[IN] FIN EDU HED
[SU] SVY LEG ECO
— WITH PHOTO — TO BUSINESS, EDUCATION, AND NATIONAL EDITORS:
New Tax Law Increasing Need for Specialized Tax Professionals
BOCA RATON, Fla., May 1, 2018 /PRNewswire-USNewswire/ — When
President Donald Trump signed the new Tax Cuts and Jobs Act into law
last December, it included the most sweeping changes to tax structures
for corporations in decades, leading companies to assess the impact on
their financial statement disclosures and creating additional
financial reporting and audit risk considerations to both companies
and their external auditors.
With studies showing tax account complexity and judgement errors as
common reasons for tax-related misstatements, the Big 4 accounting
firms have been focused on addressing the latest tax accounting
developments and ASC 740, a set of financial accounting and reporting
standards, for the effects of income taxes that result from a
company’s activities during the current and preceding years.
Companies, when facing increased strain in their internal tax
department, may consult with specialized tax professionals to achieve
better control over tax accounting issues. Companies typically use
either one or a combination of (1) their external auditor, (2) other
consultants including tax and law firms, or (3) their internal tax
departments for tax compliance and planning services.
In addition to the reduction in the corporate tax rate from 35 to 21
percent, tax professionals face a new tax regime for foreign earnings
and a mandatory earnings repatriation tax, new limits on interest and
net operating loss deductions, the elimination or expansion of
deductions, the retirement of tax credits and the creation of even
According to the research report “The 2017 Top 100 Firms and Regional
Leaders” from Accounting Today, the Big 4 accounting firms remain in
the top five tax firms in the United States. During the 10-year period
between 2007 and 2016, most of the Big 4 public clients have purchased
tax services (73 percent per Audit Analytics data) from their audit
firms due to perceived cost savings and knowledge spillover benefits
of integration. The new tax law will undoubtedly drive even more
growth for Big 4 tax services.
Jian Cao is an associate professor and Stone Fellow in the School of
Accounting at Florida Atlantic University’s College of Business. The
opinions expressed in this article are those of the author and do not
reflect or represent the opinions of Florida Atlantic University.
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SOURCE Florida Atlantic University College of Business
-0- 05/01/2018
CO: Florida Atlantic University College of Business
ST: Florida
IN: FIN EDU HED
SU: SVY LEG ECO
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