Journal of Business Ethics

, Volume 17, Issue 12, pp 1265–1279 | Cite as

The Ethical Environment of Tax Practitioners: Western Australian Evidence

  • Rex L. Marshall
  • Robert W. Armstrong
  • Malcolm Smith


This study examines Australian tax agents' perceptions of the ethical environment in which they practice, within the context of an income tax system based on self-assessment principles. The research identifies and ranks an inventory of ethical issues in terms of perceived frequency of occurrence and importance to Western Australian tax agents. In addition, the extent and influence of ethical concerns in the profession are evaluated.

The study has determined that the most frequently cited ethical issue is the failure to make reasonable enquiries where information or documentation provided by a client appears to be inaccurate or incomplete. The most important ethical problem is a failure to ensure confidentiality with regard to privileged client information. When the frequency of occurrence and importance means are compared, inadequate technical competence, failure to make reasonable enquiries/conduct research, continuing to act for a client where there is incorrect information, and conflicts in distinguishing between tax planning and tax avoidance emerge as the ‘high frequency/high importance’ issues. Although acknowledging the potential for unethical actions in tax practice, Western Australian tax agents consider that they carry out their professional activities within an ethical environment.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Armstrong, R. W.: 1992, ‘An Empirical Investigation of International Marketing Ethics: Problems Encountered by Australian Firms’, Journal of Business Ethics 11, 161–172.Google Scholar
  2. Ayres, F. L., B. R. Jackson and P. S. Hite: 1989, ‘The Economic Benefits of Regulation: Evidence from Professional Tax Preparers’, The Accounting Review LXIV(2) (April), 300–311.Google Scholar
  3. Bandy, D., A. J. Judd and C. Kelliher: 1993, ‘Dealing with Shades of Gray: The Realistic Possibility Standard’, Journal of Accountancy (December), 51–58.Google Scholar
  4. Becker, H. and D. J. Fritzsche: 1987, ‘Business Ethics: A Cross-cultural Comparison of Managers' Attitudes’, Journal of Business Ethics 6, 289–295.Google Scholar
  5. Boccabella, D. A.: 1993, ‘Legal Professional Privilege: The Case for Tax Accountants' Clients’, Taxation in Australia (February), 391–397.Google Scholar
  6. Boucher, T. P.: 1993, ‘Paying Tax – Simply the Right Thing to Do’, The CCH Journal of Australian Taxation (October/November 1993), 50–56.Google Scholar
  7. Carmines, E. G. and R. A. Zeller: 1979, ‘Reliability and Validity Assessment’, in J. L. Sullivan (ed.), Sage University Paper Series on Quantitative Applications in the Social Sciences 07-017 (Sage Pubns, Beverly Hills and London).Google Scholar
  8. Carmody, M.: 1994, ‘Tax Collection: Only What's Properly Payable’, Taxation in Australia (December 1993/January 1994), 339–340.Google Scholar
  9. Castle, D.: 1994, ‘Can Lawyers Still be Tax Agents’, Law Society Journal (December), 45–48.Google Scholar
  10. Chonko, L. B. and S. D. Hunt: 1985, ‘Ethics and Marketing Management: An Empirical Examination’, Journal of Business Research 13, 339–359.Google Scholar
  11. Collins, K. M., C. J. O'Neil and J. M. Cathey: 1990, ‘Tax Practitioners' Reactions to Return Preparer Penalties’, Advances in Taxation 3, 15–43.Google Scholar
  12. Collins, J. H., V. C. Milliron and D. R. Toy: 1990, ‘Factors Associated with Household Demand for Tax Preparers’, Journal of the American Taxation Association (Fall), 9–25.Google Scholar
  13. Erard, B.: 1993,‘Taxation with Representation: An Analysis of the Role of Tax Practitioners in Tax Compliance’, Journal of Public Economics 52, 163–197.Google Scholar
