Findings are the Loctax method to keep track of the details of a risk or audit. They serve as a systematic approach to recording observations and potential risk factors.

Findings and findings assessments capture the current status and also allow you to monitor the evolution of a finding over time. These can shed light on the effectiveness of implemented controls and strategies, and help in making necessary adjustments to mitigate the risk effectively.

An audit or risk is composed of one or more findings, which can often be quantified. On a finding level, the following details can be captured:

In an audit context, findings may include all items mentioned by tax inspectors. For instance, a separate finding could be created for each point raised during the audit.

For risks, findings may encompass all elements that need consideration when quantifying the risk. Utilizing findings enables you to highlight all points requiring attention. For example, you could create a separate finding for each year under consideration. This allows for individual management of the impact for each year.

A finding assessment is a snapshot of the quantification of a finding at a specific moment in time.

We don’t only need to document the findings but also capture the quantification of these findings. Risks and audits can evolve. You might want to close one finding but keep the others. The finding itself might change because you negotiated with the tax inspector or because you were able to prove that the position taken was indeed correct. Maybe a court case confirmed a position taken and heavily reduced a risk.

To allow you to track the evolution of your findings, we introduce the concept of assessments. Each finding can consist of multiple assessments.

The assessment is the analysis of a specific finding with a date stamp. This will help everyone to understand how the findings have changed over time and why that was indeed the case. When dealing with risk and audits, it's crucial to be able to document your whole process and the calculations that support the figures.

On a finding assessment level, the following details can be captured:

Now that we know how findings and assessments work. Let's have a look at how the total exposure is calculated.

As mentioned earlier, each assessment has a date stamp. Note that a finding assessment can be open or closed. Additionally, we remember that each finding can have multiple assessments.

When calculating the total exposure, we'll sum up the most recent finding assessments of each finding. However, we'll only include a finding if its most recent assessment is still open. If it's not, we'll exclude that finding.