Governance and assurance in digital tax systems: How accountants can keep automated tax data reliable

The purpose of this thesis was to assess how to ensure good governance and reliable assurance of tax data produced and transmitted electronically through digital reporting systems. Automation of digital reporting systems as promoted by EU initiatives such as DRRs and ViDA, will result in reduced manual labor. However, they will also results in additional risk areas including system configuration, data quality and system integration. Through comparative document analysis and a structured literature review, this thesis reviewed academic research, OECD and EU frameworks, Finnish Tax Administration guidance, and corporate governance statements. The results of the study indicate that automation of tax reporting systems transfers the responsibility of ensuring tax reporting compliance from individual employees to systems. Therefore, for effective tax reporting, it is necessary to have clearly defined roles and responsibilities for all stakeholders involved in the process, as well as strong internal control procedures to ensure accurate and timely reporting. In addition, there should be built-in system checks to identify potential errors in the reporting process and ongoing monitoring to identify potential problems with the reporting process. This thesis concludes that assurance in automated reporting systems should focus on whether the system has been configured correctly, the integrity of the data input into the system, and whether or not the system produces accurate reports. Accountants must continue to be critical in providing assurance over automated tax reporting systems. Their role evolves to include supervising digital reporting processes, identifying potential risks associated with automated reporting and working with IT professionals to ensure the accuracy and reliability of automated tax data.