Lisa Marriott

Ethics and experiments in accounting

Purpose – This research aims to measure compliance in a tax experiment among students. The aim of the study is to investigate relationships between claimed behaviour in a questionnaire and actual behaviour in an experimental environment, together with different behaviours between males and females, and different age cohorts.Design/methodology/approach – A total of 630 undergraduate Commerce students at a New Zealand university completed a questionnaire on attitudes towards the tax system. The students subsequently participated in a simulation experiment requiring responses to hypothetical tax evasion decisions. Individual reward payments were contingent on the outcome of these tax evasion decisions. Questionnaire responses, which captured intended behaviour, were compared with actual behaviour in the experiment.Findings – The study finds more compliant behaviour among older students and students who have been at university longer. It also finds female students demonstrate more ethical responses in their b...

Using student subjects in experimental research: a challenge to the practice of using students as a proxy for taxpayers

The tax discipline has accepted the practice adopted in the economics and psychology disciplines of using student subjects for experimental research purposes. However, in other social science disciplines (e.g. accounting, management or consumer research), experimental research that uses students as a substitute for another group has been widely criticised as having little external validity. In this research, data are compiled from journal articles over a 20 year period to investigate the extent to which tax experiments use student subjects and the potential implications from this practice. Three research questions are addressed. First, do tax studies using student subjects justify or explain the use of student subjects? Second, are policy recommendations or other extrapolations to the tax-paying population made from the student subject results? Third, is any acknowledgement made of the potential limitations of using student subjects? The findings indicate that approximately half of the tax experiments investigated used student subjects. Of these, approximately 80% provided no justification for their chosen subject sample. A similar proportion did not acknowledge any limitations from the use of a student sample. Around half of the papers using student subjects extrapolated their findings to the general tax-paying population or provided tax policy recommendations. In addition, the research indicates that the tax discipline has not had the same level of robust debate on the use of student subjects in experimental research as that seen in other disciplines. This potentially limits the external validity and utility of many of the tax research experiments undertaken to date.

Innovation in Retirement Savings Policy: The New Zealand Experience

Abstract New Zealand has adopted a unique approach among OECD countries to the policy issue of retirement savings. New Zealand has no compulsion for retirement savings and, for the 20 years prior to 2007, has also had no tax incentives for retirement savings. In 2007, the KiwiSaver scheme was implemented: a unique compulsory “opt-in”, voluntary “opt-out” scheme, with financial incentives for participation. The reduction of the incentive to 2 per cent of salary, with a change of government in November 2008, has demonstrated that the innovative scheme is vulnerable to political manipulation.

Accounting for cultural well‐being: an exploratory study of New Zealand regions

Purpose – The purpose of this research is to explore the economic and social arguments used in support of government assistance for cultural well‐being, and the accounting measures used to capture cultural well‐being at a regional level in New Zealand.Design/methodology/approach – Accounting information reported in city council annual reports is used to examine expenditure on cultural well‐being. The research investigates possible relationships between regional economic growth and regional expenditure on arts, culture and heritage. It also investigates justifications for expenditure on activities classified under the category of arts, culture and heritage in the annual reports produced by New Zealand city councils.Findings – In most regions, funding for cultural activities has increased over the past ten years. The findings of this research indicate there is no significant relationship between funding on cultural activities and regional economic growth. Instead, the research highlights the emphasis placed...

The Politics of Superannuation in Australasia: Saving the New Zealand Standard of Living

Support for retired individuals is one of the key policy issues facing governments throughout the OECD. The need for a long-term approach to the issue of retirement saving is well established. New Zealand and Australia have adopted different approaches to retirement saving. Two primary differences exist in retirement saving policy – New Zealand offers little in the way of incentives and there is no compulsion; conversely, Australia provides highly concessionary tax incentives and a mandatory occupational retirement savings scheme exists. This paper offers suggestions on how and why two countries that typically approach policy issues from a similar direction have adopted such different attitudes to the topic of retirement saving.

The Construction of Crime: The Presumption of Blue-Collar Guilt and White-Collar Innocence

This study examines a recent legislative change in New Zealand social policy that provides for the partners of people engaging in welfare fraud to be prosecuted for the crime and to be jointly liable for the debt generated from the crime. This situation applies where the partner knew, or ought to have known, of the fraud. This approach may be contrasted with the treatment of the partners of those who engage in tax evasion, or other forms of financial crime, who are not liable for prosecution or any debt resulting from the offence. Discrimination of those on welfare is well-established. The article highlights the extent to which welfare beneficiaries are now targeted for greater punitive measures in New Zealand and the increasing criminalisation of welfare in the country. The practices outlined appear to contravene the New Zealand Human Rights Act. Moreover, these practices are not aligned with the basic provisions of criminal law: that a guilty mind and a positive act are present for a crime to be committed. The study draws attention to issues of equity, knowledge of crime, and the construction of crime and criminals in the New Zealand justice system.

An investigation of attitudes towards tax evasion and welfare fraud in New Zealand

This study undertakes an empirical exploration of attitudes towards tax evasion and welfare fraud in New Zealand. Prior research indicates that society has different attitudes towards these two crimes. However, it is not known why this is the case, particularly as both crimes are conceptually similar. The study has two aims. The first is to measure the extent to which society views tax evasion and welfare fraud differently in New Zealand. The second, and primary, objective of this research is to offer an explanation for why different views exist. The dual-process model, using social dominance orientation and right-wing authoritarianism is used for analytical purposes. Responses from 1500 survey participants show that New Zealanders do have different attitudes towards welfare fraud and tax evasion. In contrast to previous research findings, this study shows that harsher attitudes are held towards tax evasion than welfare fraud. Education and income level provide the greatest level of significance in explaining attitudes towards welfare fraud; and age and income source provide the greatest level of significance in explaining attitudes towards tax evasion.

Tax evasion and welfare fraud: do punishments fit the crime or the perception of the crime?

Purpose Individuals with fewer resources often receive more punitive treatment in the justice system than those who are more privileged. This situation is frequently justified with reference to societal preferences. To test the accuracy of this justification, the purpose of this study is to report on the extent to which the different treatments of tax evaders and welfare fraudsters in the Australian and New Zealand justice systems reflect the views of these societies. Design/methodology/approach Attitudes are captured in a survey with 3,000 respondents in Australia and New Zealand. Findings When asked directly, the majority of respondents (58 per cent) perceive no difference in people committing welfare fraud or tax evasion. However, responses to presented scenarios on tax evasion and welfare fraud show different tolerances for each crime. When provided with scenarios including crimes and criminals, results show that survey respondents see tax evasion as a less serious crime. However, when asked about their own propensity to commit the same offence, respondents indicate that they are more likely to engage in welfare fraud than tax evasion. The authors also report on factors that have an impact on individual’s attitudes towards tax evasion and welfare fraud. Social implications The survey results do not clearly show more punitive attitudes towards tax evasion or welfare fraud. Thus, the authors do not find support for the suggestion that the harsher treatment of welfare fraud can be justified with reference to society’s views. Originality/value The study reports on original survey research.