DISCUSSION OF The Role of Client Advocacy in the Development of Tax Professionals’ Advice

2010 ◽  
Vol 32 (1) ◽  
pp. 53-57
Author(s):  
Jennifer K. Schafer
Keyword(s):  
Tax Professionals ◽  
Client Advocacy

Do Tax Professionals Act Like Auditors when Evaluating Tax-Related Audit Evidence?

2021 ◽  
Author(s):  
Donna D. Bobek ◽  
Laura N. Feustel ◽  
Scott D. Vandervelde
Keyword(s):  
Income Tax ◽  
Team Member ◽  
Financial Statement ◽  
Functional Area ◽  
Professional Skepticism ◽  
Tax Professionals ◽  
Audit Evidence ◽  
Client Advocacy

The audit of the financial statement income tax accounts is ultimately the responsibility of the audit engagement team; however, tax professionals are often involved because of their knowledge of the tax functional area. Auditors are expected to exercise professional skepticism and independence when performing audits, while tax professionals are expected to be advocates for their tax clients. This study investigates whether the auditor and/or tax professionals’ typical role influences how they evaluate evidence on an audit engagement, especially when provided evidence by individuals with whom they are closely affiliated. The results of an experiment with experienced auditors and tax professionals, suggest that despite differing in their trait skepticism and client advocacy attitudes, tax professionals and auditors make similar judgments when in the role of an audit engagement team member. We also find evidence both auditors and tax professionals are more persuaded by individuals with whom they have a closer affiliation.

The Role of Client Advocacy in the Development of Tax Professionals’ Advice

2010 ◽  
Vol 32 (1) ◽  
pp. 25-51 ◽  
Author(s):  
Donna D. Bobek ◽  
Amy M. Hageman ◽  
Richard C. Hatfield
Keyword(s):  
Decision Making Process ◽  
Client Characteristics ◽  
Attitude Theory ◽  
Primary Responsibility ◽  
Evidence Evaluation ◽  
Tax Professionals ◽  
Decision Outcomes ◽  
Client Advocacy ◽  
Context Specific

ABSTRACT: A primary responsibility of tax professionals is to be an advocate for their clients (AICPA 2000). Prior studies have shown mixed results on how the advocate role influences tax professionals’ decision processes and outcomes (e.g., Cloyd and Spilker 1999; Davis and Mason 2003; Barrick et al. 2004; Kahle and White 2004). In this study, we consider how advocacy may be at least partially context-specific, introduce the construct of client-specific advocacy, and thoroughly examine the influence of advocacy attitudes on a number of steps in the judgment and decision-making process. Consistent with attitude theory, we report experimental results that suggest client characteristics influence tax professionals’ advocacy attitudes. We also find that client-specific advocacy influences process variables such as the weighting of evidence and decision outcomes such as the recommendation of tax advice. The results of the study indicate that tax professionals may be unintentionally influenced by client attributes when making judgments and may have difficulty separating their advocacy and evidence evaluation roles.

Mr. and Mrs. Smith: A Student Introduction to Federal Tax Compliance and Documentation

2015 ◽  
Vol 31 (1) ◽  
pp. 119-132 ◽  
Author(s):  
Michaele L. Morrow ◽  
Shane R. Stinson
Keyword(s):  
Communication Skills ◽  
Professional Practice ◽  
Income Tax ◽  
Tax Compliance ◽  
Personal Income Tax ◽  
Initial Information ◽  
Face To Face ◽  
Client Advocacy ◽  
Tax Practice

ABSTRACT In this case, students assume the role of new accounting staff tasked with the preparation of a personal income tax return and supporting documentation for a client of their firm. Students are provided prior year work papers and client communications, a copy of the prior year's tax return, as well as a letter and supporting documents from the client for the current year. To complete the case, students generate questions based on the initial information provided, meet face-to-face with the client, and roll forward a set of electronic work papers before submitting a complete current year engagement file for senior review. This case adds work papers and client interaction to the traditional tax compliance case to reinforce both the technical and communication skills valued in professional practice. The formulation of questions for the client also allows students to practice discussing technical topics in a non-technical manner and underscores the required balance between attitudes of client advocacy stressed in professional tax practice and legal requirements for “good-faith” tax return reporting. This case is appropriate for an individual income tax course at either the undergraduate or graduate level, and can be easily adapted to increase or decrease difficulty.

