Accounting for tax high on the boardroom agenda as one in five UK companies debate it at every audit committee meeting, PricewaterhouseCoopers LLP survey reveals

Published at 12:39 PM on 06 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. With 60% of management agreeing that developing GAAP (IFRS and US GAAP) continues to put further strain on existing team resource time. Andrew Wiggins, tax director, PricewaterhouseCoopers LLP, said: “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: · 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 resource 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% saying that tax reporting responsibility has increased for their teams in the last three years and; · training is 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. 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. With short-falls in resource talent likely to be met by way of diverted resource (56%) and overtime (52%). Andrew Wiggins, tax director, PricewaterhouseCoopers LLP, concluded: “A shift in tax people resource 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.” Management cited training as the way forward (62%), 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. ENDS

Notes to Editors:

1. The survey was conducted online, and took place between 24 August and 19 September, 2007. Answers were received from 48 company tax accounting executives, including: CFOs, COOs, FDs, head of tax reporting, directors, tax supervisors and managers from FTSE 500 companies (56%), companies with overseas parent (23%) and other (21%). 2. A copy of the full results are available to the media on request from Georgina Rushie on 020 7804 6924 or [email protected] 


For more information contact:

Georgina Rushie
Tax PR Manager, PwC 
Tel:020 7804 6924 
Mobile:07725 707 175 
 

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