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This paper investigates the ethical environment in which tax professionals operate by eliciting practicing tax professionals' personal experiences with ethical dilemmas in tax engagements. Since organizational culture can play a role in creating an environment where ethical decision making is encouraged (Arnold et al. 1999, 2000; Booth and Schulz 2004), we expected that tax professionals' self-identified ethical dilemmas would be related to their assessments of the ethical environments of their firms. Based on 146 responses from practicing tax professionals, most participants rated their ethical environment as very strong. Additionally, the 84 participants who did not describe a self-identified ethical dilemma rated the ethical environment of their firms significantly stronger than the 62 who reported a dilemma. Implications of this study include an emphasis on in-house ethics training and explicitly including rewards and sanctions regarding ethical behavior in performance evaluation systems.
Bobek et al. (Sat,) studied this question.