Magazine article Business Credit
Survey of Tax Directors Finds Tax Risk Management Gaining Prevalence in Governance; Requiring Changing Roles and Responsibilities of Executives
Ernst & Young announced the results of a worldwide independent survey of corporate tax directors, which found that as legislative and regulatory changes around the world have made tax risk planning an urgent and top priority, many companies are aligning their tax strategies with their organization's overall enterprise risk profile to meet this challenge.
The Ernst & Young study, "Tax Risk Management: The Evolving Role of Tax Directors," found that 95 percent of respondents acknowledged the importance of planning a tax strategy that is consistent with overall enterprise risk profiles, and nearly half (45 percent) already are actively doing that.
In fact, half of the tax directors surveyed said that their tax department is represented on their company's overall enterprise risk management team, and 60 percent of those who said it was not believe it should be. What's more, nearly 70 percent of tax directors said that they expected to see demands for more disclosure and transparency over the next two years.
"Tax departments are playing a much more important, immediate and visible role as organizations wrestle with the increasing demands of corporate governance and regulatory compliance," said Mark A. Weinberger, Ernst & Young's Americas Vice Chair, Tax. "As a result, we're seeing significantly increased alignment between tax risk and overall enterprise risk management and with it a tax director with increased responsibilities and far more constituents to satisfy, "Weinberger added.
Nearly halt" (44 percent) of tax directors said that their tax function's influence on executive-level business decisions has increased in the past year, and 41 percent expect that influence to increase next year. In addition, almost two-thirds of tax directors say they are receiving more direction on tax risk matters than they were two years ago, and over 75 percent say they are now receiving active direction from three or more different areas within their organizations. …