Trends in Income Tax Reporting Automation

This report presents research findings pertaining to some of the issues, both internal and external to an organization, governing the introduction and implementation of automation in the "reporting for income tax purposes" process. The focal point of this research is a set of interviews with senior financial executives, conducted with the aim of gaining valuable insights from their practical, real-world experiences with tax automation.

The research also explored obstacles and issues that might be encountered when deploying tax automation technology.  Among the factors driving the decision to automate the income tax reporting process is the desire to integrate the tax provision function with other corporate finance processes for improved transparency and controls, and improving data integrity throughout the provisioning process. Another key factor is the growing risk associated with "spreadsheet sprawl" and the fact that post Sarbanes-Oxley (“SOX”) minimizing the use of spreadsheets in the tax process is a "hot-button" issue for auditors.

With tax departments stretched dangerously thin and at the mercy of spreadsheets, business decision-makers must weigh their options and determine whether to stick with spreadsheets or to invest the time, money and manpower to implement an automated income tax reporting system. Those choosing to automate their income tax reporting and move beyond the same as last year's mentality should also assess the impact of IFRS adoption on their tax processes and on the tax automation systems they are considering for implementation.