As a CPA I use tax technology to help me audit and advise clients. It is very easy to say you are an accountant, or offer CPA services, but there is nothing simple about being self-employed while working in the public sector. This is where I find the tax system so confusing, complex and intricate. It took me a long time to get it straight and I am constantly learning new things as I continue to audit CPA's and offer CPA services.
I think technology has done a good job of making the tax system simpler, but in the end it is still confusing for most people. If you go into an audit knowing a few things, it makes it easier for the auditor. Technology has helped improve audit management and auditors are better prepared because they have tools to organize their data and file. However, the CPA still must learn the nuts and bolts of the audit management process. They need training and must keep up with changes in the tax laws.
Technology can be a great benefit for auditing CPA's. It helps a client better understand their tax situation and can even be used to create an audit trail so auditors know what a client is looking for. In a nutshell the idea here is to record and audit a client's behavior, which could include an attempt to minimize deductions, assets, liabilities and payroll preparation. Some auditing clients are creative and use a "dodgy" tactics in order to pull deductions they did not earn or consider.
Technology can be used by an auditor to automate his or her audit management and help them become more efficient. The most common type of this software is the Quick-Tax software. In years past a CPA would have to manually input every single tax document and then input their results manually into a database for auditing. This audit management needs to be robust and reliable. Most of the best Quick-Tax products will allow the user to import data from a variety of sources such as payroll, bank accounts and even the internet.
4. Reporting Technology
5. Management Tools
6. Cloud Technology
7. Security Objects
Another type of audit technologies involves the use of computer systems that collect and store audit information. Computer databases will usually store client's tax information as well as a host of other tax related information. This type of software usually has a built in audit management system that enables the user to create custom reports and to run automated reports. These systems are commonly referred to as "self-audit-proof". Using one of these systems will also allow the audit manager to make any changes they feel are necessary before a full audit. Auditors may be able to add a new tax year, correct an error or change the reporting methods.
Another type of audit technology is called compliance management. This software is used primarily by smaller companies or by self-employed individuals that have little to no auditing work to do for their company. This program allows a CPA to check the client's records on a daily basis to make sure they are meeting all of their financial obligations. When a company is audited, a compliance software package can often be used to make sure the tax returns are accurate. This software also assists in collecting non-refundable funds from clients that owe more than their reported profits.
The last type of audit technologies to discuss is the client audit management program. This program is often used for larger companies that need assistance in managing their own audits. Basically, the program makes it easier for a company to prepare their own reports and to collect their own records on a daily basis. If a company audited was using a CPA, they would most likely need to contact the auditing firm for each report.
Taxation technology is changing all the time. With more companies using computers to track their tax payments, more options are becoming available to the auditor who must determine if there are any problems with a particular return. Using the most up to date technology, auditors can easily spot red flags and determine the best course of action. Audits are much easier to handle when the entire process is carried out electronically.