The growth of robotic process automation (RPA) is a part of technological disruption and transformation of tax practices' and departments' internal processes, client services, and interactions with regulatory agencies. Organizations of all sizes can use RPA to streamline operations, increase efficiency, and improve quality as part of their automation strategy.
A Fourth Industrial Revolution (after the revolutions in water and steam power, electrical power, and electronics and information technology) is underway globally, a digital revolution characterized by converging technologies that are blurring the lines between the physical, digital, biological, and industry sector spheres, while at the same time transforming client and employee expectations and experiences. The increasing use of blockchain general ledgers, artificial intelligence (AI), machine learning, and cloud computing is changing the way tax functions and jurisdictions perform traditionally manually intensive activities such as accessing and manipulating source financial data for analysis, reporting, compliance, and improving controls. As an example, the United Kingdom in recent years launched its Making Tax Digital initiative, with a goal of fully digitizing the U.K. tax system by 2020 to substantially increase the efficiency and quality of tax administration.
RPA is a key technology in this digital disruption and transformation. According to Karen Osmundsen et al. ("Organizing Robotic Process Automation: Balancing Loose and Tight Coupling," paper, Hawaii International Conference on System Sciences, 2019), RPA enables the automation of repeatable business processes: A software bot can mimic human activities by performing recurring tasks and processes associated with structured data and clear action rules. According to a Gartner report, "[t]actically focused robotic process automation (RPA) projects may improve quality and decrease activity cycle times by assisting or removing labor in or from activities" ("Robotic Process Automation: 8 Guidelines for Effective Results," Gartner Inc., 2018, available at tinyurl.com/y4vd4pdb). With the use of AI and machine learning, RPA can enable more complex, intelligent process automation. These "bots" are increasingly playing an important role in automating routine processes and workarounds that otherwise would be inherently inefficient, time-consuming, and error-prone.
EXAMPLES OF TAX-RELATED APPLICATIONS IN PUBLIC ACCOUNTING