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Quality of management schools, strength of auditing and reporting standards and tax evasion

Quality of management schools, strength of auditing and reporting standards and tax evasion The purpose of this paper is to examine the relationship between the quality of management schools and tax evasion and tests whether the strength of auditing and reporting standards moderates such a relationship.Design/methodology/approachTax evasion is measured using the macro-indirect approach based on Schneider, Buehn and Monterngro (2010). The quality of management schools is collected from The Global Competitiveness Report for 2014-2015.FindingsOn the basis of sample of 137 countries, the authors document that the level of tax evasion is negatively associated with the quality of management schools and the strength of auditing and reporting standards. When the authors distinguish between low- and high-strength of auditing and reporting standards countries, the authors find that the negative and significant association remains stable only for high-strength of auditing and reporting standards countries.Practical implicationsThese results imply that the quality of management schools through its output (managers, fiscal controllers, auditors and businessmen) may increase the tendency of individuals in a given country to comply with tax rules and that legal enforcement may affect the ethical behaviours of these actors with regard to tax evasion.Originality/valueThe empirical findings have policy implications for governments with high levels of tax evasion since they highlight the importance of the quality of higher educational system in shaping tax compliance behaviour. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EuroMed Journal of Business Emerald Publishing

Quality of management schools, strength of auditing and reporting standards and tax evasion

EuroMed Journal of Business , Volume 13 (2): 14 – Jul 30, 2018

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1450-2194
DOI
10.1108/emjb-05-2017-0017
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine the relationship between the quality of management schools and tax evasion and tests whether the strength of auditing and reporting standards moderates such a relationship.Design/methodology/approachTax evasion is measured using the macro-indirect approach based on Schneider, Buehn and Monterngro (2010). The quality of management schools is collected from The Global Competitiveness Report for 2014-2015.FindingsOn the basis of sample of 137 countries, the authors document that the level of tax evasion is negatively associated with the quality of management schools and the strength of auditing and reporting standards. When the authors distinguish between low- and high-strength of auditing and reporting standards countries, the authors find that the negative and significant association remains stable only for high-strength of auditing and reporting standards countries.Practical implicationsThese results imply that the quality of management schools through its output (managers, fiscal controllers, auditors and businessmen) may increase the tendency of individuals in a given country to comply with tax rules and that legal enforcement may affect the ethical behaviours of these actors with regard to tax evasion.Originality/valueThe empirical findings have policy implications for governments with high levels of tax evasion since they highlight the importance of the quality of higher educational system in shaping tax compliance behaviour.

Journal

EuroMed Journal of BusinessEmerald Publishing

Published: Jul 30, 2018

Keywords: Tax evasion; Quality of management schools; Strength of auditing and reporting standards

References