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A Relevant Accountancy Profession

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Presentation by IFAC Professional Accountants in Business Committee member on the profession.

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A Relevant Accountancy Profession

  1. 1. Page 1 | Proprietary and Copyrighted Information A Relevant Accountancy Profession Sanjay Rughani CEO, Standard Chartered Bank Tanzania Deputy Chair, IFAC Professional Accountants in Business Committee NBAA 2 December 2016
  2. 2. Page 2 | Proprietary and Copyrighted Information Agenda • The economic and business environment that we face • What are we trying to achieve? • A profession contributing to sustainable development • A profession catching up to a new paradigm - Integrated thinking and reporting • Technology and effective risk management • What does it mean for PAIBs? • IFAC and the development of the profession • Communications and leveraging our influence
  3. 3. Page 3 | Proprietary and Copyrighted Information • Global, regional, and local economic pressures, including: – Sustainable development agenda – Post-Brexit IMF global growth downgrade; – China deceleration, commodity prices, weighing on developing countries – Political uncertainty • Continued concern of threat of significant failures of companies & econonmies • Response: more regulation of governance, reporting, assurance Recent Global Outlook
  4. 4. Page 4 | Proprietary and Copyrighted Information The Issues Facing Business – The Perfect Storm Globalisation Talent Technology / Digitisation Urbanisation Societal expectations / Regulations Environmental resource constraints
  5. 5. Page 5 | Proprietary and Copyrighted Information Leveraging the Experience of the PAIB Committee Leverage the IFAC PAIB Committee which helps to: • Share knowledge, ideas, experiences • Create effective connections between IFAC and PAOs on PAIB matters • Build capacity of IFAC and wider PAIB community • Deliver greater value to participants • Utilize the Report of the PAIB Committee Meetings and Actions for PAOs; see http://www.ifac.org/about- ifac/professional-accountants-business
  6. 6. Page 6 | Proprietary and Copyrighted Information What Are We Working Towards? Work towards better public sector and business – trusted for a better society PAIBs with credibility and visibility in their organisations PAIBs and professionalism seen as helping organisations respond to the challenges they face
  7. 7. Page 7 | Proprietary and Copyrighted Information A Profession Contributing to Development The Sustainable Development Goals The 2030 Agenda for Sustainable Development: A Snapshot of the Accountancy Profession’s Contribution - Publication out. “It is important for our profession to be conscious of how we contribute, both directly and indirectly, to the Goals. The skillset, experience, and influence professional accountants possess gives them enormous scope to shape solutions to sustainable development challenges.” IFAC CEO, Fayez Choudhury
  8. 8. Page 8 | Proprietary and Copyrighted Information • Boost the talent pool • Contribute to societal goals, e.g., financial literacy • Enable equal access to the profession Example Goal 4: Quality Education
  9. 9. Page 9 | Proprietary and Copyrighted Information • Accountancy linked to prosperity and improved living – Nexus 2: The Accountancy Profession—A Global Value Add • Quality accounting professionals contributing to economic growth on a sustainable basis • Commitment to build capacity of the profession Example Goal 8: Decent Work and Economic Growth
  10. 10. Page 10 | Proprietary and Copyrighted Information • Advocate for good governance focused on smart regulation, rule of law, and well functioning national institutions • Enhance the capacity of accountants to contribute their expertise to implementing governance and controls that hinder fraud, corruption, and money laundering Relevant for Africa – Key Areas Include… SDGs
  11. 11. Page 11 | Proprietary and Copyrighted Information • Promote the importance of external public sector auditing in monitoring and reporting on national efforts to implement the SDGs and their targets • Accelerate efforts to influence and drive sound public sector governance and financial management • Facilitate the profession’s contribution to integrated reporting as a means to rebalance economic and capital market decision making in favor of long-term value creation and investment Relevant for Africa – Key Areas Include… SDGs
  12. 12. Page 12 | Proprietary and Copyrighted Information Credit: The New Yorker Sustainable Organizations, Markets, Economies Sustainable Organizations, Markets, Economies
  13. 13. Page 13 | Proprietary and Copyrighted Information The Profession Catching Up to a New Paradigm Source: OCEAN TOMO LLC January,1,2015
  14. 14. Page 14 | Proprietary and Copyrighted Information Pacioli created a lens through which a business and its performance could be viewed and a way to hold its owners to account. While Pacioli’s focus was purely financial, Mervyn King spearheaded a multi-capital approach to reflect how value is created in a knowledge-based resource constrained global economy. —Paul Druckman, Financial Management, March 2016 From Pacioli to King
  15. 15. Page 15 | Proprietary and Copyrighted Information • Integrated Reporting an opportunity to – Create value (internal benefit) – Tell the story (external benefit) • Key themes – Integrated thinking through a shared understanding of strategy and how value is created throughout the organization with fewer silos – A multiple capitals approach to make decisions about resource allocation and value creation over time Integrated Reporting – Communicating Value Creation
  16. 16. Page 16 | Proprietary and Copyrighted Information IFAC publication: • Vision and Framework for Integrated Thinking • Explores contribution of finance professionals - enabling the business partner agenda • Ensures a focus on the information and decisions that matter to the organization and its potential success • Enhances the relevance of finance professionals Creating Value with Integrated Thinking
