Ayres, F. L. & Hethcox, K. B. (1994). Accuracy
differences as a function of preparer status: An analysis of money’s tax test. Financial
Counseling and Planning, 5, 117-126.
Accuracy Differences as a Function of Preparer Status:
An Analysis of Money’s Tax Test
Frances L. Ayres (1) and Kathleen Blackburn
To reduce the cost of compliance,
it is important that individuals seeking tax preparation assistance, as well as
policymakers, be aware of any performance differences between preparers. In
this paper the results of Money’s tax test are employed to determine whether
the accuracy and bias of preparers are a function of preparers’ professional
status. Each year from 1988-1993 Money conducted a test of volunteer tax
preparers from throughout the United States in which they compute taxes due for
a hypothetical family. Participants included CPA and non-CPA preparers. The
results show that relative to non-CPA preparers, CPAs tend to err in favor of
the taxpayer, although overall both groups favored the government. After
comparing the cost and the variance in the taxes due, the findings suggest that
CPAs are the more cost efficient and less risky preparer group.
Key Words: tax compliance, tax liability, tax preparer(s)
1. Frances L. Ayres, University of Oklahoma, 307 West Brooks, Rm. 200, Norman,
OK 73019. Phone: (405) 325-4221 Fax: (405) 325-7348. E-mail: firstname.lastname@example.org.
2. Kathleen Blackburn Hethcox,