Source: Kenneth Hildebrand
DYNAMIC MEANS “CHANGING; action and in motion.” Dynamic is synonymous with lively, active, energetic, vigorous, and impelling.
In a blink, there is more change.
In another blink, there is additional action. Read More
THIS ACRONYM STANDS for the International Financial Reporting Standards being the standards and interpretations adopted by the International Accounting Standards Board (IASB).
During February 2006 the FASB and the IASB concluded a memorandum of understanding stating their intention to seek a convergence of their standards and interpretations by 2008. Remember FIN 48 is a FASB standard.
THE FINANCIAL ACCOUNTING Standards Board (FASB ) on July 13, 2006, issued the final interpretation amending FASB Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Of great importance was FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48. The purpose behind publishing the interpretations was to address the uncertainty in accounting for income tax assets and liabilities. FASB No. 109, in the past, contained no guidance on accounting for income tax assets and liabilities, resulting in businesses taking inconsistent positions. According to Read More
THE SARBANES-OXLEY ACT was promulgated in the USA on July 30, 2002, primarily in response to the major corporate and accounting scandals in the USA such as Enron , Tyco International , Peregrine Systems, and WorldCom . Sarbanes-Oxley (also known as SOX or Sarbox) was promulgated to restore investor confidence in the reliability of the information provided by companies trading their stocks on USA stock exchanges.
SOX 404, which is an acronym for Sarbanes-Oxley Act , 2002 section 404, states, Read More
THE TERMINOLOGY MAKES one think of these acronyms as famous sporting teams. But as famous sporting teams command attention, so do these regulations insofar as they impact on tax risk. What follows is a brief summary of these regulations, their impact on tax risk management, and why an orchestrated Tax Risk Management process will help with overall regulatory compliance.
IN AN ATTEMPT to address the occurrence of material weaknesses under SOX 404 (dealt with in chapter 8), and in an attempt to limit these exposures, Margaret S. Thomas CPA in her lecture notes on “Sarbanes-Oxley 404: Compliance and Beyond,” 2006 states that “an ethical cultural environment should be created in any business. Management should create policies that create a positive environment for employees, without fear of reprisal, to report unusual occurrences. All incidents of alleged fraud or discrepancies must be investigated promptly and action taken. Employees must be encouraged to come forward with any information that may have an impact on the business.” Read More
This is one of the key areas. This displays all tasks that have been identified by the tax team as risk areas within the organization and are known to the IRS. These risks have been quantified, and a total value of the overall tax risk exposure is displayed.
This is another key area. This displays all tasks that have been identified by the tax team Read More
The Tax Risk Management Web Interface design should entail some of the following features:
– Interface customization according to each division in the business to be separately identifiable, with a consolidation option.
– Log on through a three-level log-on secure method:
– Username Read More
The purpose of this IT specification of a Tax Risk Management Web Interface System (phew! a mouthful of IT jargon, but simply put as the “Tax Risk Management Web Interface”) is to determine an organization’s tax risk and from that point forward to help manage that tax risk. The Tax Risk Management Web Interface is one of the key Tax Risk Management tools used.
The following aspects are important in the execution of Tax Risk Management Web Interface: Read More
THE QUESTIONS PUT to the operations divisions in the business that will require regular review, as part of the Tax Risk Management strategy, will include the following:
• Do you know which perks or fringe benefits are subject to VAT?
• Have you accounted for VAT on any perks or fringe benefits?
• Have you exported any goods or services?
• Have you imported any software over the Internet and accounted for the VAT?
• Are your export documents 100% compliant with the tax regulations? Have you actually Read More
PERSONNEL OFTEN MISUNDERSTAND instructions or make mistakes due to overwork, carelessness, or distraction. Temporary or new personnel may also not be adequately trained on new processes they have been introduced to. All of which contributes to the creation of additional unnecessary risks.
Breakdown can be avoided by careful and consistent communication, especially to new and temporary personnel.
HUMAN JUDGMENT, ESPECIALLY when subjected to pressure, is imperfect. Unless checks and balances are introduced, and encouragement exists to communicate pressurized decisions that may have a negative tax implication, improper human judgment will lead to additional tax risk. For instance, it often happens in a merger acquisition scenario that parties to the transaction are placed under great pressure. Deadlines are created, and parties from all sides do their absolute best to ensure that the deadline is met, for fear of reprisals that may stem from causing the merger or acquisition to flounder. Read More
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