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July 31, 2011

New compliance and reporting models a challenge: E&Y

Companies with global operations are struggling to comply with increasing regulation and the growing complexity of financial reporting and tax rules, according to Ernst & Young research.

The Seizing the opportunity in Global Compliance and Reporting survey found that 64% of  financial executives from the world’s largest companies experienced unplanned tax audits within the past year, with almost half receiving unexpected tax assessments or penalties.

Nearly two-thirds of the 200 respondents said changes in rules will challenge their compliance and reporting processes.

E&Y’s global director of global compliance and reporting services Steven Shultz said globalisation and the drive for sustainable cost advantages had changed the way companies position their financial and tax operations.

“Companies are seeing an increasingly complex regulatory landscape and closer, cross-border collaboration by tax authorities under pressure to increase revenue. It is imperative that global businesses update their processes for statutory financial and tax filings to maintain compliance and competitiveness,” he said.

Shultz said that by clarifying global compliance and reporting requirements, process ownership and geographic coverage, “companies can improve effectiveness, enhance visibility and avoid costly and time-consuming surprises across the world”.

 

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