On 31 January 2013, Margaret Hodge, chairman of the UK House of Commons public accounts
committee, told specialists from PwC, Deloitte, Ernst & Young and KPMG that their skills ought to
be directed to nobler ends than minimising tax bills for big business. She said, “What really
depresses me is you could contribute so much to society and the public good and you all choose to
focus on working in an area which reduces the available resources for us to build schools, hospitals,
infrastructure,” she said.
Critically evaluate the above statement and explain whether the sale of tax avoidance services
enhances or devalues the accountants’ claims of professionalism.
Accounting is a service activity which plays a fundamental role in society, as not only does it
provide the public with useful information regarding business entities, it also contributes to the
public good, by operationalizing national tax systems. (Kothari, J. and Barone, E., 2006) According
to Kothari and Barone (2006), accounting may have originated in 3600 B.C., when mankind started
engaging in increasingly complex commerce which required merchants to keep track of their
financial transactions and inventory. With the advent of globalisation, which has increased
countries’ interconnectedness and vulnerability to both domestic and international crises,
supranational and local accounting authorities have had to start co-operating more closely with
national governments in order to set stricter standards aimed at preventing accountants from
engaging in unethical practices and illicit activities.
Even though recent studies (Maher, M. W. et al., 2011) have revealed that both managerial and
financing accounting are subject to a wide range of ethical issues, Fitch (2007) pointed out that
taxation is probably the most complicated area of accounting, mainly due to its dynamic nature and
ethical implications, as numerous accountants tend to use their deep knowledge of tax regulation to