Tax Accounting

Impact of Mobile Devices on Tax Accounting

2. Current State of Information Systems in the Industry (15%) – Section 1

General introduction to the industry and the types of information systems used

Tax Accounting belongs to the Accounting industry where different Accounting needs such as preparation of financial statements, audit, taxation, financial advising and counselling etc: for different corporations and individuals are provided with numerous Accounting services offerings. The Accounting industry takes over a collection of organizations that deal with the “occupation of maintaining and auditing records and preparing financial reports for a business or individual”¹. This includes organizations from different sectors of the economy such as people, banks, churches, government agencies, insurance companies, international firms, private and public corporations including sole-proprietorship, partnership and corporations etc: each and every business and individual requires accounting practises in their day to day life in order to stay competitive and financially organized. The accounting industry uses variety of information systems in order to satisfy accounting needs and wants of different types of organizations. Some of the information systems used by the industry for their day to day operations are computer-based software, application program, breadth of support of IS etc. Net-File is one of the most popular software used by both the accounting professionals and individual in order to apply for their federal tax returns at the end of the taxation year where it allows individuals and corporations to get the refund on the portion of taxes paid during the year.

This paper will be examining the taxation stream of the accounting industry while highlighting the impact of mobile devices on tax accounting. In today’s rapidly changing technological advanced world, Tax accountants and Auditors must understand the implications of the programs being used and understand the needs and wants of their clients.

* How is information used to gain a competitive advantage in this industry?

* What are areas for concern?

Tax Accounting is one of the most challenging and complicated sectors of accounting industry with lots of information varying from personal and corporate levels of taxation. “Tax accountants and auditors help to ensure that firms run efficiently, public records are kept accurately, and taxes paid properly and on time. They analyze and communicate financial information for various entities such as companies, individual clients, and Federal, State, and local governments.”²

Information system used in tax accounting tends to be very secure and has a great impact on the way it is being used to gain competitive advantage in the industry

4. Information Systems Used in your Organization for competitive advantage (20%) – Section 3

* Suggest pros/cons of this implementation compared to industry norms

* How was value derived from the IS

* You need to discuss how the information system was acquired (e.g. in-house design, off-the-shelf) and justify why this was appropriate or comment on better alternatives

Describe your organization

H & R block is the Canada’s one of the leading organizations heavily involved in tax preparation services at both personal and corporate levels. The organization was first established 55 years ago in the year 1955 and moved ahead in the industry as one of the leading tax preparing organizations with over 2 million taxes prepared every year. The company is headquartered in Calgary, Alberta and has 900 offices across the country.

Include a detailed description of the type of system(s) used to gain a competitive advantage

The company’s tax professional uses computerized programs which are updated frequently and are consists up-to-date electronic filing technology “to prepare all types of returns, including personal, small business, corporate, farm, trucker, fishing, U.S., rental and estate.” ³ The software programs used by H&R blocked are approved by Net-file; an electronic tax filing services connected directly with the Canada Revenue Agency (CRA) and Revenue Quebec (MRQ).

The use of mobile tax services (computerized programs) to file tax returns has a competitive advantage over the competitors due to the reasons listed below:

Ø Processing time: the use of mobile tax device would shorten the time required to process the request compared to the traditional procedure of filing returns manually, as the CRA receives the information as soon as it is submitted using the software and processes the refund within the time period of 2 weeks.

Ø Greater control: the use of mobile tax device lets CRA process the return immediately and any corrections necessary would be listed and could be corrected manually before submitting the final copy of the file

Ø Acknowledgement: proof of receipt will be provided upon submitting the file to the CRA via Net-File.

Ø Educational & User friendly: the mobile tax device educates the users of the all the information needed to file the tax return including all the available non-refundable credits, loss or gain carry forwarded available to carry forward in the preceding taxation year, the impacts of proving false information etc:

Ø Security: the information being transmitted through the software consist high level of security as the user’s financial information is being transmitted. The software is designed in a way that it warns the possible threat of viruses, worms or other external threats. In addition, it does not allow the information to be transmitted more than one time.




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