Mitigating Advocacy Bias: The Effect of the Reviewer Role on Tax Professional Judgment

Abstract

This study examines the effect of the reviewer role on tax professionals' advocacy bias. Prior research establishes the prevalence of advocacy bias and focuses on whether reviewers can detect preparers' advocacy bias; however, this study examines whether the reviewer role influences tax professionals' judgment and decision-making processes. In an experiment randomly assigning 75 tax professionals to the reviewer and preparer roles, I find professionals who occupy the reviewer role report similar advocacy attitudes to preparers but are significantly less likely to exhibit advocacy bias than preparers. Reviewers also employ a more consistent decision process than those in a preparer role. Results highlight the reviewer role as a moderator of advocacy bias, demonstrating the importance of the reviewer role for firms and clients. Understanding the effects of review responsibilities on professionals at all levels is increasingly important as firms leverage emerging technology to complete tasks traditionally assigned to less experienced professionals.