2017. "The Effects of Out†of†Regime Guidance on Auditor Judgments About Appropriate Application of Accounting Standards," Contemporary Accounting Research, John Wiley & Sons, vol. 34(2), pages 1026-1047, June.
    13. Lisa Baudot & Robin W. Roberts & Dana M. Wallace, 2017. "An Examination of the U.S. Public Accounting Profession’s Public Interest Discourse and Actions in Federal Policy Making," Journal of Business Ethics, Springer, vol. 142(2), pages 203-220, May.
    14. Kathryn Kadous & Anne M. Magro, 2001. "The Effects of Exposure to Practice Risk on Tax Professionals' Judgements and Recommendations," Contemporary Accounting Research, John Wiley & Sons, vol. 18(3), pages 451-475, September.
    15. Andrew West, 2018. "After Virtue and Accounting Ethics," Journal of Business Ethics, Springer, vol. 148(1), pages 21-36, March.
    16. Sikka, Prem, 2009. "Financial crisis and the silence of the auditors," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 868-873, August.
    17. Jane Frecknall-Hughes & Peter Moizer & Elaine Doyle & Barbara Summers, 2017. "An Examination of Ethical Influences on the Work of Tax Practitioners," Journal of Business Ethics, Springer, vol. 146(4), pages 729-745, December.
    18. Elaine Doyle & Jane Frecknall-Hughes & Barbara Summers, 2009. "Research Methods in Taxation Ethics: Developing the Defining Issues Test (DIT) for a Tax-Specific Scenario," Journal of Business Ethics, Springer, vol. 88(1), pages 35-52, August.
    19. Suddaby, Roy & Gendron, Yves & Lam, Helen, 2009. "The organizational context of professionalism in accounting," Accounting, Organizations and Society, Elsevier, vol. 34(3-4), pages 409-427, April.
    20. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdelmoety, Ziad Hassan & Aboul-Dahab, Sameh & Agag, Gomaa, 2022. "A cross cultural investigation of retailers commitment to CSR and customer citizenship behaviour: The role of ethical standard and value relevance," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeff Everett & Constance Friesen & Dean Neu & Abu Shiraz Rahaman, 2018. "We Have Never Been Secular: Religious Identities, Duties, and Ethics in Audit Practice," Journal of Business Ethics, Springer, vol. 153(4), pages 1121-1142, December.
    2. Dunne, Neil J. & Brennan, Niamh M. & Kirwan, Collette E., 2021. "Impression management and Big Four auditors: Scrutiny at a public inquiry," Accounting, Organizations and Society, Elsevier, vol. 88(C).
    3. Dermarkar, Simon & Hazgui, Mouna, 2022. "How auditors legitimize commercialism: A micro-discursive analysis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 83(C).
    4. AnnMarie Bennett & Breda Murphy, 2017. "The Tax Profession: Tax Avoidance and the Public Interest," Economics Department Working Paper Series n286-17.pdf, Department of Economics, National University of Ireland - Maynooth.
    5. Daoust, Laurence, 2020. "Playing the Big Four recruitment game: The tension between illusio and reflexivity," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 66(C).
    6. Céline Baud & Marion Brivot & Darlene Himick, 2021. "Accounting Ethics and the Fragmentation of Value," Journal of Business Ethics, Springer, vol. 168(2), pages 373-387, January.
    7. Doyle, Elaine & Frecknall-Hughes, Jane & Summers, Barbara, 2022. "Ethical reasoning in tax practice: Law or is there more?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 48(C).
    8. Stenka, Renata & Jaworska, Sylvia, 2019. "The use of made-up users," Accounting, Organizations and Society, Elsevier, vol. 78(C).
    9. Smith-Lacroix, Jean-Hubert & Durocher, Sylvain & Gendron, Yves, 2012. "The erosion of jurisdiction: Auditing in a market value accounting regime," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(1), pages 36-53.
    10. Peter E. Mudrack & E. Sharon Mason, 2022. "Vignette Themes and Moral Reasoning in Business Contexts: The Case for the Defining Issues Test," Journal of Business Ethics, Springer, vol. 181(4), pages 979-995, December.
    11. Stringfellow, Lindsay & McMeeking, Kevin & Maclean, Mairi, 2015. "From four to zero? The social mechanisms of symbolic domination in the UK accounting field," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 27(C), pages 86-100.
    12. Claire France Picard & Sylvain Durocher & Yves Gendron, 2013. "From Meticulous Professionals To Superheroes Of The Business World: A Historical Portrait Of A Cultural Change In The Field Of Accountancy," Post-Print hal-00993019, HAL.
    13. Marie Caussimont & David Carassus, 2015. "L’audit financier en contexte territorial : vers un audit de performance de la gestion locale ?," Post-Print hal-02141946, HAL.
    14. François Brouard & Merridee Bujaki & Sylvain Durocher & Leighann C. Neilson, 2017. "Professional Accountants’ Identity Formation: An Integrative Framework," Journal of Business Ethics, Springer, vol. 142(2), pages 225-238, May.
    15. Bertrand Malsch & Yves Gendron, 2013. "Re-Theorizing Change: Institutional Experimentation and the Struggle for Domination in the Field of Public Accounting," Journal of Management Studies, Wiley Blackwell, vol. 50(5), pages 870-899, July.
    16. repec:mth:ijafr8:v:8:y:2018:i:2:p:166-178 is not listed on IDEAS
    17. Brivot, Marion & Cho, Charles H. & Kuhn, John R., 2015. "Marketing or parrhesia: A longitudinal study of AICPA's shifting languages in times of turbulence," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 31(C), pages 23-43.
    18. Bert Scholtens & Feng‐Ching Kang, 2013. "Corporate Social Responsibility and Earnings Management: Evidence from Asian Economies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 20(2), pages 95-112, March.
    19. Humphrey, Christopher & Loft, Anne & Woods, Margaret, 2009. "The global audit profession and the international financial architecture: Understanding regulatory relationships at a time of financial crisis," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 810-825, August.
    20. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2023. "Effect of Goods and Service Tax System on Business Performance of Micro, Small and Medium Enterprises," SAGE Open, , vol. 13(2), pages 21582440231, June.
    21. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:164:y:2020:i:1:d:10.1007_s10551-018-4081-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.