Incorporating Data Analytics in a Technical Tax Setting: A Case Using Excel and Tableau to Examine a Firm's Schedule M-3 and Tax Risk

Abstract

ABSTRACT New tax accountants are expected to possess strong technical tax and data analytic skills. This case provides an opportunity to improve students' corporate tax and accounting for income taxes knowledge and experience with professional tax workpapers. It also provides exposure to two powerful data analytic platforms, Tableau and Excel. Students must complete a set of tax workpapers, including a Schedule M-3 reconciliation. Students begin to view tax through an analytical mindset, gaining familiarity with descriptive data for tax analyses. This case helps students calculate GAAP and cash effective tax rates, taxable income, temporary and permanent book-tax differences, and formulate a professional written communication. Students also complete tax workpapers; benchmark tax data across time and industry peers; clean, format, and combine data using Excel and Tableau; analyze and visualize data using Tableau; and access and use the IRS's SOI database. JEL Classification: H29; D89; A22; A23.