  17. 17. Page 17 | Proprietary and Copyrighted Information Public company reporting has become so complicated that what matters to investors can get lost. Our priority is to provide meaningful information that all investors can readily access. For investors to make investment and voting decisions, we don’t believe that more information is necessarily better. Instead, we’ve challenged ourselves to provide better information… —Jeff Immelt, GE 2015 Integrated Summary Report <IR> – Telling the Story
  18. 18. Page 18 | Proprietary and Copyrighted Information • A profession engaged and connected • Exchanging ideas, knowledge and experiences • Sharing resources • Get involved: – Quarterly webinars – Network webpage http://www.ifac.org/about-ifac/professional- accountants-business/integrated-reporting-pao-network • Lead contact Michael Nugent – michaelnugent@ifac.org <IR> Network for Professional Accountancy Organizations
  19. 19. Page 19 | Proprietary and Copyrighted Information Tech Impacting Business & the Finance Function • PAIB Committee discussions covering – Technology, outsourcing, finance business partnering, talent management & career pathways • Tech driving massive change & challenging relevance to business – Automation of roles – Competition for PAIB space – risk, data scientists etc – Impact on finance functions and career pathways • PAO implications – providing members with relevant skills
  20. 20. Page 20 | Proprietary and Copyrighted Information Technology and Digital Capability • Pace of change dramatic (iPhone introduced in 2007) • SoMoClo – Social, mobile, cloud • Artificial intelligence and robotics leading to automation • Internet of things driving data, analytics, insights • E.g., Standard Chartered
  21. 21. Page 21 | Proprietary and Copyrighted Information From Bolt-on to Built-in – Effective Approach to Risk • Managing Risk as an Integral Part of Managing an Organization • From bolt-on to built-in: fully integrating management of risk into our organizational planning & control cycles • Establishing risk management capabilities of PAIBs to achieve organizational objectives
  22. 22. Page 22 | Proprietary and Copyrighted Information What does it mean for PAIBs? A Relevant Profession
  23. 23. Page 23 | Proprietary and Copyrighted Information • Shifting emphasis from maximizing profits for shareholders to maintaining value creation in a sustainable manner • Professional accountants as chief value officers can facilitate an understanding of value creation in an organization Chief Financial Officer to Chief Value Officer
  24. 24. Page 24 | Proprietary and Copyrighted Information An Evolution for the Finance Function – Financial Reporting to Integrated Reporting My main task is only to make sure the numbers are right. My main task is to make sure numbers make sense. My main task is to manage information flows. My main task is to explain how we create value with our capitals. My main task is to make sure we think integrated.
  25. 25. Page 25 | Proprietary and Copyrighted Information Delivering Value to Organizations • PAIBs need to build on their deep financial acumen by developing skills and competencies needed • Helping us to – Apply our professional qualities in complex and uncertain environments – Be strategically aware and with business understanding to enable our effective contribution to the achievement of business objectives – Engage in emerging areas such as Integrated Reporting, managing uncertainty and risk, and performance management & analytics • Engage IFAC, PAFA and NBAA for support
  26. 26. Page 26 | Proprietary and Copyrighted Information IFAC and the Profession The Development of the Profession
  27. 27. Page 27 | Proprietary and Copyrighted Information IFAC Overview Strengthening Organizations, Advancing Economies
  28. 28. Page 28 | Proprietary and Copyrighted Information Strengthening Organizations, Advancing Economies IFAC Member Bodies IFAC Associates PAO established No PAO The Profession in Africa
  29. 29. Page 29 | Proprietary and Copyrighted Information PAO Capacity Building IFAC has a long history of building capacity and strengthening professional accountancy organizations (PAOs). Well-equipped PAOs ensure a sustainable supply of professional accountants that support high-quality accounting practices and financial information in both the public and private sectors. We are focused on continuous engagement with the profession in Africa. Together, we can ensure that the profession is relevant in the context of the fast-changing world around us. Through collaboration and sharing of knowledge and experiences, our collective leadership will ultimately help Africa deal with the challenges of sustainable development.
  30. 30. Page 30 | Proprietary and Copyrighted Information PAO Capacity Building Engaging Professional Accountants in Business: How to Build a More Relevant PAO and Profession - Publication out as part of PAO Capacity Building Guidance Series - Capacity Building Program supporting the development and growth of PAOs around the world including managing peer-to-peer projects to support PAOs including in Ghana, Rwanda, and Uganda using a grant from the UK Department for International Development
  31. 31. Page 31 | Proprietary and Copyrighted Information Communications and Leveraging our Influence • To support a strong profession with a powerful voice in areas including – Combatting fraud and corruption – Beyond financial reporting – Fairness in corporate taxation – Encouraging high quality and smart regulation – Sound public and private sector governance and financial management – Contribution of professional accountants to sustainable organizations, markets and economies
  32. 32. Page 32 | Proprietary and Copyrighted Information • www.ifac.org/gateway • News, views, resources, thought leadership, Knowledge Sharing • Leverage the Gateway! IFAC Global Knowledge Gateway Register on the Gateway to: • Get The Latest, a customizable update sent 2x per month • Join & initiate discussions • Recommend viewpoints & discussions • Suggest new content
  33. 33. Page 33 | Proprietary and Copyrighted Information Questions
  34. 34. www.ifac.org

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