If identifying risks doesn’t come easily, you might want to assess these factors.
How to ensure all of your tax risk is captured
Tax risk generally surfaces as a result of a few or a combination of these broad reaching factors. Review these factors below to help assess your risk level.
Application or interpretation of tax laws
If your team hasn’t accurately applied tax rules to your business, or has misinterpreted current tax rules, your tax risk will be higher than it should be.
Lack of completeness in underlying facts
Failing to fully investigate facts as they relate to accounting and tax matters means tax strategies are formed based on inferior information.
Accounting information is incomplete (insufficient or inaccurate)
Tax risk will obviously escalate if the accounting information required to properly complete files is missing, erroneous or late.
Inexperience or insufficient staffing for workload
Overworked accounting staff or inexperienced team members will make mistakes that can skew your tax information, and increase your overall business tax risk.
By working with tax experts skilled at identifying these and other tax risk factors, you can significantly reduce your company’s exposure to possible tax-related problems.
If you are interested in obtaining help in this important area of tax risk management, contact Claret Partners anytime. We go about ensuring tax risks are captured using our CPL Tax Compass. The CPL Tax Compass is a way to understand the potential risk components. We take you through four main areas of risk, which are governance, compliance, financial accounting, and people and resources.
(With excerpts from the book, Tax Risk in the 21st Century: How to Manage Tax Risk like a Big Company Without the Big Expense by Ana Sainz, Claret Partners)
Discover the Claret Partners Advantage
No matter what your business or the size, tax departments have a significant responsibility – to deliver efficient, credible tax provisions, reporting and compliance. Achieving this goal requires your data, technology, people and process be effectively integrated.
To discuss your tax provision needs, please call 416-406-3337 or contact us to request more information.