The purpose of this study is to explore with more rigor and detail the role of social norms in tax compliance. This study draws on Cialdini and Trost’s (The Handbook of Social Psychology: Oxford University Press, Boston, MA, 1998) taxonomy of social norms to investigate with more specificity this potentially decisive (Alm and McKee, Managerial and Decision Economics, 19:259–275, 1998) influence on tax compliance. We test our research hypotheses regarding the direct and indirect influences of social norms using a hypothetical (...) compliance scenario with 174 experienced taxpayers as participants. Factor analysis of the social norm questions successfully identified four distinct social norm constructs, in line with Cialdini and Trost (1998). Results of the path analysis show that individuals’ standards for behavior/ethical beliefs (personal norms) as well as the expectations of close others (subjective norms) directly influence tax compliance decisions, whereas general societal expectations (injunctive norms) and other individuals’ actual behavior (descriptive norms) have an indirect influence. This shows that social norms have important direct as well as indirect influences on tax compliance behavior. We also investigate a number of attitudinal variables that may be related to social norms and taxpayer compliance. The results of this study further clarify the important role that social norms have with regard to taxpayers’ compliance behavior. (shrink)

Tax compliance is a concern to governments around the world. Prior research (Alm, J. and I. Sanchez: 1995, KYKLOS 48, 3–19) has attributed unexplained inter-country differences in compliance rates to differences in social norms. Economics researchers studying tax compliance in the United States (U.S.) (see for example J. Andreoni et al.: 1998, Journal of Economic Literature 36, 818–860) have called for more attention to social (as opposed to economic) influences on tax compliance. In this study, we extend this prior research (...) by explicitly examining the role of social norms [Cialdini, R. and M. Trost: 1998, The Handbook of Social Psychology (Oxford University Press, New York)] on tax compliance in three different countries. We test our research hypotheses using a hypothetical compliance scenario, which was administered in Australia, Singapore, and the U.S. There were differences in compliance rates and social norms among the three countries. Factor analysis of the social norm questions identified three distinct social norm constructs. Two of these factors were significant in explaining tax compliance behavior. The first and most influential factor was taxpayers’ own personal moral beliefs, along with the beliefs of those close to them (e.g., friends and important others). The second significant factor represented societal views of proper behavior. We conclude that social norms help to explain tax compliance intentions and why tax compliance rates are higher than would be predicted by strictly economic models. (shrink)

A public accounting firm’s ethical environment has an important role in encouraging ethical behavior, but prior research has shown that firm leaders perceive the ethical environment of their firms to be stronger than do non-leaders : 637–654, 2010). This study draws on several research streams in management to investigate the reasons behind this discrepancy. Our online questionnaire was completed by 139 accounting professionals. We find that when non-leader accounting professionals believe that they have a meaningful role in shaping and maintaining (...) the ethical environment and/or have strong organizational fit with the accounting firm, they are more likely to perceive the ethical environment as strong and to perceive it similarly to firm leaders. That is, differences in leaders’ and non-leaders’ perceptions of the ethical environment are mediated by non-leaders’ perceptions of their role in participating in shaping and maintaining the ethical environment of their firms. Further, we find that among firm leaders, a stronger public interest orientation and a higher frequency of receiving mentoring are both associated with stronger perceptions of the ethical environment. Overall, our study is one of the first to directly test potential explanations for why firm leaders and non-leaders can have disparate views of a firm’s ethical environment. In addition, these findings provide practical feedback to practitioners on actions they can take to improve perceptions of their firms’ ethical environment. (shrink)

This article examines perceptions of tax partners and non-partner tax practitioners regarding their CPA firms’ ethical environment, as well as experiences with ethical dilemmas. Prior research emphasizes the importance of executive leadership in creating an ethical climate (e.g., Weaver et al., Acad Manage Rev 42(1):41–57, 1999; Trevino et al., Hum Relat 56(1):5–37, 2003; Schminke et al., Organ Dyn 36(2):171–186, 2007). Thus, it is important to consider whether firm partners and other employees have congruent perceptions and experiences. Based on the responses (...) of 144 tax practitioners employed at CPA firms, the results show that tax partners rate the ethical environment of their firms as stronger than non-partner tax practitioners, particularly among those who describe a self-identified ethical dilemma. Tax partners also report having encountered more of the common examples of researcher-provided ethical dilemmas than non-partner tax practitioners, although non-partners perceive that certain ethical dilemmas occur at a higher rate than partners do. Overall, this study provides evidence of a disconnect between tax partners and non-partner tax practitioners with respect to perceptions of organizational ethics. Suggestions for potential remedies are offered. (shrink)

Individuals are increasingly switching from hiring tax professionals to prepare their tax returns to self-filing with tax software, yet there is little research about how interacting with tax software influences compliance decisions. Using an experiment, we examine the effect of preparation method, tax software versus tax professional, on willingness to lie. Results from a structural equation model based on data collected from 211 actual taxpayers confirm the hypotheses and show individuals are more willing to lie to tax software than a (...) human tax professional. Our results also suggest this effect is jointly mediated by perceptions of social presence and the perceived detectability of the lie. Beyond the practical implications for tax enforcement, our findings broadly contribute to accounting and other literatures by examining the theoretical mechanisms that explain why individuals interact differently with computers versus humans. We also extend prior research on interactions between humans and computers by examining economically motivated lies. (shrink)