Tech mahindra
Tech mahindra

Audit, Accounting & Tax

Professional Services Process Elements

Audit, Accounting and Tax services leverage “Information” from Regulators, “Execute” audit process by applying “Expertise” of understanding of rules set by regulators and providing independent “Verification” reports and tax filing forms.

Core Challenges in Audit, Accounting and Tax

  • Legacy Business Model and Outdated Business Practices
  • People Heavy Business
  • Rapidly Changing Regulations in complex Global Economy
  • Required Function for Corporate as opposed to “Want to do” Function
  • Low Level of Trust among Public and Regulators
  • Platform, Technology Players challenging Traditional models
  • All of the above challenges, leading to slower growth and lower profit margins

Benefits of Digitizing the Core Functions

Increase Trust and Transparency in the process
Meet changing demands of Regulators
Technology/Platform Led Delivery model to stay relevant and not be disrupted
New/Different Service Offerings to meet Changing regulations in complex

TechM Point of View

Following are the areas where technology can change the outdated business practices:

In current model, a sample of client’s data or financial transactions is used for Audit. Percentage of this information is used as sample, mostly <20%. The final output is an “Audit Opinion”.

Leveraging Artificial Intelligence and Machine Learning, it’s now possible to Audit “All Financial Transactions” as opposed to sampling, increasing the overall quality of the audit and increasing trust and transparency among Regulators and Public. With Drone Technology, it’s now easier to verify and audit “Physical Assets” of organizations easily and in real-time.

With Advanced Data Analytics (and Machine Learning), data from previous audits can be used to find anomalies in financial transactions and make audit a continuous process as opposed to half-yearly or yearly process. This can enable real-time audit as required by Regulators. In coming years, more of the financial transactions will be recorded in Blockchain (including Crypto and FIAT transactions).

In today’s world, Fin/Reg-Tech startups provide platform-led services in addition to embedding technology (e.g. AI/ML, Drones) to the process. Providers like Thomson Reuters, Wolters Kluver, ADP, Bloomberg and HRBlock are providing tax services disrupting traditional models and players. Bloomberg provides details of all changing regulations as real-time information. Thomson Reuters provides platform for Tax calculation and filing while Wolters Kluver, with the acquisition of CCH, provides tax filing services to long tail of countries. Traditional tax consulting firms (Big 4) need to redefine the models to build and provide end to end, platform based tax solutions.

It is important to expose these platforms to clients for easier integration of data, transactions and provide real-time view of the process. This means, it is important to automate most the steps (as many as 2000) in an audit process.

Newer Service Offerings are required to meet the changing regulations as well as the changing global landscape. Some of the evolving needs are:

  • R&D Tax – With R&D credits being extended for innovation by governments, it is important for enterprises to take maximum credit. Governments would like to know the validity of the programs and realized benefits. Other such programs include Energy Credits for being Green.
  • Tax is mostly an afterthought and seen as a separate activity during end of the year. It’s not integrated with financial transactions. As regulators demand more-frequent payment of Taxes, it’s important to calculate Taxes near real-time.
  • Adjacent markets are lucrative, especially Travel and Immigration Services in global mobility where the services overlaps with Advisory
  • In all of the scenarios above, Technology plays a vital role. Higher order automation using AI/ML can increase the accuracy and near real-time calculation and reporting of Taxes.

Adding More Value to our solutions

In addition to core audit, technology platform driven solutions can be implemented for:

1. IFRS 16 (Revenue Recognition and Leases)
Platforms can be exposed to clients where they ingest the contracts. ML algorithm can classify the clauses and generate the “allowed” amortization.

2. eDiscovery
Pattern Recognition to identify “evidence” among vast electronically stored information can be implemented using ML algorithms. We also offer Cloud/Solution for end-to-end EDRM process leveraging suite of technologies.

TechM Service Offerings for Audit, Accounting and Tax

  • IFRS 16 customization and integration
  • IFRS 16 Compliance - Data Extraction, Classification, Processing and Reporting of Lease Components
  • Cloud Migration of eDiscovery Files/Cases
  • Integration with TR product Suite
  • Extreme Automation and Straight Through Processing leveraging RPA, AI/ML
  • Tax Calculations in ERP Product Suite
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For further information please write to connect@techmahindra.com

For further information please write to connect@techmahindra.com