What's next for accountancy?

By Neil Stevenson, executive director – Brand, ACCA

We’ve already heard a little about ACCA’s new global forums on the blog following their inception, but the past week or so has seen the global forums kick off in earnest, so it’s time for an update. Last week, I was at the Global Forums Symposium, which saw chairs of our global forums coming together to share their thoughts on the issues that’ll be confronting the accountancy profession over the coming months.

Handily, our discussions can be boiled down to ten themes:

1. Global economic uncertainty. Nearly five years since the beginnings of the global financial crisis, the veil of global economic uncertainty is still hanging over business decision-making. The Eurozone has its sovereign debt crisis, while high-growth markets are continuously outstripping their more developed cousins, who are experiencing tepid growth at best. Many companies are back to reducing costs and trying to increase cashflow; debt is returning at the expense of equity; uncertainty is leading to temporary business structures as companies try to stay on their toes. Uncertainty abounds in other ways: political uncertainty; energy, commodities and food prices; fast developments in the IT sector including the arrival of the cloud. Invest? Don’t invest?
2. Audit. Audit is under plenty of regulatory scrutiny around the world. The profession needs to demonstrate public value in everything we do to maintain public confidence and trust in audit, as part of a broader theme of demonstrating the value we bring to business and investors. We need regulation which meets the public interest, of course, but which also works for business and enhances investor confidence.
3. Complexity. This is a huge issue for all our global forums and the forum chairs highlighted the problems they experience working with constant regulatory changes. Bringing clarity to the debate and championing simplification can lead to improved business agendas.
4. Different directions for small and large company regulation. While regulation gets more complex for the biggest companies, governments respond to the pressures on small businesses by cutting regulation and things seen as ‘red tape’ – including accounting requirements. How do accountants, who have to be ready to work with businesses of every size, respond to the diverging needs of large and smaller businesses?
5. Accountants add value. The forum chairs agreed that highlighting ways for accountants to improve the performance of their organisations and clients is a big opportunity for the profession. The role of the accountant, in whatever sector, should bring value and we feel we can do much to champion the roles professional accountants in doing better business.
6. The principle of principles. As regulation gets tougher, a principles-based approach to regulation gets harder to apply – stricter regulation often means stricter rules. A principles-based approach to regulation needs defending: you can get around a rule, but you can’t get around a principle.
7. Sustainability still matters. Sustainability issues remain vital to businesses, especially as the world’s natural resources become scarcer and more expensive. Whether it’s finding benefits at the bottom line or ensuring a more sustainable strategy is adopted within the business model itself, sustainability should become a permanent concern in the role of the accountant.
8. The investor and reporting. The investor community is the most important audience for financial reports but it doesn’t always seem that way when you read a report. Making sure reports focus on the investor and comply with numerous regulatory demands is a big challenge for accounts preparers (incidentally, our recent report on the importance of corporate reports for investors is here). Integrated reporting could be a means of re-engaging investors.
9. The public sector. Public finances are under pressure all around the world and accountants will play a crucial role in the sustainable and effective management of public finances and delivery of public services.
10. Fraud. Many businesses, including SMEs, are experiencing increasing trouble with fraud, especially online. This is putting small businesses off potentially lucrative online trading, which is seen as not worth the risk. How do accountants help businesses mitigate risks around fraud and corruption and ensure ethics lie at the heart of business?