Accounting For Tax High On Business Agenda, Survey Reveals

by Amanda Banks, Tax-News.com, London

11 February 2008

One in five UK businesses place tax and how it is accounted for on every audit committee meeting agenda, rising to nearly half (46%) at every other meeting, an online poll of senior accounting executives conducted by PricewaterhouseCoopers LLP has revealed.

The survey also reveals that 60% of management agree that developing GAAP (IFRS and US GAAP) continues to put further strain on existing team resource time.

Andrew Wiggins, a tax director at PricewaterhouseCoopers LLP, observed that:

"Overtime and shifting resource are short-term fixes to a growing business need to cope with changes in tax accounting such as IFRS and US GAAP convergence. Better talent management and training are strategic longer-term methods that businesses can adopt now to cope with growing GAAP reporting demands together with improving process efficiency."

"Additionally, wider emphasis on training within the industry is needed to fulfil future roles that businesses, clearly, will be looking to fill in the future.”

The online poll found that:

• Some 19% of UK businesses place tax accounting on every audit committee meeting agenda, rising to nearly half (46%) at every other meeting to satisfy the demand from the boardroom;
• Human resource and talent management remain key challenges, 42% have recruited resources specifically to cover tax accounting, and 60% of senior managers view US GAAP and IFRS convergence as something that continues to put a further strain on existing team time;
• Over half of UK businesses’ senior tax management have tax reporting criteria in their personal objectives, with more than 70% revealing that tax reporting responsibility has increased for their teams in the last three years; and
• Training is viewed as the way forward, with 62% of management confirming that individuals responsible for tax accounting had undertaken a course in the last 12 months to tackle the knowledge pool demand for changes in tax accounting issues.

Mr Wiggins concluded:

“A shift in tax resources from planning to reporting is inevitable, given the rise in importance of tax on the boardroom agenda. Tax and accounting information is notoriously difficult to compile at diarised times, such as the financial year end, but increasingly the business requires such information on a real time basis to make strategic decisions throughout the year.”

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