Out sourced Tax Department 2269

  • This is a dumb question.%0AWhat type of controls should I expect to find for a company that outsources the tax function 100%. %0AThanks

  • That’s a difficult question to answer without more details on size/complexity of the tax function.
    As with any outsourced process, you will want to ensure that the outsourced service provider has good process controls (SAS 70, if possible). You will also need to ensure that there are controls over information sent to the outsourced service provider to ensure that the information is complete and accurate and that it is picked up correctly by the provider. You will want controls over information coming back from the service provider to ensure that all information is booked accurately in the books of the outsourcing company. The provider should also be qualified to perform the tax work (ask for qualifications).
    To get more specific, I would probably need to know more about the complexity of the taxes for this company.

  • Hi and welcome to the forums 🙂
    There’s no such thing as a ‘dumb question’ and in fact, this is a good relevant one.
    Some ideas include:
    – Ensuring the value-added business partner is carefully following required SOX best practices for controls (e.g., classical audit practices like ‘separation of duties’, ‘autonomy controls’, etc., COBIT checklists for IT systems, if your external auditors use these, etc)
    – Ensuring they have good IT security that prevents any form of alterations to financial information either accidental or intentional. As information must be constantly exchanged via email, VPN, or other controls, this might be a little more important to look at, than an internal only operation.
    – Ensuring they meet the SOX retention of information controls (7 years in some cases for key documents)
    – Check with your external SOX audit firm for additional ideas/concerns they may have
    – Ensuring SOX requirements are properly spelled out in the contractual documents for both organizations (so there is no ambiguity).
    For additional ideas, you might copy this link to your browser:
    http-and-#58;//www.google.com/search?hl=en-and-q=SOX evaluating outsourced financial operations

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