Let me break it down for you what a tax accountant or tax consultant's typical tasks are. I will focus on the roles of New Associates who are just starting out at the firm (stay tuned for my next post of tasks of a Senior Associate). I will be referring to my own experience from working at a Big 4 Accounting firm for the past 7 years, as well as working with New Associates on a daily basis.
After graduating from university and going through recruit, I landed a position at a Big 4 accounting firm. I worked towards my CPA designation for the next 2.5 years as I worked as a New Associate.
I was in L&D (Learning & Development) training for two weeks, which was hosted by the firm. Topics ranged from basic admin (ie. filling out your timesheet), how to use the firm's technology, technical tax courses, ethics, as well as procedures and processes in place to efficiently manage projects. Getting used to everything took a few months to adjust to and people were generally very understanding. Outside of university, I had realized the workplace was much more than just applying "theory." There are so many more aspects of working than just solving tax problems.
One of the most important tasks of a New Associate are the admin work that Senior Associates and Managers will rely on you for. Yes, it's not very glamorous and to be honest, it's not my favourite thing in the entire world, but it's important. The following admin work keeps the firm compliant and prepared in case of any potential lawsuits:
Filing emails into a data management system - You can imagine the countless emails that get sent each day. While not all of them are important, the ones where a client confirms something or provides relevant information or anything that requires a record to be kept as supporting documents need to be filed away so you, your team, the firm can reference it later when memory alone is not reliable.
Filing supporting workpapers - when clients provide their workpapers so you and your team can get started on a certain project, those workpapers also need to be filed away according to specific naming conventions so anyone in your team can easily find the document they are looking for.
Preparing engagement letters - Before any work is started on a client, an engagement letter needs to be sent to the client. While there is a template to be followed, it is usually the New Associates responsibility to draft up the first version for review.
Checking independence of a Client - If you work for a big firm, there are lots of large clients that require both audit and tax work. In order for the firm to stay compliant, they are required to not have any conflict of interests when performing multiple types of work for one client (ie. a Fortune 500 client that may require audit, tax, consulting, advisory, etc work from a Big 4 Accounting Firm). It is usually the New Associates who makes sure that all necessary admin work and processes are taken care of when getting a Client's work approved from different service lines.
Understanding the Firm's Process - Big firms are changing their processes multiple times a year as they try to keep up with technology and make processes more efficient. The New Associate will be heavily relied on to understand what the updated processes (ie. how to set up a job code, how to send a tax return to be prepared, etc.)
If you just started out at the firm, the main and most fundamental work you will have is preparing tax returns for clients. Let me walk you through how a New Associate may be involved in the tax compliance process.
Before starting the actual tax return preparation process, you may be asked to draft up the information request list for the client. This consists of information needed from the client in order to prepare the tax return on their behalf. Every client is different so the information request can be tailored to the specific client. Sometimes there is already a information request filed away in prior year's file you can rollforward (ie update for the current year) or this process can be automated by sending an online request to the client. The information request will then be reviewed by the Senior Asscoiate/Manager, and then sent to the client.
The client will then send certain confirmations and supporting workpapers. Depending on the size of the client, workpapers can range from a dozen to a few dozen. Each workpaper received can be relatively simple with a few tabs, to massive workpapers that take forever to load and with 30 tabs. As mentioned above, the New Associate will file away the relevant client emails and supporting workpapers away. Now, it's time to get started on the actual tax return preparation process.
Tax Return Preparation
Back 7 years ago when I first started, the New Associates had prepared the tax returns from scratch. Of course, I didn't know what I was doing and mainly referred to prior year files and copying exactly what was done by just updating it with current year numbers. Getting to know the flow of the tax return preparation software and understanding the tax adjustments took some time getting used to.
I realized that what you learned in university consists of very simple examples with round numbers that's easy to understand. However, in the real world, clients are all very different and it takes some time getting to know the client's background, unique workpapers, tax specific concepts to their industry, etc, aside from just the tax concepts. Now, a lot of the tax return preparation gets outsourced to India and the New Associates are the first reviewer.
There are both advantages and disadvantages to this. The advantage is that that your time is better spent looking at a tax return from a big picture perspective compared to getting sucked into the details of the numbers if you were to prepare it yourself. The mundane tasks of reconciliating numbers and referencing a workpaper can be outsourced, whereas you can focus on the technical aspects of the tax return that may not be easily picked up by the team in India. You would update the return for any mistakes you find and then send it for 2nd review to your Senior Associate.
The disadvantage is that there will be a higher expectation of you to bring a more polished tax return to your Senior since you had more time as a reviewer to pick up issues. Also, while preparing a tax return from scratch can be time consuming and mundane at times, I always thought it that a good skill to first develop your foundation in tax because you really get familiarized with the tax program and how the numbers flow to different schedules.
Side comment - From a firm perspective, they are always finding ways to make processes efficient and to save costs wherever they can to stay competitive. As technologies develop, work that can be automated such as compliance work (ie. prepartion of tax returns) is taking less of a tax accountants' time. Instead, more lucrative work such as tax consulting and helping a client navigate complex tax issues seem to be the direction that firms are moving towards, which means more interesting and value added work for you!
After preparing the tax return, you send it to the Senior Associate for review. They will take another look through the tax returns, and provide you with Review Notes on items they picked up to be incorrect or required further confirmation from the client. This goes two ways:
You can clear the review notes by updating the returns based on the Senior's comments. This is always a really good learning opportunity for you so you can avoid making the same mistakes in the future and to slowly build on your technical tax skills.
An email to the client needs to be drafted to confirm certain missing information that came up during the review process.
This step may go back and forth a few times until the Senior Associate is happy with the tax return and moves it to the Manager/Senior Manager for review. Eventually, the Partner will have a quick look (very high level) and then approve the tax return to be sent to the client. If the client is satisfied with it, the tax returns will be filed!
The first one to two years will be spent shadowing your Seniors, and seeing how they carry on their duties so you can learn from them. Some of the shadowing activities are:
You will be asked to join team meetings, review meetings with Partners, meetings with clients, etc. No need to get nervous as you will most likely be asked to do anything other than to simply learn from how your Senior may manage the file and ask questions to the Manager, how the Manager clears Review Notes with the Partner, or how the Manager engages with the client.
By attending these meetings, or asking to attend these meetings, you will learn what the expectations are as you move up in the firm and how to effectively manage a file from learning from those who have more experience.
Building Client Relationship Skills
While you may not be in the front lines of engaging with the client, you may be helping your Seniors by drafting the initial communication. For example, if you had been assisting with tax return preparation and there are outstanding questions that need to be confirmed with the client, you may be asked to draft the email. Your Senior will edit your email to fine tune wording, clarify points, etc and then send it out to the client themselves. This is good practice for you to develop your professional communication skills with clients.
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