Tackling Complex Technical Accounting and Reporting Challenges

In today’s volatile business landscape, companies face mounting technical accounting, tax, and financial reporting challenges. New standards, regulatory scrutiny, and complex transactions are making reporting increasingly difficult. For Chief Accounting Officers and Controllers, navigating these issues requires strategic foresight and agility. See how KPMG can help

Key drivers

A combination of regulatory changes, evolving business activities, and data complexities are fueling the rise in technical accounting and reporting challenges:

Constant Flow of New Standards and Regulations: The accounting landscape is rapidly evolving. In late 2024, FASB introduced key updates, including quarterly segment-level expense disclosures and, starting in 2027, detailed income statement expense breakdowns. These changes require significant data and process adjustments. Controllers face constant change as regulators introduce requirements like cyber risk and potential climate disclosures. Experts recommend early preparation to avoid last-minute scrambles.

Complex Transactions and Financial Instruments: Unusual events like mergers and acquisitions, public offerings and complex contracts push accounting rules to their limits, often requiring judgment in areas with little precedent. Even routine tasks—like cash flow classification—can become error-prone. New transaction types, such as crypto assets, add further uncertainty. These non-standard transactions heighten the risk of technical missteps.

Intensifying Scrutiny Threatens Financial Credibility: Regulatory scrutiny is intensifying. In 2024, restatements hit a nine-year high, and delayed filings surged due to accounting issues. The SEC and PCAOB expect problems to be resolved before filings, while investors and audit committees demand transparency. New FASB rules reflect investor calls for deeper insight. Restatements and delays can damage credibility and signal weak internal controls.

Talent and Expertise Shortage: A shortage of skilled accountants is compounding challenges. Many teams lack deep GAAP/IFRS expertise, and competition for talent is fierce. A KPMG study found that 60% of material weaknesses stemmed from insufficient accounting knowledge. ¹ Controllers are stretched thin, increasing the risk of unresolved issues. Notably, controllers have been rated the hardest finance role to hire for three years straight.

Data and Systems Constraints: Legacy systems often fall short of today’s reporting demands. New standards like expense disaggregation require granular data, which is hard to extract from siloed systems or multiple ERPs. Companies may need to overhaul charts of accounts or adopt new IT solutions. Manual workarounds are risky and time-consuming, making integrated, accessible data essential for compliance and control.

Potential impacts to your organization

The increasing complexity of technical accounting and reporting matters has a profound impact on controllers, their departments, and the broader organization.

Higher Risk of Errors and Restatements Increased Workload and Compliance Burden Distraction from Strategic Activities Heightened Scrutiny from Auditors and Boards

Higher Risk of Errors and Restatements

As accounting grows more complex, errors are rising. In early 2024, 140 public companies restated financials—the highest in nearly a decade—often due to revenue recognition or expense misclassification.² These mistakes not only cost time and money but also damage reputations and attract regulatory scrutiny. Restatements signal control weaknesses, making accuracy in reporting more critical than ever.

Increased Workload and Compliance Burden

Controllers face heavier workloads and rising compliance costs. New disclosures and tighter deadlines mean longer hours and more detailed work, often requiring outside help. Despite this, delays are increasing—71 annual reports were filed late in 2024, up from 42 in 2023.³ Smaller firms are hit the hardest, and the pace is contributing to burnout and retention challenges.

Distraction from Strategic Activities

Frequent accounting issues are pulling finance leaders away from strategic work. Controllers who could drive growth or analytics are instead focused on compliance and remediation. Key initiatives like system upgrades or M&A may be delayed, and junior staff miss out on strategic development. As the role expands to areas like ESG and data governance, balancing urgent tasks with long-term goals is a growing challenge.

Heightened Scrutiny from Auditors and Boards

Complex accounting draws intense scrutiny from auditors and boards. Areas involving judgment or new standards face deeper testing. Past errors raise red flags, prompting frequent updates and, in some cases, investigations or leadership changes. Recent examples show that even minor issues can escalate quickly, making accuracy a top priority at all levels of governance.

For controllers to effectively guide their organizations through technical accounting and reporting matters, a strategic and proactive approach is essential.

Proactive Planning for Change

Controllers should monitor regulatory updates and start planning early for new standards, using mock disclosures and dry runs to identify issues and secure resources ahead of deadlines.

Invest in People and Expertise

Upskill teams through training and external support, while fostering a learning culture and rethinking recruitment to attract and retain technical accounting talent.

Harness Technology and Improve Processes

Use automation and analytics to reduce manual errors and improve compliance, while upgrading systems and refining processes to manage complexity more efficiently.

To effectively manage the evolving financial landscape, controllers must proactively plan for regulatory changes, invest in their team's expertise, and leverage technology to streamline processes. This strategic approach enhances compliance, manages complexity, and boosts efficiency, thereby strengthening the overall controllership function.

How KPMG can help

Navigating complex accounting and financial reporting requirements demands experience, judgment, and rigor. KPMG helps companies address complex accounting issues, manage GAAP and IFRS change, and meet SEC reporting obligations with confidence.

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Footnotes

1 KPMG Study “2024 IPO material weakness study” May 2025

2 Forbes, “Surge in Public Company Accounting Errors Puts Spotlight On Complexity” (Feb 12, 2025)

3 Intelligize, “Inadequate Internal Controls Contribute to Surge of Delayed Annual Reports” (March 5, 2024)

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