Audit Management

Business Challenge Tax and Revenue agencies are continually striving to improve efforts to identify and efficiently assess under-reported tax. Audit supervisors and managers need to monitor audit progress, effectively manage cases, know what is happening now (not months down the road) and be able to easily identify the cases that require their involvement. Auditors are constantly asked to conduct more audits and perform more complex audit functions, in less time and with less support staff. Managers, supervisors and auditors want easy access to all information about an audit in one place. How can an Audit Manager: provide their supervisors the tools that they need to effectively track and manage audits? facilitate supervisors’ involvement in the right cases to maximize return and accelerate completion? provide field auditors with a complete auditor tool kit to produce consistent workpapers, reduce expended time on cases, reduce errors and facilitate supervisory and taxpayer review of workpapers? ensure standardized workpapers with up-to-date tax law changes, across the Audit Division while affording auditors flexibility for unique taxpayer situations? provide for an end-to-end, integrated audit solution that will significantly increase efficiency and audit revenues? provide easy access, in either the office or the field, to all the audit workpapers and attachments via a single electronic case folder? Modern Compliance Management techniques, including leading-edge technology solutions, are required to maximize output from agency’s audit resources and produce the highest return on investment. Many states struggle with the choice of either designing their own software to address problems and improve efficiency or securing a developed, proven product. With the high cost of hiring, training and maintaining competent IT resources and the need to stay current with today’s technology, an in-house solution has become more difficult to build and maintain. Therefore, Audit Managers must ask: how can they implement needed technology enhancements within budget? how can they be sure the technology solution will work and the anticipated revenue will be realized?

RSI has the Solution RSI’s Audit Management practice line is dedicated to assisting audit managers, supervisors and auditors operate at maximum efficiency. RSI offers two software products, TaxMaster® and DiscoverTax® Audit Workbench, that work independently or together to provide an industry-leading integrated Audit Management solution for both the audit manager/supervisor and the auditor. These are proven products that have been implemented in 5 state Tax and Revenue agencies, as well as more than 26 local jurisdictions, comprising over 1,100 users. TaxMaster® is an audit laptop tool that supports and enhances the entire field audit process. Its features include: data gathering, detailed review of taxpayer data, recording audit decisions and computation of additional tax by auditors in stardardized workpapers and reporting. TaxMaster® stores taxpayer information from the agency tax system making it available to the auditor while in the field, eliminating the need to re-enter taxpayer demographics, filed returns and other data required for the audit case. DiscoverTax® Audit Workbench (AWB) provides centralized audit case management and tracking functions, via an electronic case folder, for each case. The folder is downloaded to a field auditor’s laptop and regularly synchronized to a central server repository for review by supervisors and managers. This feature includes the ability to download mainframe taxpayer information (header and specific tax and filing data) and compile and upload assessment information directly from the detailed audit workpapers, which then interfaces to the back-end tax processing system(s) for assessment issuance and collection. AWB provides access to all information needed by supervisors to effectively manage cases. TaxMaster® TaxMaster®, an application that can be easily installed onto a field auditor laptop, significantly improves audit efficiency and productivity by: providing all of the basic functions and features required by auditors; easily adapting to state (and local) taxes; and, continuous support and enhancement from knowledgeable staff who quickly make changes and updates as needed. Several states, including Alabama, Massachusetts, Nevada, South Carolina and Maine, as well as numerous local jurisdictions, comprising over 1,100 users, have already concluded that TaxMaster® is the right solution to meet their needs. TaxMaster® is an integrated suite of tools that enhance auditors’ capabilities, both in the field and in the office, by facilitating the efficient conduct and completion of audits in less time and with fewer errors. Built on proven technology, TaxMaster® supports auditors with a toolset that meets virtually every audit function for all tax types including sales, corporate income and personal income. Benefits of TaxMaster® include: time saving features for data entry and import; a standardized work papers library, with the ability to customize and streamline the recording and audit process; a standard presentation of audit results which facilitates review for supervisors and taxpayers; consistency and quality of audits; ease of configuration via system tables for tax rates and jurisdictions; and, a short learning curve which translates to quick adoption and immediate increases in auditor productivity. The TaxMaster® software: contains predefined letters and forms, and allows creation of customized letters; enables customized work sheets and schedules in the field to adapt to the particular audit situation; facilitates audit completion, across multiple tax types, with all data centrally located; imports taxpayer data into simple to use