The Eurozone debt crisis provides a clear illustration of the challenges facing governments in many developed countries. With an increasingly unsustainable debt burden, many countries are taking measures to strengthen their balance sheet and restore public finances to health.

The stimulus measures that were implemented to kick-start the global economy are being withdrawn and, in their place, a new environment of deficit-fighting austerity is taking hold.

At a time of considerable change and uncertainty in the policy environment, corporate tax executives must work harder than ever to identify, assess and mitigate emerging tax risks.

They must get to grips with fast-changing rules across every jurisdiction and comply with myriad local regulations.

As many companies look further afield for growth opportunities – often to emerging markets – they must ensure that their tax function keeps pace.

A more diverse geographical footprint may increase growth potential, but it also introduces new tax risks that can prove extremely costly if poorly managed.

This increased complexity of the tax environment is coinciding with continued pressure on finance and tax functions to maximize efficiency and achieve greater economies of scale.

Many companies have embarked on ambitious finance transformation projects to help them improve decision-making and reduce costs.

These typically involve the migration of commoditized processes into shared service centers, a shrinking of in-country finance departments and the implementation of standard global processes.

This broader transformation of finance also gives companies a valuable opportunity to update their global compliance and reporting (GCR) processes.

GCR comprises the key elements of a company’s finance and tax processes that prepare statutory financial and tax filings, as required in countries around the world.

By standardizing these processes, and automating compliance and reporting, companies can free up time and resources to deal with value-adding activities.

They can also achieve a clearer understanding of compliance and reporting and be better positioned to identify and manage emerging tax risks.

In Issue 06 of T Magazine, we examine current best practice in GCR and explore ways in which companies are strengthening their compliance and reporting as part of broader finance transformation efforts.

At a time when companies are facing an uncertain tax policy environment and a continuing need to maximize efficiency, GCR is a vital topic for discussion – not just in the tax function, but among the entire executive team.

This article was first published in Issue 06 of Ernst & Young´s T Magazine publication which can be accessed using the links below:

• Read all web articles from T Magazine issue 06
• Download full pdf version of T Magazine issue 06 (pdf, 7.40 MB)