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Social responsibility, Machiavellianism and tax avoidance A study of Hong Kong tax professionals

Social responsibility, Machiavellianism and tax avoidance A study of Hong Kong tax professionals 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting, Auditing & Accountability Journal Emerald Publishing

Social responsibility, Machiavellianism and tax avoidance A study of Hong Kong tax professionals

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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09513570810872978
Publisher site
See Article on Publisher Site

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.

Journal

Accounting, Auditing & Accountability JournalEmerald Publishing

Published: Jun 20, 2008

Keywords: Political theory; Corporate social responsibility; Business ethics; Tax planning; Hong Kong

References