spreadsheets eliminating the time consuming task of separately keying in large amounts of data; provides statistical tools to calculate sample sizes and select random sets of transactions (optional add-on feature); provides links to, and imports of, audit resources such as policy, web-sites, legislation or user procedures; and, attaches critical external files to an audit such as spreadsheets, database files and text files. TaxMaster® stores information about each administered tax type, as well as reporting requirements, taxing jurisdictions and historical rate tables for state, county and locality during the initial setup. This allows the software to be easily configured to match any state, county or local tax structure. Ongoing changes, such as newly changed jurisdictions, tax rates and penalty and interest rates, can be easily made in one central location and distributed to all auditors. TaxMaster® is the leading state and local tax auditing software and used by city, county and state agencies for over 20 years. Recent deployments of TaxMaster® encompass more than 30 different state and local taxes, including sales and use, corporate income, local option, accommodations, admissions, individual income, solid waste tax and many more. Sampling Wizard for Statistical Audits RSI is continually improving and enhancing products through our partnerships with state Tax and Revenue agencies. A noteworthy example is the new TaxMaster® Sampling Wizard for Statistical Audits. This add-on to the base TaxMaster® software enables states, and their auditors in the field, to perform more sample-based audits by decentralizing the sampling function. Auditors can now perform their work with reduced reliance on the small group of experts in the central office. The Sampling Wizard allows auditors to connect to a variety of data sources for defining the sampling frame (defining the population), maintains a detailed log of each step of the sampling process including the random number seed, and automatically builds the projection schedule and the “pull” sample. This is all accomplished while simultaneously enabling the administrator to maintain control of the set of accepted parameters and thereby ensure consistency. The TaxMaster® Sampling Wizard is offered as an add-on to the base TaxMaster® package, and can be easily added on an individual basis. The TaxMaster® Sampling Wizard: provides a decentralized approach for statistical auditing. Auditors will not need to rely on a small group for audit assistance; allows the auditor to connect to a variety of data sources for defining the sampling frame (the filter used to define the population of data); maintains a detailed log of each step of the sampling process and all sampling parameters utilized to generate the sample. This includes the random number seed utilized to generate the sample, which allows for the precise original sample population to be regenerated at any point in the future; enables administrator control of all parameters of the sampling methodology; leads the auditor, step-by-step, through the sampling process using a “wizard” approach, based on the parameters set and maintained by the administrator. That parameter-set can be deployed to laptops automatically; allows users an easy and intuitive way of establishing the sampling frame, including checklists and drop down menus; provides a Random Number Generator; automatically builds the projection schedule based on the results of the auditor’s detailed validation of the sample population and applies the error back to the original population; automatically pulls the sample from the population into TaxMaster® for detailed review and mark-up; • allows the auditor to mark-up or record errors in TaxMaster® after the pull of information. No additional training or experience is required; builds the projections and evaluations; and, provides tools to do other types of sample-based audits including block sampling and non-stratified audits. States that have separate “Computer Audit” or “Statistical Audit” units that oversee and make decisions on statistical audits will be able to significantly reduce or eliminate the overhead of involving specialists. This not only includes the time of the specialist, but also the expense of traveling to the taxpayer site. Again, the Sampling Administrator will remain in control of the complete set of accepted parameters for statistical sampling to ensure that the agency’s sampling policies are consistently applied. DiscoverTax® Audit Workbench The DiscoverTax® Audit Workbench includes a robust set of case management functions and features for auditors and supervisors. The solution provides up-to-the-minute detailed status of all “in-progress” cases, based on a set of comprehensive case tracking and review features, as part of a fully electronic case folder. The case folder contains the complete contents of the case, including all workpapers, forms, adjustment schedules and taxpayer submitted records, either electronically provided or scanned. All case log entries, assessment details, approval history, correspondence, notes and other important audit files and document attachments are maintained in the case folder and can be reviewed online by those authorized to review the case during the course of the audit. Audit Workbench provides several collaboration and workflow utilities for managing work across what is often a disparate workforce, including electronic case assignment, messaging, approval rules and workflow management, appointment tracking and time recording. Audit Workbench supports the tracking and management of cases throughout the lifecycle including the following areas: access to critical dates, including case creation, assignment, appeal/reconsideration, last activity and statute of limitation; inventory reporting views for