Taxation stream of accounting industry

Executive Summary

Finance industry is most vulnerable to frauds, errors and security breaches. Over the years many companies worldwide have upgraded their systems. Besides providing reliable services companies in the financial industry must provide fast and efficient services in order to maintain competitive advantage. In particular the taxation industry is rapidly growing and moving from a retail base to digital field. H & R block is a tax service provider along with many other services. It is also facing a competitive market and must update its systems in order to derive maximum value from its information system. The report below analyses the organization in details. How its Information Systems are currently working. It then provides a detailed recommendation with a comprehensive approach in obtaining maximum value from Information systems. Both ideas and as well as new forms of technologies are discussed and how they can help H & R block in achieving competitive advantage.

Background information:

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.

Tax Accounting is one of the most challenging and most 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

As Accounting industry is part of the financial services industry, we would provide with a little insight on the financial industry.

Finance industry is also known as the financial services industry. Finance industry is all about money which includes banking like savings and loans, commercial banks, mortgage banks, credit unions, securities and exchanges like brokerages, investment banks, investment advisors, and international finance like currency exchange, foreign investment. To run a finance industry, company needs and uses all information systems to connect and share with each and every sector. Finance industry uses two types of information systems which are Operation support systems and Management support systems. Operations support systems usually use managers at lower levels of organization. It has three main parts which are transaction processing systems, process control systems, and production systems.

In transaction processing systems, industry keeps record and processes its daily activities which receives input data (also called transactions) and converts them into output information. However, financial transaction affects the firm's assets, reflects its accounting statements, and measures in monitory terms by sales of goods to customers, purchases of inventory from suppliers, and salaries paid to employees are all financial transactions. An example will show how a finance industry and bank can interact with information system. First, financial industry and bank can learn about e-commerce and they use business practice and technology to develop their products and customers. Next, e-commerce offer new products and services to finance industry and bank in order to serve the emerging needs of e-commerce. However, finance industry uses designs, develops and sells semiconductor system solutions, comprising semiconductor devices, and software and reference designs for use in broadband communications applications. Theses whole processes are running using information system. Process control is very important and useful information system for a company. It is an automatic sensor that collects data occasionally. For example, in a finance industry, some slot machine are down, or a machine broke, or someone accidently hit on the jackpot then downed slot machine automatically sends message or signal which selected up by monitoring and paging system and send back to a service attendant. Another important system is design and production systems. Now a day, any companies or industries cannot run their products and services on time and cannot organize properly or neatly without information technologies. Computer aided design system allows to test computer model digitally before it moving into prototype stage. Computer aided manufacturing helps to do the steps that need to produce components and instruct machines to do the required work. However, computer integrated manufacturing system is a flexible system makes it possible to change equipment setups by reprogramming.

The second types of information systems that finance industry uses are management support systems. All managers from mid and upper level use these systems to support their decision making activities. It has also three main parts which are management information systems, decision support systems, executive support systems, and expert systems.

Management information system basically extracts data from a database to help managers to make regular decisions in order to collect reports such as sales analyses, inventory level reports, and financial statements. For example, a financial manager gets a number of reports every day that's responsible for finance operations including a financial analysis report, and a profitability report. However, other important interactive system is a decision support system which collects, display, and combines together from different types of sources in order to help managers for irregular decisions. For example, a finance industry is trying to open a new casino business but the company is unsure whether it would be a good decision. Thus, management of the company uses a decision support system to make sure. First off all, it extracts data from internal sources to make sure company's financial strength then managers seek for the data needed to decide whether this casino has a value for the customers. Using decision support system, finance industry can easily make any critical decision with more reliable.

Another useful information system is executive information system. It customizes the data or information and present in a suitable format. For example, top managers in a finance industry have no or less time to study and analysis large volume of data, thus, they use information system to analyze the data and present it in well designed manner in order to make quick and effective decisions. Managers can easily use colour graphics, touch screens, voice activated commands in a less time with a more effective way.

