| Accounting for tax high on the agenda |
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| Wednesday, 13 February 2008 | |
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One in five UK businesses place tax and how it is accounted for on every audit committee meeting agenda.
This rises to nearly half (46 per cent) at every other meeting, an online poll of senior accounting executives conducted by PricewaterhouseCoopers LLP has revealed. Sixty per cent of management agreed that developing GAAP (IFRS and US GAAP) continues to put further strain on existing team resource time. Short-term fixes Andrew Wiggins, tax director, PricewaterhouseCoopers LLP, said that overtime and shifting resource were short-term fixes to a growing business need to cope with changes in tax accounting such as IFRS and US GAAP convergence. He suggested that 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. Wider emphasis on training within the industry is also needed to fulfil future roles that businesses, clearly, will be looking to fill in the future. The online poll also found that human resource and talent management remain key challenges. Forty-two per cent have recruited resource specifically to cover tax accounting. Training Over half of UK businesses’ senior tax management have tax reporting criteria in their personal objectives, with more than 70 per cent saying that tax reporting responsibility has increased for their teams in the last three years. Training is the way forward, with 62 per cent 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. The online survey of senior management, from head of tax through to the chief financial officer also found that while some had recruited resource specifically to cover tax accounting, IFRS and US GAAP convergence requirements, tax teams continue to bear the brunt of the increased focus on tax accounting in terms of time. Short-falls in resource talent were likely to be met by way of diverted resource (56 per cent) and overtime (52 per cent). Notoriously difficult to compile Wiggins explained that a shift in tax people resource from planning to reporting was inevitable, given the rise in importance of tax on the boardroom agenda. He said that tax and accounting information is notoriously difficult to compile at diarised times, such as the financial year end, but that increasingly the business requires such information on a real time basis to make strategic decisions throughout the year. Management cited training as the way forward (62 per cent), confirming that tax accounting training was on the increase in their respective companies. Team members with tax accounting responsibility had taken training within the last 12 months, in an effort to tackle the demand of tax accounting developments. Related articles
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