Final report

Institution:

PriceWaterhouse Copper (PWC)

( Practical Study PwC )

Internship adviser

Ali Jawad

Advisor: Munner

Name: Manal Alsabti

ID#: 200801150

Accounting major

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Summer internship, 2012

Executive summery

Pricewaterhouse cooper, (PwC) is a privet professional company that provide service to other

companies such as audit assurance, Tax, consulting, and family business service that help them

with complex financial accounting issues related to matters such as valuations, pensions and share

plans, to enhance their ability to build value. It is one of the big 4 accounting firm in the world.

PwC is the fastest growing professional services firm in the Middle East region with the market

leading tax advisory, audit and assurance practice. It is an international company that has

branches across 158 countries in the world with close to 169,000 people.

The internship period that lasted for 9 weeks, from 16 June until 15 August, it was a very

important learning period and well utilized with a lot of projects being applied and undertaken.

During the first week of the internship, the interns were introduced to dress code of the company,

their way of dealing with client and the type of service they provide, and about DZIT (department

of zakat and income tax) that we prepare the tax return for them , the intern received the laptop

with personal email and a profile in PwC website to communicate with other employee’s in other

branch around the world. The interne was working in Tax/Zakat department, so in the first two

weeks and learned from co- worker, basis concept about new Tax law and Tax/ zakat computation

Tax return, Withholding tax (WHT), and saw samples of quires for Department of Zakat and

income Tax (DZIT), and response letter from PwC for requests, and prepared some of them in

further weeks. And done some online courses about how to act professional, the important of

confidentiality in accounting firms, and some basic about Aura program for auditing.

Although the intern was assigned in the contract in Assurance, audit department, but it was a

dead season for auditing, so she worked mostly in Tax/Zakat department because they have

pressure and work all the year, so she helped them and learned from them as well.

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In the second week the interns became more confident and used to her new responsibility, and

know everyone in the office, and know who to learn from. And asked co-worker for more

explanation about the firm process and challenging that helped in preparing this report. And read

law manuals in the office.

In the following f weeks the intern experience and prepared many Tax/ Zakat return Translation,

letters to DZIT for requests of exemption zakat payment on behalf of client, and analysis

Assessment for DZIT to compare it with PwC computation to figure out the different which

helped to understand which items are included in the Zakat bases. Also experience dealing with a

Chinese client, and preparing quires reports, Translation for field inspection, and withholding tax

for June, July for this company. Also did cross footing reference for financial statements from

auditing department. These tasks will be explained more in this report. With the major project that

was done, preparing Zakat return, during the internship.

Acknowledgment

Without the support and assistant from the Assistant manager Hatim Nairoukh, ,my co-

worker, this internship programme would not have been a success or learning. Special thanks also

go to the management of Pricewaterhouse Cooper for accepting my request to join their company

for internship and giving me this great opportunity to learn and perform important tasks and

treating me like a real employee. For all those that are not mentioned in this work but did have a

great impact on my learning, please feel appreciated and know that your contribution to the

success of the internship is highly recognized

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TABLE OF CONTENTS

Title page……………………………………………………………………………1

Executive summary…………………………………………………………………2

Acknowledgements…………………………………………………………………3

Introduction…………………………………………………………………………5

Company background……………………………………………………………….5

Tax & Zakat law in KSA………………………………………………… ………..9

SWOT analysis……………………………………………………………………..10

Marketing strategies………………………………………………………………...14

Organization competitive strategies………………………………………………...15

Job history...................................................................................................................17

Conceptual framework................................................................................................18

Technical part.............................................................................................................22

Evaluation of the internship experience......................................................................24

Summary of fining and recommendation……………………………………………24

Conclusion……………………………………………………………………………25

References……………………………………………………………………………26

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INTRODUCTION

Global payroll and tax compliance services can make tax compliance easier. These tax

compliance services understand the diverse taxation systems in different countries and offer the

best solutions in filing tax returns quickly and with zero hassle for the enterprise.

