Inefficiency of Ernst & Young in Processing Personal Tax Returns
INTRODUCTION The purpose of this memorandum is to illustrate the reason behind the inefficiency of Ernst & Young when filing personal tax returns. In addition to a process map indicating the process that the staff is required to go through and time each process takes, discussion on how such process can be reengineered will follow. Finally, under the assumption that the concurrent technological support is available, an analysis on the cost and benefits of new information technology will be provided.
EVALUATION OF PROCESS Although Ernst &Young believes that extra checks in the office to prepare personal tax returns build a key competitive advantage, the process in which it takes to generate one personal tax return may be excessively repetitive and time-consuming. As seen in Exhibit 1, the process map showing tasks performed to prepare personal tax returns includes six decision points, of which two are inevitable due to client’s missing information. The high number of decision points force as many cycles in the preparation of personal tax returns, thus allowing no further progress if a specific standard is not met. Besides the time it requires to complete the task itself, one may also observe from Exhibit 4 that much time has been unnecessarily wasted during the transference of files. Without personnel that can effectively deliver files to destinations, the lower level employees such as the preparers are burdened with excessive and trivial administrative work. This phenomenon further decreases work productivity as employees are distracted from work and remain idle while waiting to use necessary equipment such as hole punches or heavy duty staplers. According to Exhibit 2, which calculates the total time of delay from the London Office’s work process (in terms of days for the purpose of materiality), as many as twelve days is required for a personal tax return to be completed, while only ten and fourteen days are available for the staff to work on the job
EVALUATION OF PROCESS Although Ernst &Young believes that extra checks in the office to prepare personal tax returns build a key competitive advantage, the process in which it takes to generate one personal tax return may be excessively repetitive and time-consuming. As seen in Exhibit 1, the process map showing tasks performed to prepare personal tax returns includes six decision points, of which two are inevitable due to client’s missing information. The high number of decision points force as many cycles in the preparation of personal tax returns, thus allowing no further progress if a specific standard is not met. Besides the time it requires to complete the task itself, one may also observe from Exhibit 4 that much time has been unnecessarily wasted during the transference of files. Without personnel that can effectively deliver files to destinations, the lower level employees such as the preparers are burdened with excessive and trivial administrative work. This phenomenon further decreases work productivity as employees are distracted from work and remain idle while waiting to use necessary equipment such as hole punches or heavy duty staplers. According to Exhibit 2, which calculates the total time of delay from the London Office’s work process (in terms of days for the purpose of materiality), as many as twelve days is required for a personal tax return to be completed, while only ten and fourteen days are available for the staff to work on the job