Discussion of Expertise in Corporate Tax Planning: The Issue Identification Phase

Abstract

Bonner, Davis, and Jackson investigate the relation between tax professionals' performance on an issue identification task and their knowledge and ability. They hypothesize that performance quantity (the number of issues identified) is positively related to corporate tax knowledge, corporate transaction knowledge, and general problem-solving ability. They also hypothesize a positive relation between performance quality (the difficulty of the issues identified) and the interaction of tax knowledge, transaction knowledge, and ability. The results indicate no relation between performance quantity and transaction knowledge or problem-solving ability. The relation between performance quantity and tax knowledge varied with the method used to measure tax knowledge. With respect to performance quality, the results suggest an interaction among transaction knowledge, tax knowledge, and problem-solving ability. More specifically, ability enhances performance quality only when tax and transaction knowledge are low, tax knowledge enhances performance quality only when ability and transaction knowledge are high, and transaction knowledge has no effect at any level of ability and tax knowledge. An exploratory analysis also was performed of the relation between the subjects' instructional and practical experiences and their knowledge of corporate transactions and tax laws. The two knowledge measures were regressed on 6 variables extracted from a factor analysis of 11 practice