Internship is an integral part of a student degree, to practice the concept and knowledge he

learned in college, to test their aptitude for a particular career before they commit to a real job. It

assists the learner to attain hands on experience on his particular area of interest. This internship

was done in auditing company, PriceWaterhouse Cooper (PwC) in Al kohbar, although it was

assigned the contract in Assurance department, they didn’t have much work to give me because

it’s a dead season for auditing, so the intern worked mostly in Tax/Zakat department because

they have pressure and work during the year so the intern helped them and learned from them

about the Tax/ Zakat industry and assurance, auditing as well.

With the help of Assistant manager Hatim Naioukh Assistant manager of PwC and other co-

worker The intern was able to learn from all the reports, financial statements that the company

prepares and dealing with clients as well, and the challenges, strengths, weaknesses, pressure and

opportunities that the company has. PwC is the fastest growing professional services firm in the

Middle East region with the market leading tax advisory practice, audit & assurance and

consulting, with 2,500 people in offices covering 13 territories.

COMPANY BACKGROUND

Founding

By the increasingly complex and sophisticated needs of businesses during the early 19th-

century Industrial Revolution so accounting practices were necessary. The partnership was

created in 1998 from the merger of two Big Six accounting firms: Price Waterhouse and Coopers

& Lybrand.

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It started in a small accounting practice in 1849 by Samuel Lowell Price. Price was joined by

Edwin Waterhouse in 1865. The company took the name Price, Waterhouse and Company in

1874. The company opened its first branch in the United States in 1890.

William M. Lybrand, brothers T. Edward Ross and Adam A. Ross, and Robert H in 1898 they

opened a two-room, two-desk business in Philadelphia, from the beginning they had a reputation

for high professional standards. Today it is one of the Big 4 auditing and accounting firms

worldwide.(Press, J 1999).

PwC has established in Al Khobar in 1979, PricewaterhouseCoopers has offices in the three

principal business centers of the Kingdom of Saudi Arabia (KSA): Al Khobar/Dammam, Jeddah

and Riyadh. With around 500 personnel based in Saudi working closely with around 2,500 PwC

professionals throughout the Middle East

Nature on the company and type of service

PwC is a company that provide professional service for both public and private clients such as

Auditing accounts, Tax Advisory, international tax planning and compliance with local tax laws,

customs, consulting, business recovery, and transfer pricing, and Tax/ Zakat service Assurance,

auditing., advisory

It is a global company that has 771 cities across 158 countries in the world with close to 169,000

people.

“PwC provides research and consulting services to many industries, and publishes a number of

reports on related issues. Some reports are industry snapshots, while others focus on M&A within

these industries. The clients of PwC member firms around the world range from the largest

organisations to smaller entrepreneurs”. They also provide professional periodical about their

forecasting about GDP and new programs to serve clients, new network. (PwC, Insidebuzz n.d.).

In tax/ zakat department they have to report to DZIT the payment due and a Zakat/ Tax return.

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The mission for DZIT (Department of Zakat Income Tax) is to administer and collect zakat

on commercial goods from Saudi individuals, also from non-Saudi individual doing business in

the Kingdom from permanent establishment or deriving income from a source in the Kingdom.

(Brief Information on DZIT, n.d.)

PwC provide service for these industries: financial services, public services, transaction and

valuation service, real estate, pharmaceuticals, transport & logistics, energy& utility, retail &

consumer.

Key facts and figures

In ending 30 June FY 2011 worldwide gross revenues of PwC's network of member firms

increased by 10.0% to US$ 29.2 billion. At constant exchange rates, revenues rose by 8.2%, they

provided services for 419 of the companies in the Fortune Global 500 and 443 of the companies.

PwC ranked as a business consulting leader worldwide in a series of IDC Market scape reports,

IDC also commended PwC's global talent and compliance consulting capabilities.

PwC UK won Consultancy of the Year at the 2011 Business Green Leaders Awards and was

listed in the Sunday Times Best Green Companies.

PwC US secured a place in the top 10 in Working Mother's 100 Best Companies list. Which is

important aspects that concern our country and an incentive to guide women to this path. (Van

Pelt, S. K. n.d)

PwC mission and objective

To become the number 1 professional service firm with high quality and best communication and

confidentiality for the client in the Middle East, and to develop themselves to face challenging that are

aligned with their firm scorecard. The one firm scorecard (client experience, people experience,

knowledge and network, risk and quality, financial performance) they aim to improve all of these aspect.

