Despite an environment that’s putting increased scrutiny on corporate finances, the tax and finance functions of many companies still aren’t on the same page, according to a new research study.According to “Building a More Effective Tax Function,” a report prepared by CFO Research Services and Hudson Financial Solutions, large gaps exist between tax professionals’ and finance professionals’ perceptions of how the tax function performed and what the group’s priorities are.
Specifically, the report found that:
- When tax respondents were asked about the effect of the Sarbanes-Oxley Act on their day-to-day activities, more than half said it had a great impact. However, nearly half of finance respondents said that SOX had little to no impact on the tax function within their company.
- 84 percent of respondents agreed that tax compliance activities take up a majority of the tax function’s time, as opposed to only 16 percent who believed most resources are devoted to tax planning.
- While about half of tax respondents stated that time, budget or resource constraints highly impacted their day-to-day activities; only about a quarter of their non-tax financial counterparts thought those issues had a high impact on the tax function.
- In terms of daily activities, 81 percent of tax executives said that preventing public restatement of earnings projections and financial statements is a high priority. However, less than half of surveyed finance workers believed tax executives saw this as a high priority.
- Nearly three-quarters of tax respondents said that improving processes for income tax accounting and for tax contingencies was a high priority improvement initiative for the next two years. However, just over a quarter of non-tax respondents thought that was a high priority initiative for the tax function.
The full report is available at www.us.hudson.com/finance, and is based on a survey of 336 senior finance and tax executives at North American companies.
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