Effects of Decision-Aid Use on Evaluations of Tax Preparer Liability

Prior research demonstrates that the use of decision aids by auditors can influence jurors' assessments of liability for audit failure. This study extends such research to tax preparation, investigating how tax practitioners' use of decision aids influences jurors' evaluations of liability. Participants included 226 qualified jurors responding to a hypothetical lawsuit against a tax practitioner for alleged negligence. Results suggest that the use of decision aids, regardless of reliability, influences jurors' assessments of liability for tax return failure, decreasing liability if the aid's recommendation is implemented and increasing liability if the recommendation is overridden. This study also tests the influence of firm size, firm fees, and demographic characteristics on jurors' damage assessments. Consistent with prior research, this study finds that jurors are more likely to assess damages against a large firm. Contrary to prior research, this study finds that neither firm fees nor demographic characteristics are significantly related to jurors' damage assessments.

Autorentext

Dr. Rufus, President of Rufus & Rufus CPAs, has more than 25 years of field experience as a forensic expert and investigative accountant. He has been engaged in several hundred civil and criminal matters during this period, ranging from IRS fraud investigations to business valuations in a variety of industries.