FEI president & CEO's top challenges for financial executives for 2012.

• Author: Hollein, Marie N.
• Position: FROM THE PRESIDENT - Chief executive officers - Financial Executives International

This year's list of top challenges for financial executives has many elements similar to last year's, as there was much gridlock in our nation's capital and decisions that we expected from accounting standard setters are taking longer than expected. It's clear that the senior-level financial executive's role is a key one in helping organizations meet their 2012 challenges.

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Controlling the U.S. Deficit

The United States is continuing to face a debt and deficit crisis on a level that it has not seen in generations. The unemployment rate has hovered at 9 percent for most of the year and the U.S. had its credit rating downgraded to AA+ by Standard & Poor's for the first time in history. Near the end of 2011, rating agency Fitch reaffirmed its rating of AAA but classified the outlook on U.S. debt as "negative."

The Fitch announcement came days after the Joint Committee on Deficit Reduction, known as the "super committee," failed to come to an agreement on the deficit. This failure on both sides of the political aisle is an example of the difficult climb the U.S. faces in reclaiming its stable financial footing.

The 2012 elections will likely be fought on the topics of the debt and deficit and much election year politicking will be more about finger pointing than any new ideas on how to best tackle the issues.

While there have been rare instances of bipartisan support in recent months, the Republican unwillingness to consider tax increases and the Democrats' refusal to touch entitlement programs are examples of why uncertainty is likely to continue for months and potentially years to come.

Tax Reform

With taxation a hot topic during the 2010 elections, members of Congress have honored their pledge of making sure that tax reform is prominent on the legislative calendar. House Ways and Means Chairman Dave Camp (R-Mich.) has held numerous hearings on related subjects, including what a move to a territorial tax system would mean for American businesses.

Senate Finance Committee Chairman Max Baucus (D-Mont.) has also held numerous hearings on tax reform, including a retrospective analysis of the 1986 reforms.

While a major restructuring of the tax code is unlikely prior to the election, it's clear that everything is on the table. Though the specifics are still in doubt, tax reform will likely include lower corporate and individual tax rates, less itemized deductions and other tax benefits and a potential move to a territorial...