HCBE Faculty Articles

Document Type

Article

Publication Date

7-1-2023

Publication Title

Journal of Forensic and Investigative Accounting

ISSN or ISBN

2165-3755

Volume

15

Issue/Number

2

Abstract/Excerpt

The AICPA’s Code of Professional Conduct (the “Code”) requires that if a member intends to use the services of a third party service provider (TPSP), the client should be informed. However, the wording in the Code is not mandatory via the use of must. In addition, there is no differentiation between disclosures of outsourcing tax return preparation versus offshoring tax return preparation. This could be considered a significant area of concern because there are ethical considerations with disclosure, or lack thereof, and the economic considerations involved in offshoring of returns that are distinctly different from outsourcing returns within the U.S. This study presents direct evidence using experiments about how individual taxpayers might react to disclosures made by tax-preparers regarding their outsourcing or offshoring relationships with TPSPs. The findings confirm that taxpayers are not indifferent between outsourcing and offshoring of their returns. In addition, taxpayers would prefer clear disclosure of TSPS usage, including information about the TSPS’s location. Finally, results suggest the AICPA should require members to obtain clients’ specific consent (an opt-in option) to outsource tax return preparation to TSPSs.

Comments

Acknowledgements

We express gratitude and special thanks to Dr. Robin Roberts and Dr. John Sweeney for their valuable insight and helpful suggestions.

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