Implicit Attitudes and U.S. Tax Professionals' Reliance on Offshore Tax Professionals' Recommendations

What is it about?

Large accounting firms offshore a significant amount of tax work to professionals in India. To the extent U.S. tax professionals have negative implicit attitudes towards Indian persons which affect their judgments or actions, they may under-rely on work performed by Indian tax professionals, creating work inefficiencies. We measure U.S. tax professionals' implicit attitudes toward Indian persons using an implicit association test (IAT). We then assess whether U.S. tax professionals respond differently to work produced by Indian versus U.S. tax professionals and whether implicit attitudes affect U.S. professionals' assessments of Indian tax professionals' work product. We find that U.S. tax professionals have moderate to strong negative implicit attitudes toward Indian persons relative to U.S. persons. However, we find no evidence that U.S. tax professionals respond differently to work produced by Indian versus U.S. tax professionals or that negative implicit attitudes influence U.S. tax professionals' assessment of Indian tax professionals' work product.

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