CFO, CEO, Finance Director, Managing Director, Head of Group Strategy etc. These are a handful of the high-level positions held by accountants in 21st century corporations. The accountancy profession is undergoing an exciting metamorphosis, one that does not seem to have an end. Not too long ago, accountants were known as book keepers as they were responsible for maintaining the financial records of the company, a mundane and unattractive task. Not too long ago, accountants played a non value-adding role since the task of reporting what has already been done rarely adds value to the company?...
Globalization is the impetus of change for the accountancy profession. Organizations are now venturing into a borderless corporate world, one whereby competition is extremely intense and the weak will be eliminated instantaneously. A speaker at the recent World Congress of Accountants said that accountants are now referred to as “Corporate Navigator” or “Guardian of the Business Model”. Accountants are now being relied upon to chart the path for the company in this turbulent environment. Accountants are given the mandate to ensure that the business is sustainable, that corporate objectives are realised, which will eventually lead to shareholder wealth maximization. Therefore, what are the pre-requisite skills needed to effectively discharge this leadership role?
Firstly, corporations are no longer interested in historical financial performance but instead are interested in the best course of action that should be pursued given the historical data. This is a significant shift for accountants because they are now required to occupy a strategic role, one that places them at the forefront of the company. Contemporary accountants need to possess sharp analytical skills because the onus is on them to critically assess the numbers to pinpoint trends and opportunities which can be capitalized upon to gain a competitive advantage. Accountants are expected to provide recommendations to the decision-makers on strategy and to have these supported by detailed financial analysis.
Secondly, an accountant in today’s corporate arena needs to possess value-adding capabilities which can elevate the performance of the company to greater heights. Therefore, it is imperative that the modern accountant identify areas which are vital to the success corporations and to be skilful in these particular fields. For example, corporate taxation is undeniably a complex subject but yet, it affects the bottom line (i.e. profitability) greatly. Hence, an accountant who is knowledgeable in tax laws and can apply such knowledge towards minimising the company’s exposure to tax will surely be much sought after. The International Financial Reporting Standards (IFRS) is also an area worth pursuing in light of the objective to achieve global convergence in financial reporting. Other areas accountants should also study are corporate governance frameworks and performance management.
Thirdly, sound technical skills alone do not make a good accountant but instead, these skills should be complemented by other “soft skills”. Most importantly, a 21st century accountant should possess a proficient oratory skill, which is the ability to speak convincingly in public. This is because CFOs/CEOs are required to make presentations to the Board of Directors and represent the company at the Annual General Meetings. Implicit in this is the requirement that an accountant should have a strong command of the English language to garner respect from business associates. However, given the rise of China as another economic superpower, proficiency in Mandarin is also a must for accountants. Good communication skills are needed as well because an accountant needs to coordinate the finance function with other functions such as sales, production, procurement etc. For example, discussions need to be conducted with the Sales Manager pertaining to sales strategy so that the accountant can ascertain how the strategy will eventually affect profitability.
In conclusion, it is obvious that the responsibility of the modern accountant now transcends beyond the preparation of financial statements. Accountants play a more matured role now by being involved in issues of strategic concern. Accountants are being looked upon by stakeholders to utilize their business acumen to steer the company to greater heights. To achieve this, accountants need to think out of the box because what the company needs is not one who can crunch numbers effectively, but rather, one who is able to look beyond those numbers and advise the decision-makers on what is best for the company’s bottom line.
by Lee Boon Siew