advantage of the many managerial benefits of tax compliance activities Lignier

Advantage of the many managerial benefits of tax

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advantage of the many “managerial benefits” of tax compliance activities (Lignier, 2009b), nor are they interested in accounting information. Their disinterest towards accounting reflects their low uncertainty avoidance and short term time orientation, and they were willing to pay others to assist with their record keeping. They underestimated the long term benefits of having some accounting knowledge for compliance purposes. Using accounting information beyond tax requirements would greatly assist SME
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101 operators with better business decision making and budgetary controls considered important for timely tax payments. To further understand the record keeping function of the various ethnic groups, the next few subsections detail their tax compliance activities and practices. 6.4.1 Accounting systems and the record keeping function - European group Figures 6.1 and 6.2 show more Europeans using the computerised accounting system and having family members assist them with the record keeping function compared to other groups. Given the high number of joint businesses for the European sample, it was critical for the spouses to undertake the record keeping function to lower the compliance cost. This practice is commonly found in SMEs in New Zealand (Firkin, 2001): “In the past, when my husband first started, he did most of the work. I worked with him as well like doing the sanding and painting and doing his accounts for him for a couple of years until quite recently.” (E3) “As for the administration and paperwork for the business, it has always been messy because I am a technical person and I am not an administrative person. Most people in the IT are like that. You need to have someone to be on your side to handle it. My spouse has been good with this and she had brought a lot of order to it. If I do not have my spouse doing it, I would have to hire someone to do it without doubt.” (E8) Being achievement oriented, brought about from their masculinity trait, European operators used their accounting information beyond tax purposes to grow and expand their businesses: “We use the accounting information to grow our business. Tax is part of the business. It is mainly for the business. Tax is to ensure that all the ticks have been done and that we are complying with it.” (E4) 6.4.2 Accounting systems and the record keeping function - Asian group Like the Europeans, more Asians in this sample used the computerised accounting system than the manual system to record their business transactions, as shown in Figure 6.1. Six of them (two thirds of the Asian sample) personally attended to the record keeping function themselves to monitor business expenses, cash flow management and to keep the information in-house. These practices reflect their long term orientation
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102 (Chapter 4, section 4.5.4.), high uncertainty avoidance (Chapter 4, section 4.5.3.), and their secretive nature (Chapter 3, section 3.7). As they were knowledgeable in accounting, as discussed in section 6.2.1.1, record keeping was not an onerous task:
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  • Fall '16
  • tax compliance, SME Operators

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