Tax Risk and Internal Controls – Protiviti CPE Day Session Recap
Lauren Ansley & I recently had the opportunity to present at Protiviti’s 2019 CPE Day in Tampa, FL. Once again, Protiviti put on a strong program covering a wide range of topics including finance transformation, insights from board of directors, cyber security, as well as our session on tax risk and internal controls. The attendees included finance, accounting and tax professionals from all different industries.
With tax legislation, particularly related to tax reform, continuing to change we often receive questions about how tax departments should adjust their existing processes and controls to accommodate the changes as well as guidance on what auditors require for support. Here are a few takeaways from our session:
- Tax is still a focus area
- Tax remains at the top of the list for restatements and continues to be a focus area for auditors.
- Risk assessments continue to show tax as a high risk area regardless of the tax liability.
- Managing impact to processes and controls
- Most organizations are still trying to understand how tax reform should impact their existing tax processes and controls.
- Documentation specific to tracking tax reform provisions is a trend we are seeing, which may include a research matrix tracking provisions and their impact to the organization, detailed memorandum, or other support which not only lists the specific tax provisions, but how these provisions impact the organization.
- What are auditors asking for?
- Auditors continue to ask for detailed support related to tax reform calculations and estimates regardless of whether the companies have a tax liability.
- Detailed proofs are requested to show that a company may not be subject to certain taxes, particularly international provisions.
- Once the more common calculations are covered, auditors are shifting their focus to less common items (e.g. fringe benefit deduction limitations, depreciation, etc.)
- For organizations who have incorporated updated processes, what’s next?
- Companies are looking to further mature and optimize their tax departments by operating more efficiently and implementing best practices around strategy and technology. This includes real time communication across functional areas within the organization and having a seat at the table for transactions and organizational changes.
- Want to see where your company falls on the tax maturity spectrum? Take our simple self assessment.
While companies continue to get a handle on the financial impact of tax reform, there is still a gap in how to develop processes and controls to address the changes. We can help. Send me an email at Jennifer.Crawford@TPCtax.com or call my office at 813-434-4011. Also feel free to contact any of my colleagues listed below.
Thanks to Protiviti for including us and putting on a great program!