Campus to clients: technology for tax compliance.

• Author: Nellen, Annette

No DOUBT, TODAY'S COLLEGE STUDENTS enjoy using technology and usually bring some of their favorite devices--e.g., iPhones and iPads--to class. They also enjoy using social media such as Facebook, Twitter, and Reddit. And, in addition to their studies, students find time to send text messages to friends and family.

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Students majoring in accounting, though, likely have not given a lot of thought to how technology is used by CPA firms and in completing audit engagements and tax returns. This missing connection provides a rich opportunity for further engaging accounting students in the study of taxation--by having them investigate uses of technology in tax compliance and some of the concerns that can be associated with those uses.

This column suggests ideas for helping tax students learn about technology used in the accounting profession, as well as some of the ethical concerns raised by its use. The AICPA's 2013 North America Top Technology Initiatives survey results, summarized in this column, are a helpful and readily available resource for identifying types of technology issues to analyze.

Top Technology Priorities

Since 1990, the AICPA has conducted surveys of accounting professionals to identify the top 10 technology issues for the year. (Links to surveys conducted from 2001 to 2012 are available at tinyurl.com/l9nsbhj.) The 2013 survey (available at tinyurl.com/czq4dac) involved more than 1,600 AICPA members and more than 200 respondents from the Chartered Professional Accountants of Canada. The mix of respondents included CPAs from firms, industry, government, and not-for-profit organizations. The survey also asked questions about member concerns about technology and information management.

The top 10 technology priorities of U.S. respondents for 2013, in order of importance, were:

1. Managing and retaining data;

2. Securing the information technology (IT) environment;

3. Managing IT risk and compliance;

4. Ensuring privacy;

5. Managing system implementations;

6. Preventing and responding to computer fraud;

7. Enabling decision support and analytics;

8. Governing and managing IT investment and spending;

9. Leveraging emerging technologies; and

10. Managing vendors and service providers.

Canadian respondents identified the same top 10 priorities, ranking them slightly differently but with the top two the same as for U.S. respondents.

Incorporating Technology Into the Tax Curriculum

Appropriate use of technology saves time and can increase accuracy. Thus, it is necessary in properly providing tax services to clients. Software can keep track of carryforward items (such as net operating losses), perform complex calculations, and store many years of tax rules to ensure that tax returns are prepared correctly. For example, consider the changes to Sec. 1202 (partially excluding gain from certain small business stock) by the American Recovery and Reinvestment Act of 2009, P.L. 111-5, and two subsequent acts. Software programmed with the gain exclusion percentage applicable to different periods is crucial to...