Midyear conference survey shows tax departments need additional resources to address tax risk needs.

Corporate tax departments appear to need additional resources from corporate senior management, particularly in the area of information technology, to effectively address tax risk issues in today's Sarbanes-Oxley environment, according to a survey conducted by KMPG LLP during TEI's 2006 Midyear Conference.

Supporting this conclusion is the survey's key finding that a majority of tax departments still rely heavily on manual tax-control processes, leaving them vulnerable to inaccuracies and reporting errors. In fact, three-quarters of tax-risk control processes are currently manual for 57 percent of respondents, while more than half are manual for 32 percent of respondents. The survey of nearly 300 tax directors, which was conducted with the help of hand-held audience response units, was part of a conference session featuring Steve Rainey and Brad Brown of KPMG.

"Continued reliance on manual processes clearly raises risks for tax departments in an increasingly regulated business environment," said Timothy McCormally, Executive Director of TEI. "The survey confirms that tax departments need more resources to respond to the growing demands being placed upon them."

Brad Brown, KPMG's National Tax Leader for Sarbanes-Oxley Section 404, concurred: "Tax departments tell us they want to update their tax control processes so that they can transform the business-unit-based financial information they currently receive into the legal-entity-based information they need for tax reporting purposes. Their focus is on enhancing their ability to deliver timely and accurate information internally and externally."

"Tax has been a source of material weaknesses as reported under Sarbanes-Oxley 404," Mr. Brown added. "There appears to be a...