The effects of tax aggressiveness and complexity on investors' preferences for joint provision of tax and audit services

Joint provision of tax and audit services has been under regulatory scrutiny for over a decade. I use a source credibility framework to map the costs and benefits of joint provision to the components of source credibility, competence and trustworthiness, to explain the effect of aggressiveness and complexity on investors’ preferences and subsequent investment decisions. Experimental results indicate that investors prefer tax preparation to be provided by an accounting firm not engaged as the auditor rather than by an accounting firm jointly providing tax and audit services. Results also indicate that although aggressiveness does not affect this preference, complexity increases investors’ preference for non-joint provision. Additional results indicate that the auditor tax preparer is perceived to be less competent and less trustworthy than the non-auditor tax preparer. This study contributes to the accounting literature on joint provision, with implications for both tax providers and managers.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accountancy

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2012

Author dc:creator

• Birkey, Rachel

Contributors dc:contributor

• Smith, Steven
• Jackson, Kevin E.
• Lisowsky, Petro
• White, Tiffany B.

• Tax aggressiveness
• source credibility
• Joint Provision
• Independence

Statement dc:rights

• Copyright 2012 Rachel Birkey

Language dc:language

en

Handle dc:identifier

http://hdl.handle.net/2142/34498

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/34498