The Influence of Biased Tax Research Memoranda on Supervisors' Initial Judgments in the Review Process

2004 ◽  
Vol 26 (1) ◽  
pp. 1-19 ◽  
Author(s):  
John A. Barrick ◽  
C. Bryan Cloyd ◽  
Brian C. Spilker
Keyword(s):  
Review Process ◽  
Confirmation Bias ◽  
Theoretical Framework ◽  
The Other ◽  
Other Hand ◽  
Tax Professionals ◽  
Realistic Possibility ◽  
Client Advocacy ◽  
Tax Research ◽  
Staff Level

This study experimentally investigates the effects of confirmation bias underlying staff-level tax research on supervisors' initial assessments and recommendations made during the review process for tax research memoranda. The theoretical framework underlying our hypotheses posits that tax professionals strive to make recommendations that meet both accuracy and advocacy objectives. Participants in our study addressed a client scenario in which both objectives could not be met because the client-preferred position did not have a “realistic possibility” of being successfully defended on its merits. In this context, we find that supervisors are more persuaded by an unbiased memo correctly concluding that the client-preferred position is not appropriate than by a biased memo reaching the same conclusion. This result suggests that when tax research memoranda are not consistent with the client advocacy objective, professionals are more persuaded by memoranda that fulfill their accuracy objective. On the other hand, we also find that supervisors are more persuaded by a biased memo incorrectly concluding in favor of the client's preferred position than by a biased memo correctly concluding that the client-preferred position is inappropriate. This result suggests that, when neither memorandum meets the accuracy objective, supervisors are more persuaded by memoranda that offer encouragement that their advocacy objective might be met than by those that do not. Finally, results also indicate that supervisors act to correct confirmation bias by requesting more rework of staff who prepare biased memos than of staff who prepare unbiased memos.

An examination of tax professionals' judgments: The role of experience, client condition and reciprocal obligation

1993 ◽  
Vol 7 (3) ◽  
pp. 341-357 ◽  
Author(s):  
D. Jordan Lowe ◽  
Philip M. J. Reckers ◽  
Robert W. Wyndelts
Keyword(s):  
Tax Professionals

Do Clients Share Preparers' Self-Assessment of the Extent to Which They Advocate for Their Clients?

2007 ◽  
Vol 21 (4) ◽  
pp. 411-422 ◽  
Author(s):  
Teresa Stephenson
Keyword(s):  
Large Firms ◽  
Self Assessment ◽  
Significant Difference ◽  
Tax Professionals ◽  
Tax Gap ◽  
Tax Audit ◽  
Client Advocacy ◽  
Tax Preparers ◽  
Local Firms

A conflict between the tax preparation services that tax preparers provide and the services taxpayers seek is demonstrated in the literature: tax professionals equate client advocacy with aggressive tax positions while taxpayers hire preparers to increase accuracy and reduce the probability of tax audit. Although this difference has been demonstrated at the large firms, more than half of tax preparers are at regional and local firms. This study examines tax preparers, self-employed or from local and regional firms, and their clients using an established scale—the recently developed Mason–Levy Advocacy Scale. This research measures the understanding taxpayers have of their tax preparers' self-assessed levels of client advocacy. A practically small but statistically significant difference is found. Advocacy is found to be equal between CPAs and non-CPAs—counter to prior research. Also, CPA clients and non-CPA clients are found to have similar perceptions regarding the aggressiveness of their preparers. The implications to practice are that more conservative tax preparation may satisfy clients with less risk and cost. Additionally, less aggressive tax positions will help to close the tax gap.

