If the juicy tax scandals of major multinationals have taught us anything, it’s that ethics should play a significant role in how we teach taxation accounting. The big corporate players are scrutinised by the public as to whether they pay their fair amount of tax. While legally they may be within their rights, the ethical and moral dilemmas are rife.
This is the world our graduates will enter. They need to know how to navigate this grey space.
With a fundamental understanding of what is right and wrong, and developing a confidence in applying the law, students can enter their careers with integrity. Academics have the opportunity to play a big part in inspiring this.
Associate Professor Ken Devos, Director of the Master of Professional Accounting at Swinburne University of Technology, explains how academics can help students navigate ethics and tax law.
Tax evasion or tax planning?
Teaching the concept of integrity goes hand in hand with teaching regulatory requirements of tax law. Assoc. Prof. Devos explains, “We have tax evasion at one extreme, which is clearly illegal. Then we have tax planning at the other extreme, which is legal – and within the spirit of the law. There is a grey area between evasion and planning, where tax practitioners may chase tax minimisation opportunities for their clients.”
From a tax practitioner’s point of view, they are employed by a client or a corporation to get the best tax result legally and realise maximum benefit for the client. But when that line of unethical tax avoidance feels like it is being crossed, alarm bells should ring.
“Where there are tax laws, there are boundaries, but there are also a lot of areas for manipulation. Therefore, ethics must ‘kick in’ to be able to take the right path. If students are starting with a strong ethical base, they’re more likely to make the correct decision” says Devos.
How to incorporate ethics for taxation and accounting studies
In a tightly packed curriculum, ethics was previously tucked away in the back of the course – a small topic that needed to be addressed for CPA requirements.
This philosophy has now changed. Academics now want to implement ethics throughout a course, and therefore need it highlighted throughout the relevant textbooks. Wiley’s upcoming edition of Bevacqua’s Australian Taxation intends to do just this.
Associate Professor Devos, who teaches Taxation Law, has joined the Wiley author team to ensure ethics is consistently incorporated into the publications, and offers five ways we can help students navigate the grey.
Tip 1: Incorporate real-world learning with scenarios
- According to Assoc. Prof. Devos, the opportunity to provide students with real-life examples and situations is gold. “Ask your students, what course of action would you take in this case? What advice would you give to the client or the corporate board? Students are challenged to think about the correct ethical avenue to take.”
Tip 2: Use online polling tools for eLearning
- A useful technique in online delivery is to use a poll or survey – utilising in-built tools on your online platform. Students can consider the dilemma on the spot, and the anonymous poll gives both the instructor and the students an idea of what most people may think is ethically appropriate. This is a great springboard for the instructor to understand where students may be lacking ethical decision-making skills.
Tip 3: Utilise the Ethics Think boxes in textbooks
- The upcoming edition of Australian Taxation has Ethics Think features boxes inserted throughout relevant chapters. This shows students that ethical dilemmas could present themselves in various ways throughout the various aspects of tax law and taxation practice. The snapshot scenarios give students the opportunity to consider their ethical response as they work through the textbook.
Tip 4: Work-Integrated Learning
- Devos recommends helping students access opportunities to work in a Tax Clinic, such as those sponsored by the ATO, to work on tax returns for real life taxpayers. The experience of interacting with taxpayers incorporates human-centric learning and promotes ethical practice. Students will have opportunities to think about ethical issues that may arise in ordinary real-life tax claims.
Tip 5: Aligning values
- Producing career-ready graduates also means helping students choose careers paths with integrity. Students will need to consciously check the alignment of their values with that of their new or potential employer. Instructors should reinforce the fact that if students think there will be a value mismatch, they really should opt not to work for them. While new graduates are itching to secure a job, if they establish a value-aligned relationship with an employer from Day One, they are more likely to be able to practice taxation accountancy with integrity.
“Producing career-ready graduates also means helping students choose careers paths with integrity.”
Big fish and small folk
Not all our students will work in the corporate space, where public scrutiny often exposes tax avoidance. It can also be small business clients and individuals who may be headstrong about making a tax claim that they believe should be deductible.
If the tax practitioner concludes that it is not allowable according to the law, then they must act ethically in accordance with the code of conduct. If they cannot convince the client to take the ethical course of action, then they may lose the client, or may choose an unethical path. This may be difficult for a new graduate to reconcile at first.
Whether it is on a small scale, or a large scale, students need to apply the foundational concepts equally, without being swayed by influential corporations nor by pushy clients.
Career-ready graduates
Taxation and accounting students in essence need to merge two key skill sets: a comprehensive understanding of the laws that inform tax and accounting decisions, and an ethical view on what is acceptable and moral.
Law and ethics go hand in hand. With ethics clearly becoming a key graduate attribute, career-ready taxation students will gain significantly from learning ethics, as will the greater community that they serve.
About Ken Devos:
Ken Devos (BB) (Grad Dip Tax ) (MTax) PhD CPA, is an author on the second edition of Bevacqua’s Australian Taxation. He is also an Associate Professor in the Faculty of Business and Law at Swinburne University (Hawthorn Campus). Ken lectures in both graduate and undergraduate accounting and taxation courses and has published in both national and international tax journals and presented a number of conference papers on taxation issues. Currently, he is part of a research team investigating the ethical views of Australian tax practitioners.
More Information
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