IMPACT OF CRITICAL THINKING ABILITY ON TAX PRACTITIONER JUDGMENT

This research was motivated by the quest to further understand the decision making process of experienced tax practitioners. This study addressed three research questions. First, do more experienced tax practitioners possess higher levels of critical thinking ability than less experienced tax practitioners? Second, is the critical thinking ability of tax practitioners associated with judgment quality? Third, auditor judgment studies have documented experience-related judgmental differences with respect to task structure. Experienced auditors have outperformed inexperienced auditors on ill-structured audit judgment tasks, but when the audit task is well-structured there is no significant difference in performance. Are these experience-related judgmental differences also found among tax practitioners?.; The research questions were addressed using an established measure of critical thinking ability from the psychology literature--the Watson-Glaser Critical Thinking Appraisal. Additional explanatory variables were drawn from prior studies that have probed the relationship of experience to performance on well-structured (relatively certain outcome) and ill-structured (uncertain outcome) judgment tasks. Participants were asked to respond to both ill-structured and well-structured corporate tax scenarios adapted from actual U.S. Tax Court decisions.; Sixty-seven tax professionals from Big Six public accounting firms participated in this study. They completed two detailed tax case scenarios and the Watson-Glaser Critical Thinking Appraisal. The data was used to test a linear model of individual judgment quality, which was measured in two ways: (1) based on group consensus; (2) based on the actual Tax Court decisions. The data were analyzed using t tests of mean differences and linear regression analysis.; The results of this study indicate that critical thinking ability is a construct that is not associated with experience in tax practice. However, the study found empirical evidence of a relationship between critical thinking ability and judgment quality. After controlling for experience, critical thinking ability was significant in the individual judgment quality model. Finally, the results provided limited support for the notion of experience-related judgmental differences with respect to task structure.