Ethical tax decision-making: Evaluating the effects of organizational prestige valuations and tax accountants’ financial situation

Abstract

This study investigates interactive influence of two dimensions of perceived organizational prestige (POP) on ethical decision-making (EDM). The study also examines moderating effect of the decision-maker’s financial situation on the POP-EDM relationship. A Survey data from 356 tax accountants in two public interest organizations were analysed using partial least square structural equation modelling. The study found that perceived external prestige (PEP) dimension of POP predicts EDM. Self-perceived prestige (SPP) dimension of prestige does not directly predict EDM but is a significant antecedent of PEP. Furthermore, decision-maker’s financial situation does not moderate PEP-EDM relationship. The paper holds implications for image-building policies for public-interest organizations. Towards improving EDM, the paper recommends for organizations to focus on PEP-enhancing programs. This paper is foremost in establishing POP-EDM relationship. Further, the paper contributes to social identity theory by examining the EDM effect of both social identity motivations and potential ethical pressures on tax practitioners.