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They believe that a smart objective is by providing feedback to others in a timely basis, and help

others develop by providing balanced, constructive, written feedback with example within 2

weeks of receiving a feedback request.

they believe this world is driven by entrepreneurs - bright people with a bold vision, high

energy and strong determination to change the world by bringing innovative ideas to life their

mission is to help young innovative companies achieve their vision and become technology

market leaders, serving them as advisors through their early days to market success. )Terer, N.

2008, March 12).

Code of conduct

Their code is based on their values and it takes them to the next level, more efficient service, good

relationship with client, gain client loyalty and attract new client. Demonstrating their values in

action and contributing to the PwC Experience (they maintain their reputation and client through

believing that each individual represent the company. PwC invest in relationship with their

client). The Code also provides a frame of reference for PwC firms to establish more specific

supplements to address territorial issues.

Positions in the company for Tax department

From top: Leader, partner, senior director, director

Senior manager, Manager Senior associate, Associate

The intern mostly interact with senior manager Hatim Nairoukh, Christopher Baisden and

senior associate Hussain Al-nwaser , Mona Taha, and assurance associate Monira Alrammah.

Which had a huge impact in the learning experience.

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Tax and Zakat law in KSA

Every country has a different practice in Tax and Zakat. Here are some general law practices in

Saudi Arabia. The intern had deal and observed the implementation of these laws through

working in Tax department. These are some general law that was applied through working, and

some were mentioned in accounting courses, it was from a document that was giving in the first

day:

Tax law:

Non-resident person realizing income from in-Kingdom sources without having a permanent establishment will be subject to tax according to the following:

A) If the income realized is included in income specified in Article 68 of the Regulations, it will be subject to withholding income tax as per the rules specified in that article.B) If the income represents capital gains resulting from the disposal of fixed and current assets or represents capital gains resulting from the disposal of shares in a resident company, then such income would be subject to tax as per the general provisions of the Regulations

A natural person is considered a resident person in the Kingdom during a tax year if he has a permanent residence in the Kingdom and is available in the kingdom for a period that in total is not less than 30 (thirty) consecutive or non-consecutive days during the tax year.

The following sources of income are considered to be resulting from an activity performed in the Kingdom and accordingly realized from in-Kingdom source:

1) Return on loans to a non-resident in any of the following cases:a) If the loan is secured by movable or non-movable properties that are in the Kingdom.b) If the borrower was a resident in the Kingdomc) If the loan related to an activity practiced in the Kingdom through a permanent

establishment.

2) Income realized from technical or consultation services in any of the following cases:a) If the service is provided to a person resident in the Kingdom.b) If the service relates to an activity practiced in the Kingdom.

The intern prepared a Withholding Tax (WHT) for these service.

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Zakat law and computation:

Zakat law is based on Fatwa, it is obligation for all Saudi residents individuals and owner of business to pay zakat based on Article 8, zakat base in on net income resulting from gross income, including all revenue/ profit in all type and capital gain. DZIT computation is the same in case of Assessment or Zakat Return.

According to Article 12 from Income Tax law and Article 9 from by law, Expense that are deducted to compute Zakat base are all expense, and it has to be actual expense supported by certification, expense during the year, it should not be capital nature. (Alsultan, S. 2010).

Zakat base computation in the Zakat return is done by:

Saudi share in capital at 40%+ addition (adjusted profit/loss+ Retain Earning+ provision+

reserves+ long term loan)- deduction (Investment- loss- fix Assets)= Zakat base x 2.5%

=(capital+ addition- deduction).

SWOT analysis

PwC has a number of strengths, weaknesses opportunities as well as challenges. This

discussion begins with the strengths of the company

Strength:

Leadership among the Big Four accounting and auditing firms

PwC, Deloitte, Ernst & Young and KPMG are known as the Big Four accounting and auditing firms. PwC

remains the world's largest accounting firm with FY2009 revenues of $26,171 million, ahead of

Deloitte, Ernst & Young and KPMG. In March 2009, Kennedy Consulting Research

Leadership:

PwC is a leader among the Big Four Global presence and broad service

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Each year PwC's organize a Leadership Adventure programs for new joiner that focused on

helping you develop your leadership abilities and personal brand alongside some of our client-

serving partners, principals, and staff. PwC,( insid buzz n.d.).

