Global Statutory Reporting

 

Global Statutory Reporting (GSR) is a critical part of a company’s license to do business in each geography it operates.  GSR can be a sizable investment for multinational companies required to file financial reports in multiple countries, e.g.:

• Local financial statements can be significantly different from what is used for corporate consolidations due to differences in accounting standards and materiality thresholds.  

• Annual financial reports are often lengthy and complex with numerous required disclosures.  

• Statutory audits can require a large time commitment for the company in addition to substantial audit fees.

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Regardless of the significance of GSR, for various reasons it typically does not get the same level of attention when it comes to process optimization as other accounting and finance activities.  GSR is often managed in a decentralized manner.  Processes tend to vary across geographies based on history and preference rather than being harmonized around best practice, and there is minimal leveraging of economies of scale.  Corporate finance leaders may not be familiar with local requirements and company processes making them ill positioned to drive improvement. Some companies are required to incur significant outsourcing costs while remaining responsible for providing all necessary information and accountable for the results. Because of their structure audit firms are  typically decentralized which can result in additional inefficiencies and high audit fees.