According to a study by Sutter, 56% of tax consultancies in 2005 viewed their position in a twoyear
outlook as "rather good“, with 11% even finding the outlook "very good“. On the other end
of the scale, the pessimists comprised merely 11% of the respondents, judging their perspective
as "rather bad“. 30% had neutral expectations and 2% made no indication.
The optimism in the meantime has been rather restrained. The general economic crisis soured
the mood of 2005. The 2008 branch report by Sparkassen Finanzgruppe for the branches of
auditors and tax consultancies draws a conclusion that turnovers of tax consultancies saw a
negative development already in the fourth quarter of 2007. The income of tax consultancies in
fees mainly depends on turnover and profits of commercial enterprises, which means that the
negative market trends for tax consultancies follow with a delay the general developments.[...]
Table of Contents
1 Introduction
1.1 SUBJECT MATTER OF THE THESIS
1.1.1 Basics on Market Trends in the Tax Consultancy Branch
1.1.2 Competitive Pressures upon Tax Consultants by Other Service Providers
1.1.3 Extension of the Scope of Operations in Response to Market Trends
1.1.4 Definition of Credit Rating Advisory Services
1.2 BREAKDOWN OF SUBJECT MATTER INTO TWO MAIN PARTS AND PARTIAL HYPOTHESES
2 Objectives and Methodology
2.1 THE UNDERLYING CAUSE AND THE THESIS OBJECTIVE
2.2 BASIC THESIS BREAKDOWN INTO PARTIAL THESES
2.3 TRANSFORMING THE PARTIAL THESES INTO HYPOTHESES
2.3.1 Generally on the Hypotheses
2.3.2 Hypothesis from Partial Thesis 1
2.3.3 Hypothesis from Partial Thesis 2
2.3.4 Hypothesis from Partial Thesis 3
2.3.5 Hypothesis from Partial Thesis 4
2.4 METHOD FOR VERIFYING THE PARTIAL THESES
2.4.1 Method for Examining the Credit Rating Advisory Services – Hypotheses 1 and 2
2.4.2 Examination of the Potential for Credit Rating Advisory Services – Hypothesis 3
2.4.3 Method for Implementation in the Market - Hypothesis 4
2.5 METHODOLOGY OF THE EMPIRICAL SURVEYS
2.5.1 Data Gathering Method under Both of the Surveys
2.5.2 Weighting in the Survey According to Numbers of Authorised Tax Advisors
2.5.3 Bank Selection and Assessment according to Regional Significance
2.5.4 Summary of the Selection Criteria and Outline of the Research Method
3 Desk Research
4 Results
4.1 RESULT FOR HYPOTHESIS 1
4.1.1 Statutory Tasks of Tax Consultants
4.1.2 Activities of Tax Consultants Subject to Agreement
4.1.3 Restrictions to Credit Rating Advisory Services under the Law of Tax Advisors
4.1.4 Legal Restrictions to Credit Rating Advisory Services
4.1.5 Verification of Hypothesis 1
4.2 RESULT FOR HYPOTHESIS 2
4.2.1 Generally on Qualification for Credit Rating Advisory Services
4.2.2 Verification of Hypothesis 2
4.3 GENERALLY ON HYPOTHESES 3 AND 4
4.3.1 Preliminary Note on Hypotheses 3 and 4
4.3.2 The Planned Sample Size
4.3.3 The Sample of Banks to Include in the Selection
4.3.4 The Sample of Tax Consultants to Include in the Selection
4.3.5 Initial Pretest Ahead of the Survey
4.3.6 Implementation of the Data Collection Effort
4.4 RESULT FOR HYPOTHESIS 3
4.4.1 Return Rate in the Survey
4.4.2 Sample Spread
4.4.3 Evaluation of the Results of the Online Survey: General
4.4.4 Evaluation of the Online Survey – Rating Practices by Banks
4.4.5 Evaluation of the Online Survey – Bank Internal Measures
4.4.6 Evaluation of the Online Survey – Impact on Rating
4.4.7 Verification of Hypothesis 3
4.5 RESULT FOR HYPOTHESIS 4
4.5.1 The Return Rate in the Survey
4.5.2 Sample Spread
4.5.3 Evaluation of the Online Survey – Current Credit Rating Advisory Services
4.5.4 Evaluation of the Online Survey – Future Potential
4.5.5 Verification of Hypothesis 4
5 Discussion
6 Conclusion
6.1 SUMMARY AND THE RESULTS OF THE EMPIRICAL SURVEY FOR BANKS
6.2 SUMMARY AND THE RESULTS OF THE EMPIRICAL SURVEY FOR TAX CONSULTANTS
6.3 SUMMARY AND THE THESIS OUTPUT
Research Objectives and Focus Areas
The primary aim of this thesis is to examine the feasibility and regulatory allowance of credit rating advisory services as an extended business field for tax consultants in Germany. The work seeks to determine whether tax professionals can effectively provide these services and if there exists a tangible demand within the market for such assistance, ultimately aiming to identify new potential revenue streams for the tax advisory branch.