Finance industry has already taken Porte's five competitive forces advantage of information technology that is their main sources to solve the main business problem. Porte's five advantages are potential entrants (threat of new entrants), suppliers (bargaining power of suppliers), substitute (threat of substitute products or services), and buyers (bargaining power of buyers). For example, cash management of finance industry use information technology for the line of banking and brokerage which become competitive advantage for the financial services organization that develop the product and services. Most important information system that helps finance industry is enterprise systems which are designed to integrate the entire value chain process in an organization and business processes into a synchronized procedure. This allows industry to achieve high performance in development, customer responses, and business operations and make data well organized and easier to be analyzed in a meaningful manner. By using enterprise systems, company's can optimize business processes and analyze system data to improve decision making within various departments. Other benefits of using enterprise systems are reduction in cycle time, faster information transactions, and better financial management.

Moreover, using business intelligence solutions (Computers, Internet, Ethernet, Interact machine etc.) in the finance industry is distributing much more effectively among all personal line of business. Business intelligence uses consolidated information, support sales and marketing, and manage risk and tolerates line of business and personal financial products in order to analysis finance company and its customer service. For example, finance industry is may be all about money, but most likely it is information business. Controlling and managing money and assets are main job for a finance industry. Thus, it is hard for an industry to keep track with customers with contract and consumer items such as plastic cards and checks at the same time. Information consolidation combines them together so that industry can keep track on both. This is the area where business intelligence is trying to concentrate on tracking and informing by information systems about industry's operations.

Ethics and securities issues:

Finance industry and technology executives both together looking for critical security issues such as encryption, security strategies for mobile payments, and regulatory concerns for cloud computing. Finance industry is trying to change industry structure and regulation. However, number and size of bank mergers increase in the U.S. after removing the geographic barricades. Thus, U.S. banks operating had declined.

Moreover, industry is increasing protection against online fraud that is a higher priority for most of the organization. Industry uses web fraud detection in order to find and protect information from others. Information risk management helps to recognizing assessing, and mitigating the risks that information is represented to its lifecycle. By using information risk management strategy and information security solution finance industry can effectively run their business. However, company should be aware of any kind of frauds and competitive industries.

Most finance industries are unethical that financial services affect everyone. Usually financial industry is financially large company and it covers banks, securities firms, insurance companies, mutual fund organizations, investment banks, pension's funds, mortgage lenders. Due to its largeness, finance industry has some lacks of its ethical issues.

Use of Information System in the 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.

The company's tax professional uses computerized programs which are updated frequently and consist 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 digital tax solution 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; Intuit Inc. the largest supplier of tax preparation software and online tax preparations services and other smaller competitors due to the reasons listed below:

  • 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.
  • 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
  • Reputation of quality: H & R block are highly reputed for their tax accounting and tax preparation services with higher quality of services at affordable prices.
  • Acknowledgement: proof of receipt will be provided upon submitting the file to the CRA via Net-File.
  • 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:
  • 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. The software is password protected and H&R block will not have access to the information entered by individuals if not being assisted by the tax professionals from the organization.
  • Cash Back: H & R block is the only tax accounting/prepare company which offers cash refund on the spot and this is one of the biggest advantages they have over their competitors.

Suggest pros/cons of this implementation compared to industry norms

Pros

  • Saves time in mailing
  • Quick estimate of refund/payable of taxes
  • Ability to changing your banking information instantly for automatic deposit of tax refund
  • Environment friendly: cuts the usage of paper
  • User friendly: gives brief knowledge about the accepted and unaccepted information to be filed or not to file in the return. For example: allowable losses for the year, carry forward of gains and losses from the previous years, eligible non-refundable tax credits etc:
  • Usually free for families with low-income
  • The return can be filed at the users convenience
  • The software allows group filings at a cheaper price compared to filing individual returns
  • No signature required unlike the traditional paper filing
  • "HRBlock online tax software offers 5 choices of service at different costs. They offer a limited free filing service. Audit coverage is provided at a cost. Advanced tools are available on more expensive plans"

Cons

  • Not everyone prefers the online services for filing returns
  • Security issues: threat from virus, worms and hackers
  • Proper firewall is required in order to run the program smoothly
  • Human error could cause misstatement of refunds or taxes payable. Therefore, accuracy would be an issue.
  • Accepts and processes whatever information is inputted by the users
  • Complex to use for the new adopters or users of limited computer skills and knowledge
  • Requires a computer
  • Does not process the request for filing taxes if failed to have a PIN for net filing mailed out by the CRA
  • "The extra choices add to already complex software with too many choices. It seems like HRBlock has worked hard to maximize revenue at your expense. Several annoying requests for refund loans and similar services add to your cost if purchased. At a cost of up to $99.95 (extra for state returns), HRBlock is not a value. At this price you can have an accountant do it for you beginning to end."

