Title

Social responsibility, machiavellianism and tax avoidance : a study of Hong Kong tax professionals

Document Type

Journal article

Source Publication

Accounting, Auditing & Accountability Journal

Publication Date

9-1-2008

Volume

21

Issue

5

First Page

695

Last Page

720

Keywords

Business ethics, Corporate social responsibility, Hong Kong, Political theory, Tax planning

Abstract

Purpose - The purpose of this paper is to investigate the effects of attitudes toward the perceived importance of corporate ethics and social responsibility, and Machiavellianism, a general measure of the propensity for manipulative and deceitful behaviour, on tax professionals' willingness to participate in aggressive tax avoidance schemes of corporate clients.

Design/methodology/approach - The paper is based on a survey of tax professionals in Hong Kong.

Findings - The paper finds that Machiavellianism affects tax advisors' expressed viewpoints toward the importance of corporate ethics and social responsibility, which affect professional judgements toward aggressive tax minimisation. As anticipated, high Machiavellians are more likely to endorse the traditional "stockholder view" of corporate responsibility (which holds that corporations have little responsibility beyond maximising their profits), and less likely to support the "stakeholder view" (which recognises corporate responsibilities to a broader range of potential stakeholders). The stockholder view (but not the stakeholder view) of corporate responsibility mediates the relationship between Machiavellianism and ethical/social responsibility judgements. Machiavellianism also had significant direct effects on ethical and social responsibility judgements.

Originality/value - The paper provides insights into the decision processes used to justify aggressive tax minimisation strategies. The findings indicate that commonly articulated views toward corporate ethics and social responsibility may be used to support unethical strategies. In particular, the finding that the stockholder view mediates the relationship between Machiavellianism and ethical/social responsibility judgements suggests that the stockholder view may be adopted to rationalise overly aggressive tax avoidance.

DOI

10.1108/09513570810872978

Print ISSN

13680668

E-ISSN

17584205

Publisher Statement

Copyright © Emerald Group Publishing Limited

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Full-text Version

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Recommended Citation

Shafer, W. E., & Simmons, R. S. (2008). Social responsibility, machiavellianism and tax avoidance: A study of Hong Kong tax professionals. Accounting, Auditing & Accountability Journal, 21(5), 695-720. doi: 10.1108/09513570810872978