The survey findings represent a paradox of sorts, according to TEI Executive Director Timothy McCormally. "While it's reassuring that most companies are already working toward compliance, there is a bit of a disconnect in having only 13 percent reporting any resources allocated to it, considering the industry generally agrees that compliance is likely to run a substantial tab."

The TEI survey reveals that nearly all respondents (98 percent) consider one or more factors in their risk assessment, including:

• Legislative and judicial changes and effect on tax exposure accounts
• Changes to business operations (e.g., new products, M&A, etc.), and effect on tax expense accounts
• Changes to information systems, data entry processes or system controls, and effect on tax expense accuracy

The TEI survey also addressed "provisioning," a term used to describe the practice of setting aside a reserve of funds to cover any unforeseen tax liability. In addressing provisioning, respondents identified one or more of the following controls as a means to maintain reserves for exposure items, with 72 percent citing use of "most of [the following]":

• Detailed support of tax reserve is maintained, including account in which the reserve is recorded
• Exposure calculations and records are updated and quantified quarterly and reviewed and documented with management
• Approvals of changes in exposure items are documented
• Calculations of tax and interest are reviewed after controversy is settled and timely communication made of outcomes and any resulting procedure changes

Lynn Jordan, chair of TEI's Corporate Tax Management Committee, explained that provisioning is a topic of interest because government entities are calling for mandatory disclosure of reserve amounts. Much of the business sector has significant reservations about the move, however, citing the need for confidentiality during dispute negotiations and resolutions with the IRS.

"There's no question that the compliance landscape has become increasingly complex, and companies whose core competencies do not include accounting are likely to find it necessary to build that internal expertise or seek additional outside counsel," said Jordan.

Estimates of the cost to comply with Sarbanes-Oxley could reach well into the billions of dollars in additional staff, auditing fees, and other resources engaged toward compliance. In fact, a Business Week article released on the same day as the survey reported, "Industry experts say that as a result of these rules, auditing costs are likely to double, while the total tab for compliance [for a multinational company] could top $7 billion in the first year alone."