Transnational corporations (TNCs) have long considered transfer pricing as a key tax concern. If stability in transfer pricing is a necessary condition for dynamic cross-border trading, then recent financial reporting changes, updated transfer pricing guidelines, and new reporting requirements for uncertain tax positions are destabilizing influences that must be addressed by companies in order to mitigate their transfer pricing-related exposures and risk. This study reports the results of a survey of tax executives from the four countries comprising the Pacific Association of Tax Administrators (PATA), three of which have transfer pricing regulations based on Organisation for Economic Co-operation and Development (OECD) guidelines. The study seeks to explain how TNCs are managing their transfer pricing risks proactively in today's volatile environment, and if their actions are successful. Findings include contradictory evidence regarding audit risk reduction strategies recommended by tax authorities and the utility of those strategies in actually reducing corporate audit risk. These were surprising results, given that tax authorities and transfer pricing consulting firms tout certain transfer pricing agreements as the best way to mitigate transfer pricing audit risk. At best, are these agreements neutral relative to audit risk? At worst, are tax authorities using these agreements as a source of confidential data for possible future use in both transfer pricing and non-transfer pricing audits?

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