How was value derived from the IS

Security: By using security features and biometrics such as fingerprints, voice recognition, signature recognition and other features high level of security is achieved. The value driven from using such features is the reliable image of the firm which gives it a competitive advantage in the market.

Accuracy: Revision of data entry, as well as software checking for errors and mistakes can increase the accuracy level.

Integration: Level of integration is currently week as different application and software are being used to perform several tax services. H & R is in need of a system that integrates all the applications together so that employees can perform several services using one system.

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

H & R blocks software called TaxCut used for preparing income tax returns are developed in-house by the company's IT department. The software offers simple step-by step tax preparation starting from the interview process to data import to calculations and completion of returns and checking for errors before submitting the file. During fiscal 2007 the company acquired a company named TaxWorks LLC; independent tax software preparer and all the affiliated entities and started producing their own tax software.

H & R blocks practice developing their software's in-house development is an appropriate choice made by the organization. As mentioned above, H & R has acquired the independent tax software preparer and its entities in order to stay competitive. As H & R are highly indulged in tax accounting services and making user friendly tax software's the choice of in-house development is advantageous due to the rapid change in technology and the change in Taxation rules, having control over the IT department would be very beneficial as the company can meet the market standards and exceeds people's expectations by providing them with up-to-date information. However, the company shall frequently modify and customize the software programs. 5

An alternative for H & R blocks practise of developing software would be Outsourcing. The option of outsourcing the software would increase the costs where specific designs might be needed to implement but on the other hand, the practise of outsourcing would reduce processing time. Reducing the processing time would allow the organization to have enough inventories on hand and keep adapting to the technological changes being made. This would reduce the cost of hiring new IT personnel for the product development process and training old employees to keep themselves updated with the changes in the technology and current market trends. In addition to the factors listed above for outsourcing, capital cost would be another factor as the company would not require spending significant amount of money initially towards the product development. Due to the significant amount of money being saved by the company, the process of outsourcing will attract investors (Franchisees), creditors (banks) and other interested parties.

Financing the Information System

We believe the transmission of CICA rulebook into the new program software would be beneficial for the organization and maintain the competitive advantage in the industry. The plan could be implemented by outsourcing the IT department to highly reputed companies such as IBM in order to stay competitive and connected to the changing technology. This will reduce the cost and save time when providing tax services to the clients or the software being used by individuals to satisfy their tax services. The cost of developing the software through outsourcing would be significantly higher in the beginning but reduce the time processing time. However as the time elapses the company will save costs in the form of capital as the technology needs to be improved time to time in order to stay competitive in the market.

Implementing the Software using outsourcing would increase the total costs from $1,685,000 to 3,835,000 for the first year, due to the first year of development and implementation and as the time starts elapsing the revenue keeps growing matching the expenses incurred.

The implementation of the new software using outsourcing to increase competitive advantage in terms of easing the process of tax accounting for the users. By analyzing the NPV, we find that NPY for H&R block is $420,465.85 if outsource and 28,371.84 if practices the in-house development process. The benefit of $392,094.01 is huge and valuable for H&R to use outsourcing as an alternative. (Appendix A)

Tangible benefits

Simplified user management would be one of the tangible assets. Every year H&R block's tax services segment spends enormous amount of money on researching different and effective ways to improve their software programs and stay connected with the technology. With the use of the computerized up-to-date software programs developed by outsourcing, the company will reduce overhead and administrative costs as the hassle of hiring and training new and old employees on the technological advancements and reduce the cost of R&D. The software programs could be combined with the CICA rulebook where the tax accountants could sue the software itself as a reference to their work and gives simplified examples to the new users of the software. With combining the physical and logical applications into a single program, it would allow H&R to just add the changes made to the CICA rulebook when the changes occur and add additional features to the software program being used. Increased productivity by the tax accountants would be an asset here as the use of new software program with combination of CICA rulebook would allow ease to the accountants to look up in the software for references if needed. This will allow greater potential for revenue growth as the process of filing tax returns and doing tax accounting would be easier and speed up the process as the references are readily available to be looked upon when required. This would also decrease the cost of educating the other users of the software program as the required information would be just a click away from them. (Please refer to appendix a).

