Leiden University Student Repository

Christmann, Tim (2024)

Ambiguity? In this Economy? Testing the Effects of Information about Audit Probability on Compliance

Research master thesis | Psychology (research) (MSc)

We tested the effects of audit probability (high, low, ambiguous) and audit probability change (increase, decrease) on compliance in a simplified tax return task. Participants were asked to report correct returns, faced with either a high (40%), low (10%) or ambiguous (10-40%) audit probability. In addition, audit probabilities of each participant were either increased or decreased by five percentage points after half of all trials were completed. Results showed that, in line with our predictions, high audit probability yielded significantly higher compliance than low audit probability and that high and ambiguous audit probability yielded similar compliance. Contrary to our expectations, audit probability change in the form of increases or decreases did not yield significant effects on compliance. The present study indicates that an ambiguous audit probability can yield increased compliance akin to a high audit probability. Our findings provide a starting point for further...Show moreWe tested the effects of audit probability (high, low, ambiguous) and audit probability change (increase, decrease) on compliance in a simplified tax return task. Participants were asked to report correct returns, faced with either a high (40%), low (10%) or ambiguous (10-40%) audit probability. In addition, audit probabilities of each participant were either increased or decreased by five percentage points after half of all trials were completed. Results showed that, in line with our predictions, high audit probability yielded significantly higher compliance than low audit probability and that high and ambiguous audit probability yielded similar compliance. Contrary to our expectations, audit probability change in the form of increases or decreases did not yield significant effects on compliance. The present study indicates that an ambiguous audit probability can yield increased compliance akin to a high audit probability. Our findings provide a starting point for further investigation into the effects of information about audit probability on tax compliance. Suggestions for replication studies and further research are provided.Show less

Uncertainty avoidance, Tax compliance, Audit probability, Ambiguity

Author

Christmann, Tim

Faculty

Faculty of Social & Behavioural Sciences

Specialisation

Social & Economic Psychology

Supervisors

Dijk, W. van

ECTS Credits

20

Language

en