Surge In Public Company Accounting Errors Puts Spotlight On Complexity

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To err is human, but some public companies are testing the limits of forgiveness. According to a new analysis from Ideagen Audit Analytics , the number of U.S. public companies with accounting errors so serious that they needed to withdraw their financial statements reached a nine-year high last year. All told, some 140 U.S. public companies had to withdraw and reissue their financials due to serious errors that were caught after the fact. The findings underscore some serious challenges confronting corporate finance departments as we make our way through 2025.

While much of the news coverage of this phenomenon has focused on failings in the audit function , the deeper issue is the increasingly complex web of intertwined details multinational companies are now managing across their tax, finance, legal and risk and compliance functions. There was once a time when the corporate tax function could afford to operate happily in its own little corner of the business, tracking payables and receivables, and diligently reporting on a quarterly basis. Now, the tax department is at the center of a regulatory, technological and professional revolution that has teams tracking more variables than ever before — many of them in real-time — while projecting new risks and protecting against current ones, often with smaller staffs and shrinking budgets .

Today's corporate finance, tax, risk and legal professionals are in a high-stakes environment where commerce and compliance are inextricably linked. Take a typical M⁘A transaction for example. With global M⁘A volumes projected to jump 15% this year, reaching a total of $3.45 trillion, acquisitions are sure to be a fixture in the corporate tax, finance, risk and legal playbook in 2025. Many companies will quickly find, however, that the work that goes into vetting, onboarding and reporting these deals has gotten considerably more complex in recent years.

Add to those concerns the growth of e-invoicing and real-time, transaction-level tax reporting , which now require companies in many jurisdictions around the world to report taxes in real-time at the point-of-sale, country-by-country tax reporting requirements being implemented in line with the Organization for Economic Co-operation and Development's BEPS Pillar 2 initiative and countless pending regulations focused on sustainability reporting, and the plot thickens further. Did I mention the new administration in the U.S., which is sure to introduce a new batch of variables to incorporate into the mix?