24 th Annual Health Sciences Tax Conference

Transcription

1 24 th Annual Health Sciences Tax Conference Managing tax function stakeholders: chief financial officers, audit committees and others December 10, 2014

2 Disclaimer EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the U.S. This presentation is 2014 Ernst & Young LLP. All rights reserved. No part of this document may be reproduced, transmitted or otherwise distributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Any reproduction, transmission or distribution of this form or any of the material herein is prohibited and is in violation of U.S. and international law. Ernst & Young LLP expressly disclaims any liability in connection with use of this presentation or its contents by any third party. Views expressed in this presentation are those of the speakers and do not necessarily represent the views of Ernst & Young LLP. This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does not provide tax advice to any taxpayer because it does not take into account any specific taxpayer s facts and circumstances. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. Page 2

3 Presenters Marlin Shaw Vice President, Tax CarePoint Health System Jersey City, NJ Wade McGregor Ernst & Young LLP Nashville, TN Mark Rountree Ernst & Young LLP Dallas, TX Page 3

4 Managing tax function stakeholders: chief financial officers, audit committees and others Successfully operating the corporate tax function It is not getting easier! Volume Complexity Pace Scrutiny It is not becoming less risky! Enterprise risk Personal risk Page 4

5 Who owns a stake in the corporate tax function? The C-suite (your bosses) Boards and audit committees Owners (especially private equity (PE) and public) Financial statement users Regulatory and administrative bodies (e.g., tax administrators, Public Company Accounting Oversight Board (PCAOB)) Your company s auditor All tax department employees Anyone who relies on your company for goods and services Page 5

6 Why do stakeholders matter? The risk inherent in tax administration and related financial reporting only seem to increase Base erosion, inversions, Luxembourg rulings, film festivals and the continued public scrutiny of corporate citizenship Control deficiencies and restatements Scrutiny around financial stewardship Operational risk: Insufficient resources Insufficient internal communication Lack of process and technology Changes with your company finance transformation Page 6

7 Why do stakeholders matter? Does anyone really understand what we do? Who do you want to own the risk? The tax department or the company as a whole? (i.e., joint ownership with your Stakeholders) Financial statement risk Who else at your company understands the financial aspects of taxes? How do you manage this risk? Do stakeholders understand the volume and pace of work the tax department is responsible for handling, week in and week out? Do any stakeholders have the background necessary to effectively evaluate whether you are doing your job well or not? The bottom line If you are not proactively managing your stakeholders, they may manage you in ways you don t anticipate and don t want! Page 7

8 What are the benefits of making a plan to manage stakeholders? Shared risk within the company Adequate resources to do your job well Appreciation and respect Proactive v. reactive Proactive avoids being the last to know relevant company information Page 8

9 Key points of concern for upstream stakeholders Are you adequately communicating? Alignment of tax strategy with business strategy Enterprise risk tolerance and alignment with tax positions Media risk Status of tax controversies and potential tax controversies Adequacy of resources to address growing demands (compliance and accounting), opportunities and risks Regulatory and legislative changes Page 9

10 What best practices exist for managing stakeholders? The C-suite (your bosses) Communication platforms (formal and informal) Visibility Boards and audit committees Communication platforms (formal and informal) Visibility Owners (especially PE and public) Financial statement users Regulatory and administrative bodies (e.g., tax administrators, PCAOB) Page 10

11 What best practices exist for managing stakeholders? Your company s auditor Communication Visibility All tax department employees Anyone who relies on your company for goods and services! Page 11

12 Questions? Page 12

13 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US Ernst & Young LLP. All Rights Reserved