SINGAPORE, Oct 10 — Post-crisis, accountants who believe their job is solely about counting beans and making sure the balance sheet balances will do so at their own peril.
As the operations and strategies of firms become inextricably linked with numbers and finance, accountants need be more than number crunchers, Tony Osude, the Association of Chartered Certified Accountants' (ACCA) acting director of professional development, told an ACCA conference yesterday.
“In our interviews with chief financial officers, I am getting a sense of frustration from them that accountants are not stepping up to act as the companies' business partners,” said Osude.
As businesses become increasingly pressed for solutions in a credit-scarce environment, it has become crucial to bridge the gap between practical business knowhow and financial acumen.
Research done for the latest ACCA Accountants for Business report found that some business leaders are beginning to consider training business personnel in finance to bridge that gap, instead of turning to accountants for counsel.
“This has quite significant and severe implications for the accounting profession,” Osude warned yesterday.
In the survey, the finance director of a venture capital fund management firm had said: “A bad accountant will produce a set of numbers. A good accountant will say there is a set of numbers, use a bit of analysis and provide a description of what it means for the business.”
Even when accountants do offer analysis of the business, the bar has been raised. “Accountants are very good at cutting costs but very poor at driving profits,” Osude said.
“European companies, for example, have been doing a lot of cost-cutting and the figures look OK. But what will happen next year when there are no more costs to cut?”
As part of a seismic shift in accounting approaches caused by the downturn, if cash was king before, it is now supreme ruler. “The past few months have been about cash, cash, cash. All the accountants we interviewed said that in terms of strategy, they are not looking beyond the next month,” Osude revealed.
Across the landscape of accountants, some sand dunes dwarf others. The report found that 65 per cent of respondents placed the CFO within the top five finance roles that add the most value to organisations, compared with 22 per cent for financial accountants and 18 per cent for heads of risk management.
While all the implications of such numbers are not immediately clear — Osude conceded that respondents could merely have taken a hierarchical view to answering the question — one implication is certain.
“There is too much riding on the shoulders of the CFO — he is doing too much,” said Osude.
The survey also unearthed a growing need for effective finance information technology systems, so the accountant spends less time bound to his spreadsheet and more time analysing the final numbers.
A partner from one of the Big Four accounting firms is quoted in the report as saying: “What we've found is that they spend so much time producing the number . . . and reworking and re-crunching it. . . They collapse it into the meeting not even having thought what the number means.”
The survey was conducted online with 1,353 ACCA members from more than 170 countries. — Business Times Singapore
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