Foreign literature

Underlying all of the specific rules, laws, and regulations governing a CPA’s provision of

tax services is a basic code of conduct that defines what it means to act as a professional. A

professional firm can look to a number of sources for key principles of ethical conduct to

emphasize in its practice. A good place to start is the AICPA Code of Professional Conduct

(AICPA Code). The AICPA principles guide members in performing their professional

responsibilities and express the basic tenets of ethical and professional conduct. The AICPA

principles call for an unswerving commitment to honorable behavior, even at the sacrifice of

personal advantage. In particular, the AICPA principles require members to act with integrity,

objectivity, due professional care, and a genuine interest in serving the public. (Fuller & Hyde,

2013)

Every company ought to have a clear and transparent statement regarding their position

on payment of tax. For companies that claim to operate according to a set of ethical values and

commitments, it is these values that would be expected to underpin such a statement. As part of

good governance, companies will seek to minimize their tax liability through “tax planning”,

making the most of the tools and mechanisms which the government makes available to them

specifically for this purpose: allowances, deductions, rebates, exemptions, etc. They will make

choices about how to pursue their business goals in the light of all the implications – which

include the tax consequences. (Tax Avoidance as an Ethical Issue for Business, 2011)

According to Journal of the International Academy for Case Studies (2011), CPA tax

practitioners operate in a highly competitive environment. When employed in aggressive firms,

they face strong incentives to maximize professional revenue. They may confront immense
pressure to retain old clients and recruit new ones. At times, these clients may demand that their

CPAs utilize aggressive tax positions to minimize tax liabilities. But there are technical and

ethical limits on the tax positions a CPA can take.

As cited on the article Threats and Challenges to Accounting Profession: A Draw Back to

the Development of Accounting Practices in Nigeria (2015), the accounting profession has been

the subject of severe criticism in recent times following the extensive corporate collapse such as

Enron in the United States of America, and the financial statement fraud involving Cadbury Plc.

in Nigeria.

Due to management’s desire to reduce their tax liability, the accountants are being

influenced by the management. Hence, the accountants fail to comply with the Code of Ethics.

Part of the ethical concerns that the accountants are facing is tax avoidance. Based on the article

posted on The Guardian, tax avoidance, while legitimate, can be seen as aggressive when it

involves using financial instruments and arrangements not intended as, or anticipated by,

governments as a vehicle for tax advantage.

Bibliography
Tax Avoidance as an Ethical Issue for Business. (2011). Institute of Business Ethics, 1,3.

Back, P. (2013, April 23). Retrieved November 30, 2016, from The Guardian:
https://www.theguardian.com/sustainable-business/avoiding-tax-legal-but-ever-ethical

Dauda, I., Ombugadu, B., & Aku, S. (2015, October). Retrieved November 30, 2016, from HR Mars:
http://hrmars.com/hrmars_papers/Article_12_Threats_and_Challenges_to_Accounting_Profess
ion.pdf

Fuller, D. D., & Hyde, N. K. (2013, February 1). Retrieved November 30, 2016, from The Tax Adviser:
http://www.thetaxadviser.com/issues/2013/feb/tpr-feb2013.html

Powell, R., & Bolt-Lee, C. E. (2011, November). Retrieved November 30, 2016, from Questia:
https://www.questia.com/read/1G1-327357499/ethical-issues-in-professional-tax-practice