Moral Development and Ethical Decision Making in Tax Compliance: Evidence from Accountants in Malaysia
The objective of this study is to identify and empirically investigate some factors that may influence ethical decision-making by accountants in a tax compliance conflict situation. This study attempts to determine whether moral development influences tax compliance decision-making and behaviour...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English English |
| Published: |
1999
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| Online Access: | http://psasir.upm.edu.my/id/eprint/8250/1/FEP_1999_10_A.pdf http://psasir.upm.edu.my/id/eprint/8250/ |
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| Summary: | The objective of this study is to identify and empirically investigate
some factors that may influence ethical decision-making by accountants in a
tax compliance conflict situation. This study attempts to determine whether
moral development influences tax compliance decision-making and
behaviour in the context of Kohlbergs' cognitive moral development theory.
It also specifically considers the individual and joint effects of a number of
variables such as moral development, individual differences (type of firm and
legitimacy) and size of tax deduction (contextual variable).
An empirical model was developed from a review of the literature on
ethical decision-making in business and marketing. The model considers
the individual and joint influences of the variables stated above.
Accountants' ethical decision-making was operationalised in terms of the
response to three tax compliance conflict situations. Eleven null hypotheses
were developed for testing. A representative sample of one hundred and
eighty accountants from Certified Public Accounting (CPA) firms were selected as subjects for the mail survey. The data was analysed using
multiple regression as well as probit and logit estimation techniques.
Of the eleven null hypotheses, one was rejected whereas there were
mixed results for five others. The results for these five hypotheses were
significant (at the 1% level) in two out of the three conflict situations. The
contextual variable was a significant explanatory variable. Moral
development was only significant when it interacted with either the
contextual variable, the type of firm or legitimacy in different conflict
situations. Although moral development was not a significant explanatory
variable, it did perform well as an interaction variable. As such, the results
lend support to the interactionist model used in the study. The type of firm
variable performed well with regard to one of the conflict situations, thus
indicating that there are differences in the way respondents from different
firms make decisions. As for socio-economic variables, the most significant
variable was membership of a professional body.
The overall conclusion that emerges from this study is that moral
development is important as an interaction variable when it interacts with
other variables such as context, type of firm or legitimacy. Various
recommendations are made following the findings of the study. These
involve educational interventions, ethics intervention, the role of professional
bodies and improving legitimacy. Future research is also suggested in
respect of further testing of the model used in the study. |
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