There is a clear link between Sarbanes-Oxley Section 404 compliance work and dramatically higher profiles for senior tax executives, particularly with audit committees and boards of directors, according to a survey of senior tax executives conducted by KPMG.
Some 57 percent of respondents to the KPMG survey said that they believed both their role and stature had grown with peer groups over the past year, while 58 percent and 42 percent of respondents reported greater visibility and prominence before audit committees and boards of directors, respectively. That heightened attention has also resulted in support from top management for additional tax department resources, as nearly all (92 percent) respondents indicated plans to add staff over the next 12 months.
"It's clear that the additional responsibilities related to Sarbanes-Oxley Section 404 compliance work have pushed tax executives and their departments to a higher level of prominence in corporate America, especially at the corporate governance level," said the national tax leader for Sarbanes-Oxley Section 404, Brad Brown, in a statement.
Among other major survey findings:
- Nearly half of those surveyed (45 percent) said that they are planning to modify their tax department structure over the next 12 months.
- More than 60 percent of tax departments are increasing training programs for their staffs after identifying employee skill deficiencies when dealing with new requirements and responsibilities under Sarbanes-Oxley.
- More than half of the companies surveyed -- 57 percent -- reported outsourcing some of their tax-related functions. The most common functions include non-U.S. income tax compliance (36 percent), followed by U.S. income tax compliance (23 percent).
- Some 58 percent of respondents said that they plan process improvements over the next 12 months, ranging from streamlining Sarbanes-Oxley compliance and remediation to automating the tax accounting process.
KPMG's Tax Department Survey was based on 98 telephone interviews with corporate senior tax executives, between June 22 and July 8, 2005.