Client Advocacy in Action: Professional and Environmental Factors Affecting Israeli Occupational Therapists' Behaviour

1997 ◽  
Vol 64 (3) ◽  
pp. 207-215 ◽  
Author(s):  
Dalia Sachs ◽  
Ruth Linn
Keyword(s):  
Occupational Therapists ◽  
Interdisciplinary Team ◽  
Social Awareness ◽  
Functional Abilities ◽  
Factors Affecting ◽  
Work Settings ◽  
Ethnographic Interviews ◽  
Client Advocacy

Client advocacy refers to various expressions of taking a stand such as representing and supporting the interests of clients and of populations with special needs, informing them of their rights in particular situations, making sure they have all the necessary information to make an informed decision, safeguarding their rights, and promoting legislation, policy and social awareness that may affect care and quality of life through education and public activism. The purpose of the present study is to examine situations in which occupational therapists identify the need for their involvement on behalf of clients, and identify factors that affect their behaviour when they protect, represent or inform clients about their rights. In-depth ethnographic interviews were conducted with 12 Israeli registered occupational therapists representing a variety of professional specializations and work settings. From the analysis of the results three main themes were identified as follows: a) the interviewees view themselves as “guardians of morals” in relation to personal, professional and social misconduct, b) occupational therapists become advocates when mediation is needed to represent clients' functional abilities, and c) the role of client advocacy is affected and shaped by occupational therapists' perceptions and experiences of the interdisciplinary team.

The Influence of Client Preferences on Tax Professionals' Search for Judicial Precedents, Subsequent Judgments and Recommendations

1999 ◽  
Vol 74 (3) ◽  
pp. 299-322 ◽  
Author(s):  
C. Bryan Cloyd ◽  
Brian C. Spilker
Keyword(s):  
Information Search ◽  
Income Tax ◽  
Confirmation Bias ◽  
Psychological Research ◽  
Professional Standards ◽  
Tax Professionals ◽  
Tax Returns ◽  
Federal Income Tax ◽  
Client Advocacy ◽  
Advocacy Role

Tax professionals provide valuable services to clients by reducing uncertainty about how clients should report transactions on their tax returns. To reduce uncertainty, tax professionals research applicable authorities (e.g., judicial precedents) and provide assessments to clients of the level of authoritative support for client-favorable positions. Tax professionals have strong incentives to make accurate assessments of the strength of client-preferred positions so that clients will understand the level of risk associated with the reporting position. Further, tax professionals must make accurate assessments of authoritative support in order to maintain compliance with tax professional standards and Federal income tax regulations. Incentives notwithstanding, psychological research on confirmation bias suggests that tax professionals' client advocacy role may inhibit professionals' ability to search objectively for relevant tax authority which, in turn, might inhibit their ability to accurately assess authoritative support. We report the results of two studies that examine causes and effects of confirmation bias in tax information search. In study 1, we find that subjects' information searches emphasized cases with conclusions consistent with the client's desired outcome (i.e., positive cases) over cases inconsistent with the client's desired outcome (i.e., negative cases), despite the fact that positive cases were no more similar to the client's facts. Additional analyses indicate that the extent of this confirmation bias was positively related to their assessments of the likelihood that a neutral court would resolve the issue in the client's favor and this in turn increased the strength with which they recommended the client's preferred tax position. Results of study 2 indicate that confirmation bias induced by client preferences can be strong enough to not only result in inaccurate assessments of authoritative support for the client-favored position, which is problematic in and of itself, but also to lead tax professionals to make overly aggressive recommendations.

An Examination of Internal Auditor Objectivity: In-House versus Outsourcing

2004 ◽  
Vol 23 (2) ◽  
pp. 147-158 ◽  
Author(s):  
Sunita S. Ahlawat ◽  
D. Jordan Lowe
Keyword(s):  
Exploratory Study ◽  
Internal Audit ◽  
Accounting Firms ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Internal Audit Function ◽  
Big 4 ◽  
Client Advocacy

The internal audit function is evolving from its traditional oversight function to one that includes a wider spectrum of activities that add value to their organizations. In addition, economic pressures have forced many companies to consider outsourcing as an alternative. These ongoing changes have caused some concern regarding the potential lack of objectivity and independence for internal auditors. This exploratory study examines whether outsourcing of the internal audit function is susceptible to client advocacy vis-a`-vis in-house auditing, which itself may be sensitive to an employer advocacy Sixty-six practicing members of the Institute of Internal Auditors (IIA) completed a case study involving a corporate acquisition scenario. Of the 66 participants, 35 were from corporations (in-house), while the remaining 31 were from the Big 4 accounting firms (outsource). Advocacy was manipulated by asking participants to assume the role of internal auditor for either the buyer or the seller of a target division. Result s indicate that significant advocacy existed in the judgments of both in-house and outsource internal auditors. However, the extent of advocacy was less severe in the case of outsource auditors.

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