EVIDENCE EVALUATION AND AGGRESSIVE REPORTING IN AMBIGUOUS TAX SITUATIONS.

摘要

When faced with ambiguous tax issues, accountants do not make simple normative decisions regarding the correctness of a particular tax position (Johnson, 1993). Rather, they may consider other factors and their effects on the accountant and client (McGill, 1988). This study tests a model of how evidence evaluation affects reporting decisions and examines the effect of three variables that are part of the decision making environment of tax professionals: changing professional standards, justification, and advocacy.; The research questions were addressed in an experiment using tax practitioners performing a tax research task. Subjects were presented with information in case format, including facts, an issue, relevant authority, and a penalty standard. The initial standard was varied between subjects. The case was designed to be ambiguous so that different decisions could be supported by the evidence given. Subjects in the justification condition wrote a memorandum supporting their position. Subjects then determined the strength of the evidence, the correct reporting position, their recommendation, and their confidence in the recommendation. Finally, all subjects answered the same questions under a different professional standard.; The results of the experiment indicate that the model of evidence evaluation and decision making captures tax practitioners' decision making process. As evidence evaluation increases in strength, the aggressiveness of reporting position judgments increases. As the aggressiveness of reporting position judgments increases, so does the aggressiveness of client recommendations.; The factors of tax practice that were examined in this study do seem to influence tax research judgments. Penalty standards did not influence subjects' initial judgments, but did influence subsequent judgments. This result should be of interest to policy makers. For penalty standards to have an effect on tax practitioners, they must be made salient. Justification increased both the variance and the aggressiveness of judgments, suggesting that the process of preparing a memo affects the judgments themselves. The results with respect to advocacy depend on which measure of advocacy is used. Advocacy did not appear to affect evidence strength judgments, but did affect judgments of reporting position and recommendation. Stronger advocates made more aggressive judgments. Finally, there was only weak evidence that justifications, advocacy, and standards interact to affect judgments.