HHGP Hudson Highland Grp., Inc. (MM)

NEW YORK, Nov. 7 /PRNewswire-FirstCall/ -- Despite the current environment of increased scrutiny of corporate finances, there appears to be a gap between companies' tax and finance functions. This is according to "Building a More Effective Tax Function," a report prepared by CFO Research Services in collaboration with Hudson Financial Solutions. Generally, the study found large gaps between tax professionals' and finance professionals' perceptions of how the tax function performed, what the group's priorities are, the barriers it faced in aligning with other parts of the company and how it has been impacted by broad regulatory and business developments. For example, when tax respondents were asked about the effect of the Sarbanes-Oxley legislation on their day-to-day activities, more than half said it had a great impact. However, nearly half of finance respondents said that Sarbanes-Oxley had little to no impact on the tax function within their company. Further, the study also found that a resounding 84 percent of respondents agreed that tax compliance activities take up a majority of the tax function's time, as opposed to only 16 percent who believed most resources are devoted to tax planning. Additionally, the tax function received significantly higher marks at executing routine compliances activities, but only mediocre scores when asked to work as a structured business partner. The weakest ratings came when tax was forced to perform as an ad hoc, unstructured business partner. "External business forces and regulatory changes are pressing the tax function to stretch beyond the traditional role into a presence throughout the entire organization. Tax must become more engaged in other business areas, particularly involved at the front-end of business and financial decisions," said Andrea Gronenthal, National Director, Tax Risk, Hudson Financial Solutions. "This paradigm shift makes tax's alignment with the finance function even more critical. Closer integration of the two will not only benefit both tax and finance, but the overall organization will see positive results." In order for better alignment to occur between the tax and finance functions, there are a number of steps that need to be taken, but it must start at the top, according to Gronenthal. The CFO must appreciate the challenges faced by tax and work to change how it is perceived within the overall department. Plus, management must create channels for effective communication between all parts of the organization. However, it is also the responsibility of tax executives to take the initiative to involve tax in all business units and truly step into a leadership role that positions tax as a strategic business partner. Additional survey findings include: * While 53 percent of tax respondents stated that time, budget or resource constraints highly impacted their day-to-day activities, only 28 percent of their non-tax financial counterparts thought these issues had a high impact on the tax function. * When it comes to daily activities, 81 percent of tax executives say that preventing public restatement of earnings projections and/or financial statements is a high priority. Their colleagues in finance, however, underestimate the urgency with which tax is pursuing its agenda, as only 48 percent of these individuals thought tax executives saw this as a high priority. * Seventy-four percent of the tax respondents said that improving processes for income tax accounting and for tax contingencies was a high priority improvement initiative for the next two years. However, only 26 percent of non-tax respondents thought this was a high priority initiative for the tax function. To learn more about the misalignment between the tax and finance functions within companies, the likely challenges resulting from that division, and how organizations can better manage these challenges, please download the full report from http://www.us.hudson.com/finance. About the Report Building a More Effective Tax Function is published by CFO Publishing Corp. CFO Research Services and Hudson Financial Solutions jointly developed the hypotheses for this research. Hudson funded the research and the publication of the findings. CFO Research surveyed 336 senior finance and tax executives at North American companies. Respondents came from a broad cross section of the U.S. economy. In addition, CFO Research conducted a series of interviews with senior finance and tax executives at 10 companies. About CFO Research Services CFO Research Services is the sponsored research group within CFO Publishing Corporation, which produces CFO Magazine in the United States, Europe, Asia, and China. CFO Publishing is part of The Economist Group. About Hudson Hudson (NASDAQ:HHGP) is a leading provider of permanent recruitment, contract professionals and talent management services worldwide. From single placements to total outsourced solutions, Hudson helps clients achieve greater organizational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses. The company employs more than 3,600 professionals serving clients and candidates in more than 20 countries. More information is available at http://www.hudson.com/ DATASOURCE: Hudson CONTACT: Sarah Kafenstok of Hudson, +1-312-795-4202, Web site: http://www.hudson.com/ http://www.us.hudson.com/finance

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