May 19, 2020

Canadian Accountants Anticipate Recession-Proof 2012

RBC
2012 outlook
2012 forecast
2012 economy
Bizclik Editor
3 min
Canadian Accountants Anticipate Recession-Proof 2012

According to the latest CICA/RBC Business Monitor, fewer Canadian executive chartered accountants are predicting a recession in Canada and a majority are forecasting a positive outlook for their company's revenues and profits.

Only 14 per cent of the executive CAs surveyed believe that a Canadian recession will occur in the next six months, down 13 per cent from the previous quarter.  The respondents are also feeling better about the prospects for the American economy, with 44 per cent projecting a recession stateside, down 18 per cent from Q3 2011.  Still, almost half (45 per cent) feel that the economic state of the U.S. will represent the strongest challenge to the growth of the Canadian economy, down from 57 per cent last quarter.

“It is encouraging to see executive CAs beginning 2012 by becoming more at ease with the economic climate in Canada and the United States,” said Kevin Dancey, FCA, president and CEO, Canadian Institute of Chartered Accountants (CICA).  “Canadian businesses appear ready to face the challenges that a new year may bring but the economic storm clouds forming overseas are a looming presence.”

Almost a quarter of respondents (22 per cent) feel that the European debt crisis is the greatest challenge to economic growth in Canada, an increase of 13 per cent from last quarter.

“Although the European debt crisis is beginning to weigh on Canadian CAs, this saga doesn’t appear to be softening their optimism for their companies’ growth projections,” says Peter Conrod, vice president, Client and Business Strategy, RBC. “Canadian businesses believe that there are strong opportunities among the challenges expected in 2012.”

Important insights for the 2012 outlook:

  • Optimism about the Canadian economy sits at 20 per cent, up from 16 per cent recorded last quarter. Most of the respondents (57 per cent) remain neutral about the economy.
  • Forty-nine per cent of respondents say that they are optimistic regarding the economic prospects facing their company over the next 12 months, relatively unchanged from 48 per cent in Q3.
  • Sixty-eight per cent expect their revenues will increase over the next 12 months, up from 63 per cent last quarter.  Thirty-nine per cent expect revenues to increase by five per cent or more.
  • Sixty per cent of CAs expect that their profits will increase over the next 12 months, compared with 57 per cent in Q3. Thirty-nine per cent expect profits to rise by five per cent or more.
  • Forty-two per cent of respondents anticipate that employee numbers will rise at their companies, with 19 per cent expecting an increase of five per cent or more. Another 41 per cent do not anticipate any changes.


The CICA/RBC Business Monitor is issued quarterly, based on a survey commissioned by the CICA. The report draws upon business insights of CAs in leadership positions in privately and publicly held companies across Canada.

For the Q4 2011 study, emailed surveys were completed by 311 CAs of 4,353 identified by the CICA as holding senior positions (CFOs, CEOs and COOs). The response rate was seven per cent, with a margin of error associated with this type of study at ± 5.6 per cent, with a confidence level of 95 per cent. The survey was conducted by Harris/Decima from November 8 to 28, 2011.  A background document is available online at www.cicarbcbusinessmonitor.com.

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Jun 8, 2021

Six issues at the top of tax and finance leaders’ agenda

Tax
Compliance
financeleaders
Deloitte
Kate Birch
4 min
As businesses accelerate their transformation journeys, tax leaders are under increasing pressure to add strategic value. Deloitte reveals six tax trends

New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.

According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.

And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.

Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.

Trend 1: Businesses seek more strategic counsel from tax

Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.

According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”

Trend 2: Tipping point for resourcing models

Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.

Trend 3: Digital tax administration is moving faster than expected

in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.

"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."

Trend 4: Data simplification and lower-cost resourcing are top priorities

Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.

At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”

Trend 5: Skillsets are shifting

Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.

Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact 

Trend 6: 2020 brought productivity improvements

Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.

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