U.S. tax directors report that they now have greater visibility before corporate leadership, but they also believe they are spending more time on work that is less valued by their organizations because of increasing legislative and regulatory demands, according to a survey of senior tax executives by KPMG LLP.
The majority of survey respondents ranked accurate, timely financial reporting (63 percent) and tax return compliance (57 percent) as the top two functions that their departments will spend time on during the next year. However, when asked to rank tax functions based on their value to the organization, the majority of respondents ranked cash tax savings/tax deferral (69 percent) and effective tax rate (64 percent) as the top two most valued functions.
Brad Brown, KPMG’s national partner-in-charge of Global Tax Transformation Services also noted in a statement that many corporate tax departments reported that headcount and funding are not keeping pace with increased demands.
Among other major KPMG survey findings:
- While there was general agreement on the increased demands associated with tax reporting, some 42 percent of tax executives said that they actually have fewer days in the financial close process than they did last year, with only 7 percent saying they have more time.
- Tax departments continued to grapple with increased work as a result of internal controls requirements (80 percent), increased documentation requirements (86 percent), and increased independent auditor requirements (81 percent).
- Nearly 90 percent of tax directors said increased tax accounting and 404 work are forcing them to spend less time on tax planning than they would like.
- A majority of respondents (64 percent) nedplan to enhance their technology capabilities to deal with the increased regulatory workload.
- In addition to technology-specific improvements, tax departments reported that they would be looking to increase training (56 percent), enhance the interim review with their external auditor (51 percent), add resources/staff (44 percent), and increase use of outside consulting (35 percent).
KPMG’s 2006 Tax Department Survey was based on telephone interviews with 203 corporate senior tax executives at U.S. companies, in June and July.