Intangible:

The electronic copy of the software would be more secure, reliable and time consuming compared to the traditional paper copy used for filing returns by tax accountants and individuals. The electronic copy would allow the tax accountants and individuals to file tax returns in a less time consuming way than the traditional paper filing. By using the software, the preparer can go back and correct the calculation errors caused by the human error and review the information on the refund or taxes payable without having to sit with the calculator struggling to solve the numbers and changing paper forms if the mistake tends to happen.

The software program will be more reliable as the combination of the software program linked with the CICA rulebook allows greater ease of looking up for references when needed and the software is prepared by the IT professionals and has been reviewed and certified by the Net-file services who then approve the software programs to be compatible with the CRA's requirement.

The software programs comes with security software which allows the users to file their returns with a piece of mind without having to be worried about the possible threats from external sources such as viruses, worms, hackers etc. The software programs allows the users to create their user id and passwords so that the information can be protected by unauthorized activities and unplanned events. The user does not have to be worried about their file being misplaced or not reaching CRA as once the file is transmitted it prints out the confirmation report of the receipt of the file. Unlike the traditional paper filing method where the threat of security is high as the mail might be misplaced and reach into the wrong hands or does not reach the CRA in time. (Please refer to appendix A)

Discuss the option of outsourcing the system or software as service model for this type of system

The option of outsourcing the software is a great option that H&R block can implement in order to stay connected with the latest technology to have a competitive advantage. The practice of outsourcing would increase the costs as the information needs to be updated whenever requires, but on the other hand the processing time will be reduced. This also saves company time and cost of hiring new employees and training the old ones to stay connected with the new technology Capital cost would be another factor that can be taken into account as the company would not be required to spend significant amount of money initially towards the software development. Due to the significant amount of money being saved by the company, the process of outsourcing will attract investors (Franchisees), creditors (banks) and other interested parties.

Recommended Improvements:

The recommendations provided below are a combination of ideas and applications that can be applied in general to different companies in the finance industry. These solutions will not only help H & R block and are not limited to one particular firm they can be integrated into any business operating in the finance industry.

The goal for any financial service providing company is to be efficient, safe and provide reliable services. In order to achieve that there must be a strong integration between the applications and systems used. One application used to provide a specific service can also be used to provide another with slight modifications. The easier it is to operate the applications the better the services can get. Currently H & R operates two major business functions, retail tax services and digital tax services. The level of integration between the two operations is very week. The main issues faced by H & R block on which the below recommendations are based include:

  • Providing accurate services, free of errors: In 2006 Accounting errors forced H&R Block to restate earnings from the previous two years.
  • Customer privacy and ethical concerns: H & R must protect customer information and privacy by having strong controls in place
  • Fast and reliable services: It must provide customers with accurate and efficient services in order to maintain competitiveness
  • Strong internal controls in order to prevent fraud: In 2001 the company pays $21 million to settle an old fraud lawsuit brought against Olde Financial.
  • Improvements in software and technology for enhanced services: An upgrade is requires in most of the software being used across the company

A comprehensive approach:

H & R is one of the leading taxation service providers in the industry, offering a variety of retail and wholesale products and services through its electronic and retail network. It has branches and offices worldwide. It has a complex information system in place and a very broad network of email. The nature of H & R's electronic operations is complex due to its size and operations. For this reason one application or alternative cannot overcome the challenges. Currently the firm is faced with many challenges listed above. H & R's complex and vast operations require a much comprehensive approach. In order to promote employee productivity, privacy and ethics H & R needs to adapt a comprehensive approach based on the following components.