Communication: PwC believe in team work and how it is important to learn and develop

themselves to give a better service and advice client, so each employee have a profile in PwC

website where it status as the world’s second largest accounting network with over than 161,000

people in 154 countries in firms across the PwC network share their thinking, experience and

solutions to develop fresh perspectives and practical advice.

Training and Achievement:

They opened PwC University that provide online course based on market need and

requirement to update employees. For the past three years They been ranked No. 1 in the

"Training Top 125". PwC is the UK’s largest audit firm, the company have managed to maintain a

revenue US$26.6 billion in 2011, Despite the difficult economic environment, many PwC

branches around the world are leader positions in their respective markets

For the seventh year running, the company has been able to maintain its top spot in ‘The Times

Top 100 Graduate Employers’ Survey (Frieder, E. n.d.).

These are some reviews from employees posted on PwC Network:

They have Great training scheme It's a fantastic place to pick up some soft skills, as you are in

contact with clients every day.

The work can become repetitive very quickly and quite boring after a few months. This could be

said of all accountancies. Make sure you don't get stuck in audit for too long and use it a stepping

stone to move to industry or something you're passionate about.

PwC encourages working in different departments, ranging from accounting to consultancy to

operations.

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They provide a great training for intern through online courses and lectures of extensive

exposure to their profession, organization, and people, what are the seasons, how to act with

client, how to be a leader and build responsibility for your job.

Strong clientele

Their multi-disciplinary approach is to consider client queries from every angle from their

viewpoint of a range of professional disciplines; by offering a total solution to their clientele they

differentiate themselves with in-depth industry knowledge, and respecting client confidentiality

and security. (Our expertise collected into industry groups. PwC, n.d).

They have risk management department that check the level of quality the employees are

providing which enable the company to maintain their quality level and standard.

Weakness:

Such a reliable service company as PwC may face Controversies with clients, adverse

publicity due to lawsuits

“In 2009, the company was criticized along with the promoters of Satyam, an Indian IT firm

listed on the NYSE, in a $1.5 billion fraud. PwC's US arm was the reviewer for the US filings for

Satyam. Consequently, lawsuits have been filed in the US with PwC as a defendant, PwC image in

India was earlier tarnished when its clients the DSQ Software and Global Trust Bank were indicted

in accounting and other scams. Lawsuit related adverse publicity is not limited to India alone. In 2009, the

Accountancy and Actuarial Discipline Board, which regulates the profession in the UK, Adverse

publicity may tarnish PwC's brand image which could lead to lose clients”.

Weakness in retaining talent

Talent remains a top priority for CEOs, and the challenge of recruiting and retaining talent is

still a key concern. According to the survey, 53 percent of global CEOs and 46 percent of U.S.

CEOs see the availability of key skills as a threat to their growth prospects. A Survey says that

talent constraints affected their ability to pursue a market opportunity and a third said it had

affected their ability to innovate. And a majority of CEOs (68 percent global; 71 percent U.S.)

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wish they could spend more time focused on developing the leadership of their business and their

talent pipeline. (Oliver, K. n.d.).

On the other hand, compliance with government (SEC, IRS) necessitates a good auditing

company. Consequently, many companies seek out a big four auditing Firm for their name and

expertise, many customers are repeat business. In other words, a company may have an

engagement with a client from year to years.

Opportunity

Increasing demand for compliance solutions

The demand of compliance service in USA, Europe, Middle east had increased due to large

market expansion by banks and credit unions by the European Union and Section 404 of the US

Sarbanes-Oxley Act have required companies to spend additional amounts on internal controls

and in applying new accounting and reporting standards. PwC and financial service product is

growing at a rate 3%--5% annually. (PricewaterhouseCoopers, Datamonitor 2010)

Growing demand for auditing in emerging markets,

Auditors play an important role in determining the quality of financial reporting and are

responsible for its effect in the stock market. Mining industry begin to grow in 2010, in a forecast

for 2011 see that global demand for base and precious metals continues to grow and a large

number of mining deals. The Prices for these commodities are expected to rise with the demand

increase, mining industry are facing an issue of shortage of skilled workers, particularly in

developing markets.