- Regulatory and legal framework for credit rating advisory by tax consultants
- Market demand and potential for credit rating advisory services
- Qualification and training requirements for tax advisors in rating matters
- Empirical analysis of bank rating practices and customer-consultant interactions
- Implementation status and strategies for tax consultancies in Germany
Excerpt from the Book
1.1.4 Definition of Credit Rating Advisory Services
There is no definition of credit rating advisory services. One possible definition of such services could be that credit rating advisory services comprise all forms of services the aim of which is to improve the internal or external rating grade of a firm by modifying or communicating the relevant hard and soft factors and to effect positive changes in the long term.
That means that credit rating advisory services help enterprises to ideally prepare for the rating process in order to reach the best credit rating possible. With credit rating thus having gained in weight to become a significant variable for firms, the rating practices by banks with their related assessment criteria open up a potential for credit rating advisory services. The result is a demand for consultancy in both the internal and external rating contexts.
While in internal rating, the consultancy aims at improving on and communicating one’s own strengths to be awarded better credit rating, in external rating the consultancy takes the form of active involvement during and after the rating process held by rating agencies.
As rating advisors, those consultants are referred to who prepare firms ahead of a rating procedure but do not perform the rating themselves, or undertake for the firm to score better next time once a rating grade has been awarded.
Summary of Chapters
1 Introduction: Provides background on market trends in the tax consultancy branch and defines the scope and objective of the thesis.
2 Objectives and Methodology: Outlines the research hypotheses, the methodological approach for empirical surveys, and the criteria for bank and consultant selection.
3 Desk Research: Reviews existing literature and foundational sources relevant to rating advisory and tax consulting in Germany.
4 Results: Presents the findings of the empirical surveys, evaluating the four hypotheses regarding regulation, qualifications, and market demand.
5 Discussion: Synthesizes the empirical results to discuss market challenges and the strategic restructuring of tax consultancy operations.
6 Conclusion: Summarizes the key insights for banks and tax consultants, affirming the potential for credit rating advisory services.
Keywords
Tax Consultants, Credit Rating, Advisory Services, Basel II, Empirical Survey, Market Potential, Rating Advisory, Soft Factors, Bank Rating, Professional Qualification, Consultancy Market, Financial Regulations, Client Management, Invoicing, Germany
Frequently Asked Questions
What is the fundamental focus of this research?
The work focuses on the integration of credit rating advisory services into the professional portfolio of tax consultants in Germany, assessing both the legal possibility and the commercial potential of such an expansion.
What are the central themes of the work?
The core themes include the regulatory framework for tax advisors, the identification of market demand for rating support, and the professional qualifications required to successfully advise clients in the context of Basel II and bank rating practices.
What is the primary objective or research question?
The central objective is to analyze whether credit rating advisory services are legally allowable for tax consultants, what qualifications are necessary, and whether there is an untapped market potential that tax firms can capitalize on.
Which scientific methods are utilized?
The research employs a combination of desk research and two major empirical online surveys—one targeting corporate customer consultants at banks and another targeting tax consultancies—using statistical weighting based on Federal state data.
What is covered in the main section of the paper?
The main section investigates the legal status of providing advisory services, explores existing qualification paths, and details the quantitative evaluation of survey data regarding bank rating habits and current service implementation by tax consultants.
Which keywords characterize this thesis?
The thesis is characterized by terms such as tax consulting, credit rating, Basel II, empirical research, market implementation, and professional qualifications.
How do banks generally react to external rating reports provided by tax consultants?
The survey results indicate that a majority of banks positively consider external reports, provided they meet certain quality standards, and often contact the tax consultant directly to obtain relevant data for the rating process.
Why does the author focus specifically on soft factors?
Soft factors are highlighted because they often shape the final rating grade and are more susceptible to influence through qualitative information provided by the tax advisor, as opposed to hard facts which are largely data-driven.
- Quote paper
- Dr. Thomas Laufer (Author), 2011, Research Overview Credit Rating Advisory for Tax Advisors, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/183264