A comprehensive control system: Currently the management is working towards a very limited approach of implementing an application control. Application control is only a small element under a broad range of controls. When all the controls are put in place together only then the organization can achieve effective results and overcome the challenges. A comprehensive control system involves the following controls:

  1. Control environment: This is the foundation of the overall control system. It encompasses management attitudes toward controls, as evidenced by management actions, as well as by stated policies and procedures that address ethical issues and the quality of supervision. It can also include several other additions such as, the ethical employee of the month award programs, seminars on promoting ethical behavior in the organization. This is where the management needs to build a healthy ethical environment within the company. However, not everyone is ethical in their conduct and thus the next approach should be to set some general controls for those employees who are unethical in nature.
  2. General Controls: General Controls apply to more than one functional area. Their main function is to make sure that organizations have security policies and procedures, to protect all applications using physical and software controls such as anti-virus or firewalls, and to protect individual applications with controls over how information is entered and managed.
  3. In particular the general control that H & R needs to focus on is Communications Control. It secures the movement of data across networks. H & R can control the firewall capabilities which can prevent company information or employee's private information from leaking out of the network. The company can also establish anti malware soft ware's which can protect the email systems. It can also help decrease employee theft of valuable company information such as passwords and accounts information.

    Furthermore H & R should implement a complete employee monitoring system. This system monitors the overall operations of the employees and not just a specific function such as an account. When an employee is more comprehensively monitored he or she will perform better on the job and will be less rebellious towards being monitored for emails only. The monitoring system can include, computers, email activities, internet surfing etc. This is useful for the overall Control Environment for the company. Just monitoring email is not enough, in order to maintain a high ethical standard all operations of an employee should be monitored. This step will promote ethical behaviour and train them to perform their duties professionally and ethically.

  4. Application controls: The last step is to implement an application that specifically deals with controls on systems. For this purpose the management can install specific security features on the software that limit its use and prevent information from leaking.
  5. The above recommendation is made based on the nature and operations of the business. It is difficult to implement a full comprehensive control system and it requires time. However it will benefit the company in the long run and it's the best solution to solve the problems permanently. The management would need to slowly build employee confidence into this system. Their privacy will be compromised therefore H & R needs to make alternative arrangements for those employees. One of the steps H & R can take to solve this issue is to have an opt-out model.

    An informed consent permitting the company to collect personal information until the employee specifically requests that the data not be collected. Those who opt out should be provided with a separate email system. If a complaint or problem occurs then they can checked by examining their specific mailing data base. Overall, the comprehensive control system helps establish a complete system of controls in the company. It will take time and will be difficult to implement in the early stages but once it's established it will prove to be beneficial in the long run.

Use of specific technology and software:

The first section of recommendations above dealt with the issues of having a strong control environment in order to prevent fraud, errors and provide reliable and accurate services. The last section of recommendation will deal with providing, efficient, fast and reliable services through the use of new technologies.

Currently H & R is using several smaller applications to perform its tax services. Many of which are outdated and are less efficient. H & R is in need of a system which can integrate all the smaller applications and software currently used and make them easily accessible to all the employees. This can greatly increase the productivity of the firm and provide fast and reliable service at the same time.

M- Taxing device

M-Taxing device is a concept which is currently under development and discussion. It is not yet implemented or manufactured. H & R can invest in this concept and benefit from it in the long run.

Concept and use

The m-tax system (Mobile Tax system) will include the components of an internet enabled mobile device such as, cell phone, handheld computer or PDAs. It will include mobile tax software, an input of personal data, procedures to find the refund allotted to the tax payer or taxes owed to IRS and additional security features.

In m-tax system the components will be interrelated and networked together with internet enabled mobile device and the calculations would be performed with user's input of their personal tax information. The purpose of such a device would be to facilitate the use of mobile devices in order to allow users to perform yearly taxation services in a more timely and convenient manner.

M-tax system can be equipped with a 3G (third generation), Wi-Fi, and internet capabilities. The user would need the required forms such as their W-2s in order to file their taxes. Upon entering user's data the system will be required to send this data to the Internal Revenue Service (IRS) for verification and confirmation of retrieval

After the user has entered the necessary input, the system will be required to send this data to the Internal Revenue Service (IRS) for verification and confirmation of retrieval. The need for this outside information and organization enables the need for the disbursement of W-2s by the user's place of employment and the IRS to be part of the system's external environment.

