Do Financial Reporting Professionals and Tax Specialists Understand Each Other?

A recent research study on improving tax effectiveness in businesses by CFS Research Services and Hudson Financial Solutions found surprisingly large gaps between perceptions of tax specialists and financial reporting professionals. On two financial reporting issues, financial reporters felt that SOX had little impact on tax professionals, while about half of tax professionals believed SOX to have a great impact; additionally, over 80% of tax executives saw the avoidance of preventing financial restatements as a major priority while less than half of financial experts expected tax cohorts to have that level of concern. On other issues, tax specialists were more harried for time and saw greater need for improved processes in tax accounting and contingencies than financial reporters expected. Finally, over 80% of respondents felt that tax compliance dominated tax planning in use of tax department resources.

A truly scary article for tax professionals; if people in financial reporting, an area not far removed from tax activities, has a skewed perception of tax processes; imagine what executives without an accounting or finance background might believe.