Record to report. Are you audit ready?

Transcription

1 Record to report Are you audit ready?

2 Panel Moderator Panel Cleedon Botha Anselme Patipewe Njiakin Stephen Ntsoane EY South Africa Director EY Cameroon Associate Director EY South Africa Director Sean Kleynhans EY South Africa Executive Director Rui Henriques EY Angola Director Page 2

3 Agenda Audit landscape: Identifying the gaps Are you a target? Audit readiness: How confident are you of your records? Requests for information: Can you effectively respond? The way forward: What to expect in the future Page 3

4 Audit landscape Page 4

5 Audit landscape Profile of company or taxpayer: What we are experiencing on the ground Types of audits and focus areas: Identifying the gaps Record Report Transactional Operational Financial accounting Tax Compliance Statutory Reputation Internal audit External audit Tax authority audit Page 5

6 Are you a target? 89% percent of global respondents to this survey have experienced a revenue authority review or audit in the last three years. 76% have experienced a growth in the overall number or aggressiveness of tax audits. 64% report an increase in cross-border focus by tax authorities. Companies with cross-border trade should expect a whole new level of tax authority scrutiny. *Taken from the Global Compliance and Reporting insight survey Think Global Act Global Page 6

7 Audit readiness Page 7

8 Audit readiness How confident are you of your records? Reasonability test vs. formal testing Frequency of adjustments Reliance on audit results Your approach to the audit Responsiveness to requests How material is materiality? Centralization vs. localization impact on audit approach? Managing perceptions multinational company vs. local profits Visibility on transactions access to records and record retention Internal processes and controls over compliance and reporting obligations Page 8

9 Audit readiness (continued) 35% of respondents use no tool whatsoever or make the use of data or transaction repositories the responsibility of local tax professionals. 27% use spreadsheets or similar templates. 14% use some other form of internally developed technology tool. 27% license or purchase third-party software. 7% use software provided by their outsourcing, accountancy or professional services provider. *Taken from the GCR Insight Survey Think Global Act Global Page 9

10 Requests for information Page 10

11 Requests for information No. of countries Format of information required The language in which documents should be provided to the tax authorities Global Policies and Agreements Local Policies and Agreements General Ledger Other Statutory Information Harmonizing information across audit types Use of data rooms Record retention Shared service centers vs. local retention requirements How much information is enough? Other supporting documents e.g. invoices; payroll schedules; etc. English Local language Combination How this information is provided to the tax authorities Manual Electronic Page 11

12 The way forward Page 12

13 The way forward Real-time risk and process management Harmonization of your business model to comply with local legislation Continuous assessment of audit readiness and ability to respond Continuous monitoring of data quality Effective tax risk management in all business processes Transparency Relationship building with tax authorities and other stakeholders: Inclusive approach (industries and authorities) Tax exchange of information What to expect from tax authorities: Data analytics Data tagging-use of taxonomy [e.g.: Organization for the Harmonization of African Business Law (OHADA)] Page 13

14 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com EYGM Limited. All Rights Reserved. EYG no. DL1434 This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com