The interface of the m-tax system will be where the system meets its environment.

M-tax system will include a user friendly interface that will be compatible with all mobile devices.

The device will also allow users to access different information and pages while using little effort. This is a concept of made-for-the-medium, shrinking web pages down to the accessibility of a mobile device (Venkatesh & Massey, 2003).

The m-tax interface will be straight forward, user-friendly, and easily accessed and should have an aesthetic result from the colors and layout utilized by the m-taxing software from the small screen that a mobile device entails (Economides, 2008)

User input:

The user enters necessary data required by the IRS in order to compute a refund or amount owed back to the IRS. A username and a password would be required for security, personal information such as social insurance number, address, the required input from user's W-2 and banking information.

Output:

The output would include computed figures of the IRS, email verification and confirmation that the data has been received.

Security and privacy:

With mobile device connected to internet via 3G and Wi-Fi the need for encryption and security features is essential. M-tax can be equipped with additional security features and the firewall capabilities can be increased as well. Usability studies have showed that users become more confident about the security of the system when they see visible signs of security (Sharma, 2006).

Additional features such as fingerprints, voice and signature recognition can be installed as well.

Data Flow Diagram

Below is a detail date flow diagram indicating how the m-tax system works. By analyzing the below diagram we can notice the efficient and secure procedures that are in place in this system:

Implementation

The concept of m-tax is not very difficult to understand. The implementation of this device can be achieved very easily. It will require initial investment in designing the device according to companies needs. Once the system is developed it can be tested and implemented within the organization in a short period of time. The employees would just require a few lessons and could learn directly from the help features provided within the software.

The above recommendation not only includes the use of technology but it also sets up a frame work by which company's goals can be achieved. By having a strong control environment H & R can maintain it's reliable and secure benchmark. And by implementing technology such as m -tax system it can get the productive edge over its competitors in the taxation industry.

Appendices

Appendix A:

Tangible benefits

  1. Increased Productivity: Increased productivity would be one of the most important benefits of implementing the new software with the combination of CICA rulebook. Having greater output than input helps the organization in a positive way. The software would allow the tax accountants to carry out their duties both efficiently and effectively in minimal amount of time. In addition to carrying out their duties effectively, another objective would be to enhance the security for their clients as the clients financial and personal information is being transmitted into the system. Spending less time towards a task could allow the employees to look into the security related tasks and reduce the possible security related fraudulent costs.
  2. Reducing the Overall Infrastructure: This would be the second most important benefit because it would save H&R's the time, money and hassle of always having to replace redundant technology. By implementing the new software program with the combination of CICA rulebook, instead of having to replace the system as a whole after a couple of years of use which had originally cost the company enormous amount of money, H&R can upgrade the software. The same applies for the implementation of biometrics as it is a technology that has a long life. This would greatly reduce the costs of always replacing old technology while at the same time maintaining this new software with constant easy software upgrades.

Simplified User Management: The elimination of having to conquer multiple obstacles in order to accomplish one task would free up time for employees to look into and complete other tasks which may require attention. This would be a benefit of effective time management and would be a benefit to tax accountants as well as the users of the software.

Intangible benefits

  1. "System security is a branch of computer technology known as information security as applied to computers and networks. The objective of computer security includes protection of information and property from theft, corruption, or natural disaster, while allowing the information and property to remain accessible and productive to its intended users. The term system security means the collective processes and mechanisms by which sensitive and valuable information and services are protected from publication, tampering or collapse by unauthorized activities or untrustworthy individuals and unplanned events respectively."6
  2. Reliable: dependable, accurate, honesty etc. The software programs are reliable source as the information is being updated as the tax rules changes helping the users stay updated with the recent changes.
  3. Less time consuming: allows the users to file the returns in lesser amount of time compared to the traditional method of filing using the paper based forms. Only the data needs to be inputted and the system does all the calculations and avoids the hassle and time needed to use calculator to get the numbers in the old traditional paper filing method.

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