Those were among the findings of a KPMG poll of senior tax executives, according to a KPMG news release.
Some 57% of respondents said they believed both their role and stature had grown with peer groups over the past year, while 58% and 42% 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%) respondents indicated plans to add staff in the next year.
The new responsibilities have brought increased work for tax directors, as well. In fact, 92% of respondents said their department’s workloads have mushroomed due to 404 compliance work; 90% also cited increased documentation requirements for tax accounting.
Among other findings:
- The consensus among tax directors is that a host of new regulations have prompted extensive changes within tax departments in terms of personnel, organizational structure and process.
- Nearly one-third (30%) of tax executives said they have added full-time senior tax personnel during the past 12 months, with one-third increasing their staff by more than 25%.
- Almost half (45%) of those surveyed said they are planning to modify their tax department structure over the next 12 months.
The survey also revealed that more than 60% 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.
Additionally, the KPMG survey results indicate that tax departments are utilizing outsourcing or co-sourcing arrangements to meet greater workloads and demands. Co-sourcing allows a company to control the areas of the tax department that are outsourced to a third-party service provider and the term of the arrangement. More than half of the companies surveyed (57%) report outsourcing some of their tax-related functions. The most common is non-US income tax compliance (36%), followed by US income tax compliance (23%).
Tax departments are also addressing process and technology deficiencies, the survey revealed. Some 58% of respondents said they plan process improvements over the next 12 months, ranging from streamlining Sarbanes-Oxley compliance and remediation to automating the tax accounting process. At the same time, 45% of those surveyed plan to undertake tax technology improvements over the next 12 months.
The poll was based on 98 telephone interviews with corporate senior tax executives, between June 22 and July 8, 2005.