Compliance budgets miss the mark

Compliance budgets miss the mark

Many Australian companies' budgets are inadequate to meet the growing number of compliance projects, according to the Resource Connection Australia (RCA) survey.

While 85 per cent of respondents have noticed an increase in internal risk and compliance projects, almost half have no additional budget to complete such projects.

The survey, which identified employer attitudes towards contracting and project professionals, involved 69 large organisations in Sydney, Melbourne, Tokyo, Hong Kong and Taiwan.

Respondents came from various industry sectors, including financial services, property and construction, manufacturing, telecommunications and technology.

RCA managing director Rob Clemensha said the survey showed an increase in the numbers of projects related to accounting procedure reform, anti-money laundering, tax consolidation and change management and systems implementation.

He said International Financial Reporting Standards (IFRS) compliance and the government's ninth Corporate Law and Economic Law Reform Program (CLERP 9) were among legislative changes having the greatest impact.

"Given the growing emphasis on the personal legal responsibilities of CEOs and CFOs, 85 per cent of respondents have noticed an increase in internal risk and compliance projects," he said.

The cost of these projects averaged $2 million, ranging between $20,000 and $25 million.

A further 36 percent expect projects to increase over the next 12 months with 48 percent increasing their use of contractors.

Clemensha said 23 percent attributed the increased use of contractors to the workload associated with additional compliance requirements. He said contractors were increasingly being valued as a viable alternative to traditional consulting firms in undertaking discrete specialist projects in a flexible and cost-effective manner.

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