  14. Erard, B.: 1990, The Impact of Tax Practitioners on Tax Compliance: A Research Summary (November), Paper presented at the IRS Research Conference, Washington, D.C.Google Scholar
  15. Finn, D. W., L. B. Chonko and S. D. Hunt: 1988, ‘Ethical Problems in Public Accounting: the View from the Top’, Journal of Business Ethics 7, 605–615.Google Scholar
  16. Flory, S. M., T. J. Phillips, R. E. Reidenbach and D. P. Robin: 1992, ‘A Multidimensional Analysis of Selected Ethical Issues in Accounting’, The Accounting Review 67 (April), 284–302.Google Scholar
  17. Gordon, R. W.: 1988, ‘The Independence of Lawyers’, 68 Boston University Law Review I, 1–83.Google Scholar
  18. Handeleman, G. T.: 1989, ‘Constraining Aggressive Return Advice’, Virginia Tax Review 9, 77–107.Google Scholar
  19. Hite, P. A., T. Stock and C. B. Cloyd: 1992, ‘Reason for Preparer Usage by Small Business Owners’, The National Public Accountant (February), 20–26.Google Scholar
  20. Hunt, S. D. and S. Vitell: 1986, ‘A General Theory of Marketing Ethics’, Journal of Macro Marketing (Spring), 5–16.Google Scholar
  21. Jackson, B., V. Milliron and D. Toy: 1988, ‘Tax Practitioners and the Government’, Tax Notes (October), 333–341.Google Scholar
  22. Kerlinger, K. A.: 1973, Multiple Regression Analysis in Behavioural Science (Holt, Rinehart and Winston, New York).Google Scholar
  23. Klepper, S., M. Mazur and D. Nagin: 1991, ‘Expert Intermediaries and Legal Compliance: the Case of Tax Preparers’, Journal of Law and Economics 34, 205–299.Google Scholar
  24. Klepper, S. and D. Nagin: 1989, ‘Tax, Compliance and Perceptions of the Risks of Detection and Criminal Prosecution’, Law and Society Review 23(2), 209–240.Google Scholar
  25. Leslie, L. R.: 1972, ‘Are High Response Rates Essential to Valid Surveys’, Social Science Research 1, 323–334.Google Scholar
  26. Leung, P., B. J. Cooper and T. Gavin: 1993, Professional Ethics: An Analysis of the Preliminary Findings of a Survey of Australian Accountants, Paper presented at the Accounting Association of Academics in Australia and New Zealand.Google Scholar
  27. Lewis, P. V.: 1985, ‘Defining ‘Business Ethics’: Like Nailing Jello to a Wall’, Journal of Business Ethics 4, 377–383.Google Scholar
  28. Mazur, M. and D. Nagin: 1987, Tax Preparers and Tax Compliance: A Theoretical and Empirical Analysis, Paper presented at the Role of Tax Practitioners in the Tax system, Research Conference (November) (IRS, Washington, D.C.)Google Scholar
  29. National Review of Standards for the Tax Profession: 1994, ‘Tax Services for the Public’, Australian Government Publishing Service.Google Scholar
  30. Newberry, K. J., P. M. J. Reckers and R. W. Wyndelts: 1993, ‘An Examination of Tax Practitioner Decisions: The Role of Preparer Sanctions and Framing Effects Associated with Client Condition’, Journal of Economic Psychology 14, 439–452.Google Scholar
  31. Roach, P. M.: 1994, ‘Tax Agents and Trojan Horses’, Charter (May), 22–24.Google Scholar
  32. Russell, D.: 1994, ‘Professional Conduct: The Clients' Interest Always Takes Priority’, Taxation in Australia (March), 431–432.Google Scholar
  33. Schweikart, J. A.: 1992, ‘Cognitive-Contingency Theory and the Study of Ethics in Accounting’, Journal of Business Ethics 11, 471–478.Google Scholar
  34. Shapiro, L. S.: 1986, ‘Professional Responsibility in the IRS’, The Tax Adviser (March), 136–143.Google Scholar
  35. Tomasic, R. and B. Pentony: 1991, ‘Tax Compliance and the Rule of Law: From Legalism to Administrative Procedure’, Australian Tax Forum, 87–116.Google Scholar
  36. Vitell, S. J. and D. L. Davis: 1990, ‘Ethical Beliefs of MIS Professionals: The Frequency and Opportunity for Unethical Behaviour’, Journal of Business Ethics 9, 63–70.Google Scholar

Copyright information

© Kluwer Academic Publishers 1998

Authors and Affiliations

  • Rex L. Marshall
  • Robert W. Armstrong
  • Malcolm Smith

There are no affiliations available

Personalised recommendations