PwC delivers a many services to help mining companies solve the many challenges they face

today and to help them to prepare for the upturn in the future.( Goldsmith, T, Ralbovsky, S,

Hurley M, n.d).

Threat:

Regarding recruiting, the firm has been keen to keep as many employees on board during the

economic turmoil of the past few years. On April 2011 PwC saw largest ever spring intake, with

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209 graduates joining. Despite the ongoing euro zone crisis, PwC’s saw a bright future on this

one. The company’s business strategy is centred on achieving more growth of PwC’s consulting

market share. The firm is also eager to extend its lead in the core businesses of audit, tax, business

recovery services and transactions, while other sectors such as human resource services will also

be expanded.

Valuation of auction rate securities shifting the demand away from Big Four

An average 84% of companies audited by one of the Big4 have written down the value of their

auction rate securities in June 2008 and July 2008.Theaverage write-down was 11.5%. In stark contrast,

just 36% of companies whose accounting is audited by a non-Big 4 firm took write-downs. The average

discount was just 8% for companies that did take write-downs; A difference of 3.5 percentage

points could make a different for companies performance

PwC Marketing strategy

Marketing is a crucial element of a business strategy for service firms, who provide an intangible

item rather than an actual product so it can be harder to have brand recognition for their service

than it is for a who provides recognized product.

Marketing revolves around four key factors commonly known as the four ‘p’s Managers allocate

scarce corporate resources to achieve the business objectives. Booms and Bitner suggested the

extension of the 4Ps to include three additional factors applicable for service marketing: People,

Physical evidence and Process. The 3 factors have been utilized as illustrated below:

a) People

PwC employee represent the company reputation, their ethics, performance, behavior reflect

their company. PwC objective is to deliver the best quality and confidentiality so they provide

their employee training, motivation, and problem solving ability.

Their value that made their employee work effectively: teamwork, they believe that The best

solutions come from working together with colleagues and clients. Excellence by delivering

what we promise and adding value beyond what is expected through innovation, learning,

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integrity. Leadership demands courage, vision and integrity Leading with clients, leading with

people and thought leadership. They act in a socially responsible manner, within the laws,

customs and traditions of the countries in which we operate, and contribute in a responsible

manner to the development of communities.

Some employees post their view about the company in public website in the purpose of

advertising or giving feedback to whomever request. PWC attracts clients by partners soliciting

for business or through referrals.

b) Physical evidence

Refer to the environment in which the service is assembled and which the employee and client

interact, PwC employee preform their service in many ways, in auditing they perform a field

inspection. And tax department they sometimes go to DZIT to discuss about outstanding

information or error in computation. And sometimes they do meeting with client in PwC, and

sometimes they go to clients.

This year they changed their logo and employee business card, and wall painting that match

with the new logo, and post phrases of company value in the wall.

c) Process

Services are performances or actions done for or with the customers, the combination of these

steps constitute a service process which is evaluated by the customers, and PwC understand that

companies want their procedure done in efficient and timely manner and guarantee that their

financial information is secure. They respect the confidentiality and privacy of their client

information, which is an important aspect to gain keep loyal clients. ) Scott, C, n.d)

PwC develops through using Aura, Auditing Transformation Program, (ATP) is a key element in

the global insurance strategy, to improve auditing efficiency and provide the best value to client.

Also in implementing PwC experience, they maintain their reputation and client through believing

that each individual represent the company. PwC invest in relationship with their client, their

satisfaction give them client loyalty keep their reputation and attract more client

PwC competitive strategy

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PwC had created a significant value in the global and Middle East, through its professional

service, and their strategy of dealing with client, which made them gain a competitive advantage

in their sector. PwC compete in highly competitive industry they compete with Deloitte, McKinsey

& Company, Ernst & Young, KPMG and Boston Consulting Group. It also competes with management

consulting firms in the strategy implementation and system integration services. If the changes in

regulations across geographies become laws then competition could increase leading to an

adverse impact on the company’s market share.

The company’s competitive advantages lie on its large number of strengths which include:

Customer need: they always ensure to the client that PwC have quality and standard, and it’s

fully committed to ensuring continuity of service to satisfy its client. The company helps them to

recover from business continuity risks as rigorously as possible. And help retail business client to

consider new technologies that will improve their supply chain and reduce inventory and review

their overall operation for improvement.

