Large accounting firms and tax planning in a ‘fair tax’ era

This chapter analyses publications, reports and public testimony from large accounting firms, examining how the so-called ‘Big Four’ firms (Ernst & Young, Deloitte, KPMG and PricewaterhouseCoopers) have responded to recent developments in tax policy requiring greater financial and tax transparency and an emphasis on fairness in the tax practices of their clients. First, the chapter provides an overview of how tax specialists’ monopoly of expertise in tax policy has evolved over many years. Second, it explains and justifies the focus on large accounting firms, emphasizing their central role in the tax field, their relatively homogeneous tax practices, and their influence in the development of tax policy. Third, the chapter describes three interrelated developments that have thrown the spotlight on to the tax planning industry and increased the pressure on large accounting firms. These developments are the collapse of Enron, the growing momentum of country-by-country reporting (CbCR), and tax activism. Finally, it discusses Big Four accounting firms’ assessments of tax planning from a legalistic perspective, highlighting the resulting challenge of reconciling arguments of tax morality versus tax legality.