Tax and Internal Auditing
Augment your internal audit resources to enhance performance
Taxes are complex and embedded in many aspects of a business enterprise, from taxes on income and payroll to transaction taxes, such as sales, value added tax (VAT), excise and property taxes, to information reporting. Tax departments depend on data provided by accounting, as well as information maintained on databases outside the mainstream Enterprise Resource Planning (ERP) system — and must often process information using a myriad of manual processes, bolt on tax software, and complex spreadsheets to meet the company's worldwide tax compliance and reporting obligations.
The complexity around tax translates into risk for most organizations. Accounting for income taxes continues to be a leading cause of material weaknesses. Managing tax risk, however, involves more than avoiding errors in financial and tax reporting, but also requires that the right governance, structure, and protocols are in place to recognize the value of rewarded risk-taking gained through appropriate tax planning. The internal audit function in many complex organizations may not always have the depth of technical knowledge necessary to undertake a tax risk assessment, evaluate the appropriateness of controls, and assess the validity of mitigation factors.
Deloitte's experience providing tax internal audit services to a wide variety of clients has led us to develop a flexible level of internal audit assistance that can include:
- Identifying specific areas for client's risk assessment coverage.
- Generating questionnaires for individual interviews on specific topics.
- Documenting interviews and test results.
- Assisting in the design and execution of tax internal audit testing.
- Analyzing potential solutions for remediation.
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As used in this document, ‘Deloitte’ means Deloitte Tax LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.