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

William E. Shafer (Lingnan University, Tuen Mun, Hong Kong, People's Republic of China)
Richard S. Simmons (Lingnan University, Tuen Mun, Hong Kong, People's Republic of China Taxation Law and Policy Research Institute, Monash University, Melbourne, Australia)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 20 June 2008

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.

Keywords

Citation

Shafer, W.E. and Simmons, R.S. (2008), "Social responsibility, Machiavellianism and tax avoidance: A study of Hong Kong tax professionals", Accounting, Auditing & Accountability Journal, Vol. 21 No. 5, pp. 695-720. https://doi.org/10.1108/09513570810872978

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited