chapter 9 quiz Flashcards
The evaluation of the impact of different tax scenarios/alternatives on various outcome measures including the amount of taxable income or tax paid is called:
what-if scenario analysis
What allows tax departments to view multiple years, periods, jurisdictions (state or federal or international, etc.), and differing scenarios of data, typically through use of a dashboard?
Tax data visualizations
Predictive analysis of potential tax liability and the formulation of a plan to reduce the amount of taxes paid is defined as:
tax planning
The task of tax accountants and tax departments to minimize the amount of taxes paid in the future is called:
tax planning.
According to the textbook, an example of a tax cost KPI would be:
ETR (effective tax rate).
According to the textbook, an example of a tax risk KPI would be:
levels of late filing or error penalties.
Tax departments interested in maintaining their own data are likely to have their own:
tax data mart.
In which stage of the IMPACT model (introduced in Chapter 1) would the use of tax cockpits fit?
Track outcomes
According to the textbook, an example of a tax efficiency and effectiveness KPI would be:
amount of time spent on compliance versus strategic activities.
According to the textbook, an example of a tax sustainability KPI would be:
number of audits closed and significance of assessment over time.
Tax cost - the actual amount of tax paid.
Example KPIs include:
- effective tax rate (ETR)
- cash taxes paid
- effect of loss carry-forwards
- expiration of tax credits
- tax adj. in response to a new legislation
- deferred assets
Tax risk- w/ increased regulator and stakeholder scrutiny, firms bear the financial and reputational risk of misreporting or tax provision adjustments.
Example KPIs include:
-frequency and magnitude of tax audit adjustments
- frequency of concerns pertaining to the orgs tax position
-levels of late filing or error penalties and fines
-number of resubmitted tax returns due to errors
tax efficiency and effectiveness- this includes the efficiency and effectiveness of technology, processes, and people in carrying out the tax function
Example KPIs include:
-levels of technology/tax training
-amount of time spent on compliance vs strategic activities
-level of job satisfaction of the tax personnel
-improved operational efficiency
tax sustainability- refers to the ability to sustain similar tax performance over time
example KPIs include:
-number of co tax audits closed and significance of assessment over time
-the effective tax rate (ETR) over time
tax permanent differences- additionally, tax managers should track perm diffs between book and tax rev and expenses to ensure compliance and dispute overpayments of taxes
these include:
-penalties and fines (excluded from taxable inc)
-meals and entertainment (100% book, 50% tax)
-interest on minuciple bonds (non taxed income)
-life insurance procees (non taxed inc)
-DRD (taxed based on % owned)
- excess depreciation
