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The financial scandals in the United States and other countries ushered in financial reporting and corporate governance reforms that extend beyond the U.S. Sarbanes-Oxley Act of 2002 (SOX). These initiatives have increased the international financial community's awareness of the importance of risk management and internal controls. Tax risk management and related internal controls have been accorded less focus than risk management generally. The purpose of this research is to describe the current state of tax risk management of multinational enterprises (MNEs) by reporting survey responses from chief financial officers (CFOs) of U.S. and non-U.S. MNEs. The research shows that significant progress has been made by large MNEs in developing and implementing both general and tax risk management policies. The results provide guidance in identifying the loci and impact of organizational tax risk and indicate that respondents do not perceive alarming degrees of tax risk in their organizations. The study reveals a remarkable degree of similarity in U.S. and foreign firm responses and demonstrates, unexpectedly, that existing reporting structures enable CFOs to shift a significant degree of tax risk management to heads of tax.

This empirical research extends the work of Tanzi (1987) and provides comparative 1985-99 corporate income tax (CIT) rates for 29 different countries, spanning the United States, Europe, and Southeast Asia. A common worldwide trend in CIT rates emerges. During the 1985-99 period, the top CIT rate decreased by 11 percentage points in the United States, by an average of 11 percentage points in the European Union (EU) countries, and by an average of 9 percentage points in the Association of Southeast Asian Nations (ASEAN) countries. The research results are consistent with the international tax competition literature, particularly that of Gravelle (1986), which posits that a particular country's CIT rates are determined by not only such traditional factors as economic efficiency, administrative simplicity, and fairness, but also international consequences such as international CIT rates.

The purpose of this research is to identify the ways in which post-1986 international tax reform is expected to affect the repatriation decisions of multinational corporations (MNCs) and to develop expectations about the degree to which future tax reform initiatives will result in the full convergence in rates across international boundaries. The research presents comparative income tax rate data for 14 developed countries and the 11 European Monetary Union (EMU) member states for the 1985–1997 period. All countries reduced their top corporate income tax rate during that period, and the inter-country variation in rates decreased. The reduction in the variation in rates across countries should provide MNCs with more flexibility in dividend repatriation decisions as the difference in tax cost between repatriating foreign earnings and reinvesting them abroad is diminished. Although the research shows a trend toward more similar rates during the 1985–1997 period, it also identifies and discusses political pressures that mitigate against the full convergence in rates.

This research describes the status of harmonization of international business and financial reporting. First, it identifies and addresses the issues that have historically represented obstacles to harmonization (i.e., differences in political economy, culture, legal systems, stage of economic development, reporting practices (i.e., micro-based versus macro-uniform financial reporting practices), and emotional resistance to change). Second, the research describes how multinational enterprises' (MNEs) need for access to international capital markets now dominates and propels the momentum toward international financial reporting standards, as demonstrated by the European Union's (EU)January 1, 2005, adoption of IASB standards. Finally, the research demonstrates that total convergence of international financial reporting standards is years away by describing the 100+ existing differences between IASB's international standards (IAS/IFRS) and U. S. generally accepted accounting principles (GAAP).