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'Do
accountants earn their corporate keep?: The future role of the financial
function
"It has
been argued that the future success of many enterprises is in the
hands of accountants and their ability to service the information
needs of their non-financial colleagues. This requires them to look
outwards and forwards rather than being pre-occupied with the past
- retrospective introspection.
Can our future
economic success be achieved through the 'power house' of top-down
strategic control or the traditional 'counting house' approach of
financial management? Alternatively, might it come through an information-rich
process of business planning, decision support and financial control?
"How do
Chief Finance Officers (CFOs) contribute to re-structuring their
roles (and the organisation of their departments) in order to meet
the changing requirements of a dynamic world? What allowances are
being made by CFOs to accommodate changes in regulatory procedures,
globalisation, shareholders' expectations, risk factors and Information
& Communication Technology (ICT)?"
Although the
fallout from Enron and a number of other audit-centred problems
might be giving the public face of accounting a bit of a bashing
in the media at the moment, the influence and status of the finance
function within organisations continues to rise. As economic life
becomes more dependent on knowledge, accountants are in a unique
position to shape the strategic development of information systems;
thereby ensuring that knowledge is gained, codified, stored, disseminated
and applied to bring the greatest competitive advantage.
Of course,
the traditional roles of financial reporting, stewardship, management
accounting and financial management are still important and will
continue to be so. However, whilst each aspect is in itself becoming
more sophisticated - some might say simply more complex! - there
is also a tendency for such activities to become an integral part
of organisational processes, rather than purely the domain of specialists.
Some parts are even being reduced to non-strategic status and conveniently
outsourced, along with catering and vehicle management.
But all is
not doom and gloom: as the pace and complexity of business life,
consumer markets and society change, new opportunities are opening
up. The long-standing professional status of accountants reinforced
by the formal code of behaviour that governs the working lives of
the members of the professional bodies, is enabling them to play
a leadership role in forging ethical strategies, rather than just
the traditional responsibility of acting as the conscience of the
business.
You may not
agree with some of the above. Perhaps the role of finance is changing
much faster and more profoundly in your organisation. Conversely,
you might have noticed less change, or feel that too much change,
too quickly, might be unwelcome. In moving away from the 'nuts and
bolts' of accounting, there may be a danger of practitioners losing
their key focus and with it their principal raison d'etre. Maybe,
it is time to take the lead in change or risk becoming moribund.
Do you want
to be a general business manager who happens to have a background
discipline? Or do you see other more general qualifications such
as MBA's as a threat to the profession now that much of the traditional
techniques and processes can be taken over by software packages?
What you think? Is the accounting profession a glass half full or
half empty? What does the future hold?
These are just
some of the questions and issues that are presently occupying the
professional accounting bodies as they seek to design strategies
and syllabi to foster the development and marketability of their
members and students. Of course, there are many other areas of concern
and opportunity and to a large extent it will be the views of non-accountants
as 'customers' for accounting information who will ultimately decide
whether or not accounting, as practiced by specialists, adds value
to organisations.
This article
marks the start of an ACCA supported research project designed to
discover how the role of finance is presently changing and what
the future might hold in terms of both opportunities and threats.
A questionnaire is in preparation to discover the existing nature
and range of structures of the finance role within diverse organisations
of the UK. As well as filling in gaps in other recent surveys, we
are seeking out practices to evaluate through a range of linked
studies. The understanding by accountants of emerging management
practices will be investigated as will the nature of support that
accountants presently provide and should provide in the future.
The survey also queries the level of financial literacy of managers
to understand the outputs from the accounting information systems.
To capture
the widest range of views an interactive web site has been set up
at www.role-of-finance.com together with a discussion board hosted
by 'acca-comunities'. These will attract visitors by links from
other web sites, e.g. accaglobal.com and through web-based search
engines and articles written for journals and magazines as the project
proceeds.
The web site
will provide a forum and a link through which questions can emerge.
Accountants and managers will be able to interact directly with
the project by contributing ideas/thoughts through a managed discussion
board. It is intended to establish a following not just of practising
accountants and managers but also for academics, students and other
interested parties. From this base continual information can be
generated in a more structured manner through an emergent series
of electronic questionnaires.
Concurrently
face-to-face interviews will be held with major employers, initially
within the East Midlands, and it is intended that this strand of
the project will lead to the development of a number of case studies.
Through these interviews/case studies a base line will be established
and a stronger feel for the pressures for change, the likely pattern
of change, and the probable timing of change within leading-edge
organisations.
Position statements
will be posted to the web site at frequent intervals to inform visitors
and stimulate further interaction and issues for discussion. Please
visit the site and register your views.
William D. Murphy - Principal Lecturer, The Derbyshire Business
School
Ian P. Herbert FCMA - Lecturer, Loughborough University Business
School
Richard M.S. Wilson FCCA FCMA - Professor of Business Administration
&
Financial Management, Loughborough University Business School
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