Customer benefit: their certification underlines PwC’s position as a quality firm that is known

from their establishment. PwC’s BCM Practice gains a competitive advantage from having the

certification.

Enhance trust in your business: through voluntary disclosures or independent verifications in

areas such as supply chain integrity, measurement of carbon emissions, and data integrity to

satisfy discerning stakeholders who now demand greater levels of transparency when making

decisions about where to invest.

Align risk to performance and create individual accountability measures: by integrating risk at a

business unit level and creating more personal accountability and reward structures.

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Job history

These are some of the major assignments and the timeframe for each one.

Job Date Description

DZIT update form 17 June Its purpose is to administer and collect Zakat on commercial

goods, and compute Zakat due amount from net income. I full up 5

required forms for two companies from a documents provided by

the client (their government ID, company and subsidiary

registration, retail license)

Translated zakat/ Tax

return

19 June PwC have to provide an Arabic version to DZIT

I did the translation from Arabic to English, which was really

challenging because Arabic terms are confusing and totally

different and I wasn’t familiar with.

Financial statement

footing cross reference

23 June Error in the financial statement and the notes and whether it match

or not

DZIT assessment analysis 21 June It is done when the zakat and taxpayer feel that the amount

estimated is not consistent with the final assessment of zakat and

tax issued by the DZIT, then he can object or ask for a revised final

assessment during the time limit decided, which is usually 60 days

starting from the date of receipt of the assessment.

To figure out why there was a different between DZIT

computation and PWC computation by reading the objection reply

by DZIT to PWC that explain why and how they computed their

Zakat, and then I review their Zakat/Tax return report to find the

error. It was confusing but after 3 hours I figured out the error.

Write letter to DZIT 25 June I wrote a letter on behalf of a company to DZIT for requesting an

exemption for advance payment. I really learned how to write a

decent letter with a professional language.

Annual Withholding Tax 13 July By combining the monthly withholding tax and compute the

annual, it was easy but confusing because there was many payment

during the months for each type of payment.

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Tax/ Zakat return report 14 July It is done to outlines their tax liability, tax paid and tax due, and to

show tax base which zakat and tax will be computed upon. It is

required to be prepared at the end of the company’s financial year.

The individual and entities that are responsible for withholding tax is nonresident individual

that are making a profit business paid directly to DZIT. Pay the WHT due amount to DZIT on the

due date, i.e within the first 10 days of the month following the month of payment

The payments that are subjected to WHT are: Payments to non- residents for all services

performed in KSA (except technical services). Payments to non- residents for all technical

services performed (whether in KSA or outside KSA).

Forms to be field to DZIT:

Monthly Form: Within the first 10 days of the month following the month of payment

Annual Form: Within 120 days from the end of the fiscal year, except for partnerships which are

required to submit the form within 60 days from the end of the fiscal year

Conceptual framework Problems that PwC face, related to literature, reach a solution

Management

PricewaterhouseCoopers (PwC) is one of the world’s pre-eminent professional services

organizations, and one of the largest well known accounting firm called the big four, but they

have some internal weakness that need to be improved the Assistant manager Hatim Nairoukh

had explained to intern the problems and gaps within the company. The branch in middle east

have a new management it is hard to get used to a new management style, manager has specific

likes, dislikes, preferences, and hot button some employees might accept the change the new style

and some might object, that will distract the company from its goal by focusing in solving these

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problems rather than delivering their best service, The new management might have significant

authority that cause conflict between the employee’s interest and the company.

The employee and manager have to work together to overcome their conflict and reach to

reconciliation. The employee should learn more about their manager to reach to understanding

and how to behave and discuss accordingly. And understand that change can be good and that

different doesn’t mean “wrong”. New managers really appreciate employees who are encouraging

and cooperative.  Look for ways to be helpful.  Share information about your work, provide a

heads-up about problems, be a good listener, say nice things (as long as you mean them). The

employee can discuss expectation with the new manager; give clear information about their goals,

challenges, contributions, and resource needs.  Determine whether this manager's expectations

may differ significantly from the previous one.  Agree on goals, objectives, and expected results. 

