Uptick in Tax Hiring, Demand Surges for FAS 109 Specialists
Thanks to the accounting scandals at Enron, Tyco and WorldCom, firms are under greater scrutiny to be clearer with financial statements, audits and tax reports. Complicating matters, business and tax issues have become more intricate thanks to language barriers, diverse cultures, different currencies and technology as well as complex international tax laws. Applying regulatory reforms such as FIN 48 and FAS 109, in particular, are placing greater resource demands on already strained tax departments.
Executive search firm, A. E. Feldman reports that recruiting among accounting firms is more competitive than ever. The firm says that top firms are seeking candidates who have an understanding of international finance and cultures. Experienced candidates looking for accounting jobs that can master the global aspects of business and also and create value are in high demand. A.E. Feldman adds that several opportunities currently exist for accountants with expertise in FAS 109 and FIN 48.
FAS 109 (Accounting for Income Taxes) is the governing standard for financial statement accounting for income taxes. It requires separate tax rates for deferred taxes for each jurisdiction where a company is subject to tax. The complexities and resource challenges surrounding FAS 109 have been exacerbated by additional rules governing the Accounting for Uncertainty in Tax Positions released by the FASB.
Known as FIN 48, the rule dramatically changes how companies account for uncertain income tax positions. They include a higher standard that tax benefits must meet before they can be recognized in a company’s financial statements. Although FIN 48 is intended to increase the comparability of financial statements, it also significantly increases the calculation and documentation requirements for individually identified income tax exposures.
Applying FAS 109 and FIN 48 amid vague international tax laws can be challenging. It can also place an increased burden on tax departments. Deloitte recently hosted a webcast focused on FAS 109 and FIN 48. The webcast participants, more than 3,500 professionals, reported that their companies are spending significantly more time this year on income tax accounting and reporting than they have in the past. Nearly 75% of respondents reported spending more time on income tax accounting and reporting. In addition, more than 50% of those polled say they are spending significantly more time on the issue.
The quagmire of issues and risks associated with accounting for global income taxes can seem overwhelming, even to experienced professionals. But for those seeking opportunities in financial accounting, financial analysis, auditing, tax accounting, cost accounting, managerial accounting, or any other aspect of accounting over the next few decades, it will be virtually impossible to ignore the international business environment. A.E. Feldman says that candidates with expertise in the global aspects of business are highly sought after by top firms.
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