George F. Klersey’s research while affiliated with Piedmont College and other places

This research examines how differences in experience among tax accountants with three distinct levels of general practice experience - seniors, managers, and firm-wide partner/senior manager-experts - affect performance on two decision making tasks: (1) configural processing of information cues, i.e., cue usage of variations in relevant client facts, and (2) judgments of the likelihood of nontaxability for a client transaction. Two hundred forty-eight (248) tax professionals from a single international accounting firm evaluated 16 fact patterns. The results indicate (1) experience interacts significantly with configural processing - a significantly larger percentage of variation in judgments of taxability is explained by systematic variations in client facts for more experienced tax professionals, (2) tax managers, but not tax seniors, are able to both process variations in client facts and make taxability judgments similar to tax experts in a closed cue setting, and (3) tax seniors are less likely than managers or partners to recognize increased risks of taxable treatment. We discuss implications for future research, tax education, and practice.

This research examines whether (1) less experienced tax accountants exhibit a pro-client bias (a tendency to conclude a client-favorable [unfavorable] outcome is more [less] likely as compared to more experienced tax accountants’ judgments), (2) whether task-specific declarative information (a summary of relevant IRC and Congressional intent) can reduce this bias, and (3) whether tax seniors and managers can make judgments similar to partner experts in a closed-cue judgment situation as suggested by prior research in medical decision making. The results show tax seniors judge taxability significantly less likely when the facts are against the client or neutral than both tax managers and partners. This pro-client bias is significantly reduced when the seniors are provided with relevant declarative information. In contrast, tax managers are able to make taxability judgments similar to the partner experts across all three risk conditions. I discuss implications for training, practice management, and future research.

Recent research has focused on audit firms' client portfolio management choices, assuming firms are motivated to reduce overall business risk consistent with Expected Utility Theory. However, Prospect Theory predicts individuals make risk seeking choices when faced with potential losses, perhaps including losing the revenue from terminating an existing client. This study examines the effect of individual audit Partners' risk preferences in the context of whether to retain or terminate a risky audit client. The results indicate individual Partners' risk attitudes have a significant effect on their decisions whether or not to retain a risky audit client. Implications for audit practice and future research are discussed.