A Madison-based CEO presides over a large regional sporting goods company, Bucky Corporation, that is doing extremely well. She’s still fairly new in her role at this company, though, and has some trepidation about her lack of accounting background and because of an audit by the IRS at her previous company. She’d like to meet with you, the staff accountant, to review a few things with which she’d like your help.
The above scenario is a fictional one—an intentionally designed case study—but it’s not too far afield from what Wisconsin School of Business accounting students might face once they’re out in the real world, working with their own corporate clients as tax professionals.
Created to build data analytics skills in the tax planning process, the Bucky Company case was developed by Stacie Laplante, James L. Henderson Professor and an associate professor of accounting and information systems, and Mary Vernon (PhD ’21), a WSB doctoral student in accounting and information systems. It was designed to be incorporated into a master’s level class for fourth and fifth year accounting students.
Data analytics skills are in high demand, Laplante says, and the idea for the case grew in part from frequent employer requests that students come in with greater data analytics experience. Laplante recognized the importance of these skills, but also the difficulty in adding new coursework to master’s tax students’ already full schedules.
“We thought, how do we start incorporating some of what our students will see out in the real world into our class without losing all the technical aspects that we still have to cover?” Laplante says.
With Vernon’s help, they created a survey and gathered data from tax professionals on everything from the kind of topics that should be covered to best platforms to use. Later, they looked at the literature on corporate tax cases, and realized that not a lot exists. They co-authored a paper that contributes to the literature, setting out the parameters of their case study and the specific learning objectives for students. The paper was accepted for publication in Issues in Accounting Education.
Learning to work with the data
The case requires that students familiarize themselves with two distinct platforms: Excel for technical tax problems and tax workpapers (the client documents the preparer pulls together), and Tableau, a newer tool that allows for data interpretation and visualization.
Working through the case helps strengthen six specific skills: technical tax skills, data manipulation, data visualization, data interpretation, critical thinking, and written communication. Given how closely tax preparers work with their clients—and confidential information—the focus on communication skills is not surprising.
As Laplante and Vernon note in their paper, tax planning is both a forward-looking task as well as one of hindsight analysis. Students must be able to examine the client’s overall financial history and make recommendations. They’re often working with large amounts of data that must be interpreted and visualized.
Both Laplante and Vernon say they were impressed with many of the students’ data visualizations done in Tableau. “Some students are so amazingly good at the way they analyze the data and then present it and explain it,” Laplante says. “When that happens, it’s always nice to see.”
“Communication, both written and verbal, is critical,” Laplante says. “You need to be able to communicate verbally to let the client know exactly what you need and why you need it. You can’t expect the client to know about tax law; you have to get the right information.”
Learning to make data-based decisions
One of the benefits of the case is that it forces students to perform the professional judgment calls they would need to make with a tax client in real life.
“The nature of accounting draws students who like things that work, that balance, because our debits always have to equal our credits,” Laplante says. “In their mind, it’s pretty black and white. But once they get into the tax area, there’s lots of gray. So students struggle with not being able to say ‘this is the absolute right answer.’ Having to take the data and decide on their own how to best present it, how to interpret it—they have to deal with that unknown of what’s right or what’s wrong.”
Vernon agrees that sometimes it’s about giving students that gentle push to “get a little comfortable with the uncomfortable.”
Tax preparers also must function with some degree of risk, Vernon says, and they’re getting it from “both sides of the spectrum.”
“There’s a risk from the IRS side that maybe you did something wrong or there’s something they will not like, but there’s also a risk related to the client that perhaps you’re not taking advantage of all of the tax planning that you could be taking advantage of and you’re therefore leaving some opportunity on the table for that client.”
Laplante says it’s rewarding not only to see students clear these hurdles, but to hear from them after their summer internship. “They often send me an email a year later to say they got to the internship with some exposure and knowledge in hand so they felt more prepared than they would have otherwise.”
With several semesters under their belt, Laplante says she and Vernon have discussed whether they can now iterate on what they’ve created.
“The underlying idea is really that data analytics can be used for different things like descriptive work, predictive work, and prescriptive work. In this case study, we’re looking at the very basic descriptive level, the most basic level of data analytics. We’d love to take the other two elements and build them into a tax class at the level of this one. I think that’s one thing we’d definitely like to pursue in the future.”
Read the paper: “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” forthcoming in Issues in Accounting Education
Stacie Laplante is the James L. Henderson Professor and an associate professor in the Department of Accounting and Information Systems at the Wisconsin School of Business.
Mary Vernon is a doctoral student in the Department of Accounting and Information Systems at the Wisconsin School of Business.