Second, this study extends prior research by examining the relevance of individual auditor certification.
Results reveal that tax certification of individual auditors dominates over and contrasts to the effect of providing tax services designed to exclusively confirm tax arrangements that the client or the client's tax preparer has already made when individual auditors are no tax consultants.
The regression equation represents the effect of tax certification at the individual auditor level.
We have seen first hand how easy it is for producers to pull the wool over the eyes of the auditors of certification bodies, who show up infrequently at farms, pre-announced, spend little time there, talk to very few workers and when they do, talk to them at the farm's headquarters.
Auditors' tax certification may, on the one hand, enable them to reduce their clients' tax burden by making them aware of advantageous features of the tax code allowed in conjunction with their financial reporting expertise (Maydew and Shackelford 2007).
Given by assumption that auditors with tax certification may be more familiar with the tax code than auditors that are no tax consultants, tax certified individual auditors may be, in this context, better able to judge the risk of aggressive reporting being detected by tax authorities.
These correlations seem to indicate that tax certifications of individual auditors do not coincide with audit expertise on audit office or audit firm level.
"There needs to be training, certification and auditing of the auditors," he said.
"The truth is that somebody's got to pay for certification," just as companies pay auditors to certify their books, he said.
First, it is possible that the measure of tax certification captures unobservable differences of auditors' psychological cognitive base and values and unobservable selection choices by clients which cannot be fully controlled for by entropy balancing.
