News that will impact your business
Market alertsOctober-December | 2017
More innovation and intelligence for Tax
In order to increase competitiveness and efficiency, the organizations’ tax area starts to increasingly invest in new technologies, including robotization
The companies’ tax areas have faced a series of changes in recent years. Most of them derive from the increase in the use of technology in business, in addition to issues relating to high competitiveness and more stringent regulations, in a business environment increasingly globalized.
From this, the role of the tax professional evolves together with the market itself. With the change of focus to technology, the profile of the people who work in the area also reinvents itself.
To ensure that the tax experts can focus on other tasks, which require a more strategic look, robotization is a technological trend that helps these professionals in tasks that are repetitive and based on standards.
The use of a robot (software) to reconcile information among accessory obligations is an example. Thus, the scope, assertiveness and speed in reconciling information allows the professional to invest time only in exceptions. Thus, the automation process significantly influences issues such as efficiency in obtaining data, a lower rate of errors and, consequently, reduction of costs.
Increasing productivity and efficiency in the organization's tax area depends directly on the increasingly intensive use of technology, assertiveness in the application of tax rules and review of internal processes., Gustavo Rotta, Deloitte Tax partner in Brazil.
Behavioral economics and its implications
The Nobel Prize in Economics in 2017 was given to the North American who countered the traditional economic behavior theories
While the main economic theories of the 20th century assumed that people behaved rationally in their decisions, Richard H. Thaler, a professor at the University of Chicago, in the United States, ventured to go in the opposite direction. Humans, according to him, are irrational in relation to economic behavior, but, even so, adopt a consistent pattern.
For his contribution and pioneering work in this branch of research, the American professor was awarded the Nobel Prize in Economics. For the Nobel Committee, Thaler’s theory explains how financial decisions are simplified by people who end up focusing on the limited consequence of each choice and not on its more general effect.
As a consequence, studies indicate that public policies are directly influenced by the so-called “behavioral economics”. Richard H. Thaler was born in 1945 in East Orange, New Jersey (USA), and works at the University of Chicago Booth School of Business.
This new model of thought is useful to understand not only the impact of behavior in economic policies, but it is also important for organizations to understand the extent of their business strategies. Certainly, the theme will instigate more researches and a greater perception of how consumers, companies and regulators behave in response to various types of stimuli., Ira Kalish, Deloitte's chief global economist.
Governance in the government-owned companies
Among the points of the so-called “Government-owned Companies Law” is the requirement that companies adopt risk management and internal control rules and practices.
The Government-owned Companies Coordination and Governance Secretariat (Sest), of the Ministry of Planning, Development and Management, released in early November, the Governance Index. The instrument measures the management maturity of federal government-owned companies under direct control of the Government and includes criteria such as management and control, transparency and information, as well as the operation of governance departments in the company.
The index, which will have evaluation cycles every three months, is linked to the Government-owned Companies Governance Law and to the establishment of new policies, procedures and best practices in these companies.
The new regulation establishes governance and bidding aspects on the federal government-owned companies, with specific rules for smaller organizations and greater detail of transparency and governance mechanisms and structures.
The deadline for compliance with the new regulations is June 2018.
Government-owned companies are facing a big change, which should lead to greater transparency of their operating and financial information and also a better established governance., Paulo Vitale, Deloitte Risk Advisory partner in Brazil.
Cyber security for financial institutions under discussion
Proposal for regulation draws attention to a preventive and more robust approach about the topic
The Central Bank of Brazil, between the months of September and November 2017, submitted for public hearing a proposal for resolution on cyber security applied to the financial sector. In this way, the institution seeks to encourage financial organizations to implement cyber security policies, including processes, controls and robust technologies for dealing with all types of external influences, such as cyberattacks.
In this context, the definition of a director responsible for the cyber security policy, as is the case with the CISO (Chief Information Security Officer) and incidents management, how to establish an action and response plan to cyber incidents, including communication of incidents that are relevant to the Central Bank, are extremely important for organizations to adapt to the propositions.
Moreover, companies should also look at another point of the proposal: the hiring of data processing and cloud storage services. The institution must observe the safety standards to ensure the confidentiality, integrity and availability of data. In addition, the Central Bank’s proposal prohibits the hiring of relevant processing, data storage and cloud computing services abroad.
From the publication of this regulation, based on feedback received in the public hearing period, all organizations of the sector will have 180 days to adapt to the changes, which can be audited by both the Central Bank and by the companies’ internal audit area.
The financial organizations, especially those of smaller size, have a great challenge ahead to adapt to the new proposal for cyber security regulation. It is essential to quickly assess what are the gaps in relation to the resolution, structure an action plan and perform these activities in the coming months., Eder de Abreu, Deloitte Cyber Risk Services director.