Discuss how information will be shared and decisions will be made. (G, Marie, &Mclentre ph.

N.d)

And the manager should be flexible to match between his goal and the company’s goal and also

discuss with employee to gain their collaboration.

Another issue has been observed is that PwC Saudi Arabia their HR is located in Riyadh, which

makes it really difficult for the company to reach their employees and become aware of their

needs, and processes employee affairs. The intern have heard many employees complain about

being neglected.

Human Resources Management (HRM) functions as the link between the organization and the

employees, the success of a company does not rely solely on market realities and sustainable

competitive advantage, but in their human capital, if a company considers them as an important

asset and motivate, retain, develop employees. HRM should be able to employ both individual

and group psychology in order to commit employees to the achievement of organizational goals.

So PwC constantly contact the managers in every branch or visit to check their needs and

performance, and motivates the employees by communicating ethical policies and socially

responsible behavior to them significant role in clarifying the organization's problems and

providing solutions, and training while making employees working more efficiently (Pomoni,C,

2009)

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IT service:

PwC were not satisfied with their internal IT service one of challenging in IT department is to

manage resources so they matches with user needs, so they are trying to improve their system by

implementing ITIL-based processes and Live-Time Service Manager. They face shortage in

controlling the operation they perform and the degree of workload and waiting time. applying

ITIL will allow them to

Everyone had to automatically relate to the terms and systems and adapt to new routines, after

they applied the new system they tied up old documentation as well as quality control and transfer

of this documentation, training, configurations and preparation of launching material. And the IT

department is having a high levels of resource control, able to offer better and faster service. For

PwC clients, appropriate internal prioritizing has resulted in a quick and high quality service.

(PWC deliver World Class service with Live-Time, n.d)

Conflict with Department of zakat and income Tax (DZIT)

Saudi law have some shortage on the opinion of Hatim Nairoukh that it’s not updated

according to economy and political change, and the manual law for Saudi Arabia is in general,

and not clear with no specified verity of cases to guide managers for the suitable solution when

they face cases, unlike USA law they update their annually relatively to economy change, and

they present their law in a clear and specified details, which helps managers and avoid any

misleading and mysterious understanding of the law.

In Tax/ Zakat department Hatim Nairoukh explained how PwC face some conflict with

Department of zakat and income tax (DZIT), when client pay zakat DZIT and PwC may have

different point of view in which expense and asset should be included in zakat base, and method

of computation, because there is no certain solid Fatwa or clear zakat reference that applies to all

cases for PwC to implement and depend upon, so PwC as an advisory have to convince DZIT of

how they should compute zakat base and which items should be included and who dose zakat

apply to. For example, DZIT believe that zakat base is computed based on the zakat base or

adjusted net income which is higher, but in many cases PwC believes that they have a fatwa

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which gives the opportunity to apply the zakat base even if it is lower than the adjusted net

income.

Saudi Arabia need to have a clear detailed book for Tax and Zakat law to do business more

efficient, and to have a clear prove in every case rather than having different opinions and

judgment that hold cases for years until they reach to an agreement, like the intern have seen in

many Appeal and assessment cases.

Conflict with client

Based on what the intern observed, PwC face issues daily with many client that are unaware of

the required document needed for PwC to process their work, so they have to contact them many

time until they provide them the complete information and document which make the processing

very slow and sometimes PwC have to repeat the work because the client gave them the wrong

numbers or information. In Hatim Nairoukh opinion many companies have shortage in

professional talented employee that have a full knowledge of tax and zakat laws, which lay on

PwC burden to explain them and help the companies understand what is required from them, this

apply in both tax and audit.

PwC understand the importance of providing a quickly, correct service for their client so they

conducted a Plan for and Execute Day One, and Design and Maximize Future State Operations.

This is the approach PwC delivers in managing the integration as an enterprise-wide business

process.

