Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Internal Watchdogs Want More on Tax


Internal Watchdogs Want More on Tax

Ernst & Young survey shows the tax function is increasing in its influence on executive level business decisions in New Zealand

Corporate tax functions throughout the world are making progress in responding to intense levels of scrutiny and pressure caused by regulatory and other change. According to Ernst & Young’s Global Tax Risk Survey 2006, Tax Risk: External Change, Internal Challenge, ensuring tax accounts and disclosures in financial statements are correct and tax risk management in general are the two leading measurements of tax function performance.

The biennial independent survey of 474 tax directors and senior financial executives across the globe – including 25 New Zealand respondents, representing major corporates – shows that time spent on tax financial reporting has increased by 14%, while time spent on planning and routine tax compliance has decreased 8% and 13% respectively over the last two years. This is a clear response by tax functions worldwide to the changed business environment.

Stephen Titter, leading Tax Accounting and Risk Advisory Services at Ernst & Young New Zealand, says the global survey provides important insights for all finance and tax executives, audit committee members, and tax and capital markets authorities.

“The results show that most world-class companies are adopting best practices for management of tax risks by updating their approaches to tax planning, tax accounting and controls, and tax compliance,” says Mr Titter.

However he points out that not all the New Zealand results are in line with the rest of the world, reflecting the smaller average size of our companies and their tax functions, greater influence of the tax function and our lesser regulatory requirements.

“The influence of the tax function on executive level business decisions has increased in the past two years, according to two-thirds of New Zealand respondents. It would seem New Zealand audit committees are now demanding a greater understanding and transparency around the potential impact of tax risk on the business and its reporting,” says Mr Titter.

“New Zealand respondents still spend more time on routine tax compliance than their global peers –38.3% of their time, compared to the global average of 31.3%. The most important measure for the tax function cited for New Zealand was timeliness of compliance, whereas globally the leading measure for the tax function is to ensure tax accounts and disclosures in financial statements are correct.”

Other key survey findings include:
•    The two most common reasons for tax risk challenges were increased complexity and lack of qualified staff, especially those trained in tax financial reporting.
•    54% of the respondents indicated that they have become more risk-averse during the last two years.
•    Two thirds of the respondents say that their risk coverage is comprehensive. SEC registrant companies lead non-SEC registrant companies in this area (76% as compared to 59%) with North American companies leading the pack at 80%, compared to 59% of European companies and 47% of Asian companies.
•    However, only 44% of the respondents reported that the tax department has a documented process for managing tax risk.
•    Only 10% of tax departments have instituted a regular program of review and testing by internal audit that goes beyond specific statutory requirements such as SOX 404. When they have been involved, they have identified material weaknesses ahead of the external audit in 25% of the cases.
•    35% of the companies surveyed intended to increase internal audit’s involvement in the next twelve months.
•    Tax respondents overwhelmingly (90%) report a well established communication channel between the tax department and senior management.
•    52% believe that the tax functions influence within their organizations has increased over the past two years.

Although the survey does show some important regional and other differences, what is much more obvious is the high degree of global consistency on the important questions.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news