assigned/in-progress, unassigned and closed cases, and a “My Cases” view for each auditor; case assignment functionality; case status and progress; case contacts and appointments; messaging between audit team members and supervisors; audit scope (tax periods under audit); case plans and budgeting; case log (detailed log of auditor activities); correspondence generation; case attachments (spreadsheets, data files, scanned images, etc.); assessments; electronic approvals and approval delegations; tracking audit issues and auditor productivity; time and expense reporting; audit inventory and production reporting at different levels; case query support (structured and ad hoc reporting); and, integration with TaxMaster® for detailed audit workpapers and assessment information. With Audit Workbench, auditors can check-out and download assigned cases to their laptop to conduct field audit activities regardless of the network connection or location. Audit Workbench includes an automated data synchronization process for all cases, allowing auditors to refresh the case folder in the field and upload incremental progress to the central case repository for reviewing by supervisors and other auditors. Features and benefits of DiscoverTax® Audit Workbench include: centralization and standardization of case management for all audit cases – improves productivity and reduces errors; automated data synchronization between central office and the field – enhances case progress review and refresh of data; consistent documentation of audit process - improves quality of audit; inventory, productivity and management reporting of audits – better control of resources; and, single, secure electronic case folder – eliminates duplication of data and improves efficiency. DiscoverTax® Audit Workbench and TaxMaster® – An Integrated Audit Management Solution Together, the TaxMaster® and DiscoverTax® Audit Workbench software products represent a comprehensive and integrated end-to-end solution to audit workflow and process management. RSI recommends the implementation of both products as part of an overall Compliance Management integrated solution and a coordinated effort to improve the audit process - made possible through advanced productivity tools and consolidated electronic case management. Once audit cases have been assigned, auditors have the ability to check-out/download a case to their laptop and conduct their audit activities in the field using TaxMaster®, disconnected from the central network and server. This process replicates all available taxpayer data from the central server Audit Workbench database, to the laptop, including demographics, tax filing requirements, tax return data, and financial history. The breadth of data available to auditors upon checking out a case is limited only by the breadth of data stored in the central server Audit Workbench database from the Integrated Tax System (ITS) or Legacy systems. Auditors can then utilize the electronic taxpayer portfolio on their laptops to view this data, rather than relying on paper-based methods for conducting the audit in the field. Auditors record work progress in their laptop version of Audit Workbench, including their detail log of activities, taxpayer contact information, and all notices/correspondence. Each time an auditor connects to the central server, whether in the office or via secure VPN connection, the auditor will synchronize case changes to the central server providing an up to date view of the case to supervisors and other auditors. Regular synchronization of case changes in both directions supports a full electronic review as well as collaboration and approval of cases. TaxMaster® provides a rich suite of integrated productivity tools for auditors, and can be configured to pre-populate schedules and forms with available taxpayer data. The auditor can conduct a detailed review of taxpayer records in the field, determine the adjustments to tax accordingly and check-in/upload their final assessment records, notes and time & expense reports automatically to the Audit Workbench central server repository for supervisory review. A supervisor can then review the completed audit and make notes to the auditor within the electronic case folder. Once agreement has been reached between the auditor and supervisor, the entire case folder can subsequently be integrated with the back-end tax processing system(s) for final assessment, billing/notice issuance and collections. The Audit Workbench, integrated with TaxMaster®, provides the ability for auditors to maintain an entire electronic case folder that can be regularly synchronized to a central server repository for review by supervisors and managers. This includes compiling assessment information directly from the detailed audit workpapers for upload/interface to ITS or Legacy system for final assessment issuance. Audit Workbench enables tax agencies to reduce the size of and/or close their multi-state field offices. With a laptop, high speed internet access, printer and scanner, the auditor can now work completely virtual - with a full electronic case and communication with the central office and supervisors. Summary RSI’s Audit Management practice line is devoted to address the complexities that auditors and audit supervisors face to ensure that all audit resources are as productive as possible. TaxMaster® and DiscoverTax® Audit Workbench provide field auditors, desk auditors and supervisors with a powerful integrated suite of tools all designed to increase efficiency and productivity while at the same time empowering auditors to more effectively conduct field audits. Contact an RSI representative today at (888) 826-1541 to see how RSI’s Compliance Management products and services can help your audit staff. Or, download a free evaluation copy of TaxMaster® today.