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(How to complete the M& Aintegration process, Advisory and Tax service M&A Integration)

Technical part

The most challenging task was preformed is preparing Zakat return for the year ended 31March

2012. Tax/Zakat return must be prepared during 120 days.

It is prepared to outlines their tax liability, tax paid and tax due, and to show tax base which

zakat and tax will be computed upon, it is required for every company at the end of their financial

year, It was accomplished by following a completed Tax/ Zakat return to understand which

numbers to use from the provided document (identification, financial statements, income

documents, and expense documents). We might require bringing canceled checks, receipts, or

spreadsheets for any tax-related expenses, just to verify the payments. The integration of Zakat

returns that was prepared:

Zakat/Tax base depends on the shareholder, Companies with Saudi or mix shareholders

(foreign and Saudi), compute both tax and Zakat base. 100% Saudi shareholder compute only

Zakat. and 100% foreign shareholder compute Tax base.

For the company I prepared it was a Mix shareholder

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Tax Return:

Issues faced while preparing the Zakat return is that client are not aware of what the required

document to be provided for PwC to prepare their Zakat return, so PwC have to explain to them

what is required from them, which make the processing very slow, sometimes they send the

wrong information so we have to re do some parts, and sometimes we have to contact them many

time so they finally send us the documents, which makes it challenging for PwC because they

have a dead line to meet. The intern had to contact the client many time to ask for the required

information and wait, which delayed the expected due time 1 week, but it tock 2 weeks.

After PwC Prepare Zakat return they send it to DZIT to be reviewed, in some cases the DZIT

may have an Appeal in the Zakat base on items that should be or shouldn’t be included based on

their Fatwa, and by reviewing the financial statements and expense documents. So the DZIT

prepare an assessment if they came out with a different computation, and file an Appeal to PwC to

analysis the cause of the different and come up with an agreement. This procedure takes years and

sometimes court for settlement, which is a time and effort consuming for accounting firms.

It was confusing having many documents and knowing which information is included in the tax

return, but the intern was assisted by one of the coop, and the assistant manager Hatim Nairoukh.

and also by following a sample.

In PMU we didn’t have any background about Tax and Zakat implemented in Sasudi Arabia so

it the concepts and process was new and challenging.

Element of Tax/ Zakat return

K1: present the following with detailed element in schedules:

The Income, Gross income subjected to Tax

Cost: total operating cost, net profit/ loss

Adjustment on net profit- loss: net taxable profit

Tax computation: total tax due on income and investment

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Zakat computation on Saudi share: Zakat base, *2.5%= Zakat amount

Payment: total amount due

Balance sheet: current asset, noncurrent asset, intangible asset, At the beginning and end of

period.

Payment and expense have attachment to show details.

Evaluation of the internship experience

These 9 weeks was the most active weeks the intern have experience, by meeting interesting

knowledgeable people from different nationality, that have changed the prospective of the intern

and incentive to learn more and excited to inter this field in the near future. I learned how to act

professional and what are the important concepts that I must learn for work, this month was full

of new experience and meeting new people that have made a huge change in my life and carrier.

There’s a phrase that I see every day in PriceWaterhouse wall. “Value is in the passion you have

for what you do every day” it just make me want to work and learn as much as I can and feel

they joy in this journey.

This company respect employee and treat them equally regardless of gender or nationality, and

provide great learning experience and develops skills in organizing, act professional, be creative

and also develop independent personality.

Summary of finding and recommendation

PwC provide a professional with high quality and standard, and they are well known in the

global, but their number of clients is lower than their competitive, so they have to do more

marketing to attract new client in order to remain strong in the industry. The branch in the Middle

East is new, so they are not very organize in their folders and who is responsible for which

clients, they all work together which is a good thing but not very organized strategy, because if

there is a problem there wouldn’t know who is responsible. They also need Human resource

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person to take care of employee, and for fast processing, because their HR department is located

in Riyadh. Overall the company is in a good place with high revenue.

Conclusion

PwC is one of the Big 4 large accounting firm in the world that provide professional service for

both public and private clients, with confidentiality and following local laws in every country they

provide service for

In this period the intern had worked in every service the Tax department offers, there was

no time to set free without work which made it a valuable period to learn the practice of what we

learned in the university. Even though the university didn’t offer any Tax or Zakat chapters that is

applicable in Saudi Arabia, but the working experience teaches more than a university can do,

especially with the help of co worker, as long as the student have a good basic in accounting and

determination, anything can be learned. It was a good experience to get familiar with the work of

all sectors by Zak and Zakat, auditing for banking, manufacturing, insurance companies and all

types of sectors in the industry.

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