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Prior research addresses relationships between audit attributes and perceptions of both audit quality and auditee satisfaction in the private sector. This study extends such research to local government audits, where audit quality has been questioned. Additionally, this study investigates the effect of auditor size on perceived audit quality and satisfaction. 302 finance directors surveyed positively associated auditor expertise, responsiveness to client, professionalism, understanding of client systems, and study of internal controls with perceived audit quality. Furthermore, auditee satisfaction was positively related to auditor expertise, responsiveness to client, audit manager involvement, understanding of client systems and study of internal controls. Big 5 firms were not associated with higher levels of perceived audit quality or auditee satisfaction, despite charging significantly higher audit fees.

The competence of tax accountants plays a crucial role in the U.S. voluntary compliance income tax system. This study extends prior research in accountant expertise to tax accountants. Two dimensions of expertise are measured: accuracy of recall of declarative tax knowledge, and calibration of confidence in the accuracy of recall. It is found that, like auditors, tax accountants exhibit overconfidence in their ability to recall knowledge in their domain. Because expertise is not directly observable, we seek to link our measures to observable surrogates, including: rank in firm, experience, education, and specialization. Hypothesized relationships are generally supported, although there is no detectable relationship between our measures and post-baccalaureate education. There is a positive relationship between the dimensions of expertise we measure and length of experience in practice; however, at high levels of experience the relationship becomes negative.

Behavioral tax research investigates the behavior of tax practitioners and taxpayers, mostly in a judgment/decision-making (JDM) context. We review and evaluate behavioral tax research since 1993, and provide suggestions for the direction of future research.

Tax practitioner JDM research has had two main foci: reporting positions, and information search and knowledge. Both have been fruitful, and should continue to be so. We place particular emphasis on improving studies of reporting position, especially in the areas of measurement, and internal and external validity.

Research on taxpayer behavior has been more diffuse, perhaps overly so. The JDM research may be dichotomized between that using compensated subjects (economics-based) and that using uncompensated subjects (chiefly psychology-based). These form distinct bodies of research that often appear incompatible because of differing methods and theoretical underpinnings. In addition to the JDM literature, there is a large body of research on taxpayer attitudes. This group of papers is highly heterogeneous, differing widely in theoretical development and relevance.

We recommend, in conclusion, that future behavioral research in taxation be better grounded in social science theory, and that more attention be paid to the representativeness of subjects.