This document summarizes Sanjay Rughani's presentation on the accounting profession. It discusses the economic environment, sustainable development goals, integrated reporting, technology impacts, and IFAC's role in developing the profession. Key topics included how accountants can contribute to sustainable organizations through skills like integrated thinking, managing risks as an integral part of business, and evolving from financial reporting to understanding multiple capitals and value creation over time.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face.
The Institute of Chartered Accountants of the Caribbean (ICAC) and IFAC held a joint workshop on June 21, 2017 in Guyana with representatives from 10 professional accountancy organizations in the region. Participants gathered together with the twin objectives of examining the role of the accountant in a changing world along with the trends (technological, economic, social, etc.) impacting the profession and tomorrow’s accountant as well as to discuss the challenging issues facing the accountancy profession and the future-readiness of today’s accountant and professional accountancy organizations.
International Accountancy Education Standards Board Member Dr. Sidharta Utama spoke during the Association of Chartered Certified Accountants (ACCA) Regional Education Conference in Singapore in September 2017 and discussed IAESB initiatives on developing professional accountants’ information and communications technology skills and competency.
The Institute of Chartered Accountants of the Caribbean (ICAC) and IFAC held a joint workshop on June 21, 2017 in Guyana with representatives from 10 professional accountancy organizations in the region. Participants gathered together with the twin objectives of examining the role of the accountant in a changing world along with the trends (technological, economic, social, etc.) impacting the profession and tomorrow’s accountant as well as to discuss the challenging issues facing the accountancy profession and the future-readiness of today’s accountant and professional accountancy organizations.
In this webinar, IPSASB Technical Director John Stanford and IPSASB Principal Paul Mason provide an introduction to IPSAS 40, Public Sector Combinations, including the project history, key definitions, approach to classification of combinations, and key changes since the Combinations Exposure Draft.
On May 18, 2016, IAASB Chairman Prof. Arnold Schilder presented "The IAASB's Work to Enhance Audit Quality" to the Standing Advisory Group of the US Public Company Accounting Oversight Board in Washington, D.C.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face.
The Institute of Chartered Accountants of the Caribbean (ICAC) and IFAC held a joint workshop on June 21, 2017 in Guyana with representatives from 10 professional accountancy organizations in the region. Participants gathered together with the twin objectives of examining the role of the accountant in a changing world along with the trends (technological, economic, social, etc.) impacting the profession and tomorrow’s accountant as well as to discuss the challenging issues facing the accountancy profession and the future-readiness of today’s accountant and professional accountancy organizations.
International Accountancy Education Standards Board Member Dr. Sidharta Utama spoke during the Association of Chartered Certified Accountants (ACCA) Regional Education Conference in Singapore in September 2017 and discussed IAESB initiatives on developing professional accountants’ information and communications technology skills and competency.
The Institute of Chartered Accountants of the Caribbean (ICAC) and IFAC held a joint workshop on June 21, 2017 in Guyana with representatives from 10 professional accountancy organizations in the region. Participants gathered together with the twin objectives of examining the role of the accountant in a changing world along with the trends (technological, economic, social, etc.) impacting the profession and tomorrow’s accountant as well as to discuss the challenging issues facing the accountancy profession and the future-readiness of today’s accountant and professional accountancy organizations.
In this webinar, IPSASB Technical Director John Stanford and IPSASB Principal Paul Mason provide an introduction to IPSAS 40, Public Sector Combinations, including the project history, key definitions, approach to classification of combinations, and key changes since the Combinations Exposure Draft.
On May 18, 2016, IAASB Chairman Prof. Arnold Schilder presented "The IAASB's Work to Enhance Audit Quality" to the Standing Advisory Group of the US Public Company Accounting Oversight Board in Washington, D.C.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Hysen Cela, President, Institute of Authorized Chartered Auditors of Albania.
Presentation by Stathis Gould at The 6th Annual Symposium on Sustainable Business Non-Financial and Integrated Reporting, Baruch College, November 1, 2013
Presentation by Vincent Tophoff, Senior Technical Manager, IFAC, for the Institute of Internal Auditors International Conference, in Vancouver, Canada, July, 5-8 2015.
This study gives insights on the implementation as well as internal and external facilitators of integrated reporting in companies. The joint research project of CCR and the University of Leipzig was sponsored by Clariant.
Presentation given by Helen Brand, Chief Executive, Association of Chartered Certified Accountants (ACCA) on integrated reporting during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
Presentation by Prof. Alexandra Watson, the College of Accounting, University of Cape Town, on integrated reporting and the evolution of the issue and practice in South Africa given at the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Ken Siong, Technical Director, International Ethics Standards Board for Accountants.
We look forward to discussing your needs and interests in IPSAS in the coming months. You can contact me email Mark at m.neal67@ahoo.com Or +1 780-297-9569
Presentation by Graham Terry, Senior Executive: Strategy and Thought Leadership, the South African Institute of Chartered Accountants, given during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
Prof. Mervyn King's presentation on integrated reporting during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
An opportunity to give the ADG of AG and his senior managers a better understanding of IPSAS and its benefits and why they have an important role in the Project.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Hilde Blomme, Deputy Chief Executive, Accountancy Europe.
In collaboration with KPMG, the IIRC has developed a slide deck that helps investors understand what Integrated Reporting can mean for them and why they should be encouraging businesses to adopt it. It takes them through the evidence in support of Integrated Reporting and addresses some common misconceptions.
Presentation by Beverley Bahlmann, Senior Technical Manager, IAASB, for American Accounting Association, International Accounting Section, Midyear Meeting, February 19, 2016 in New Orleans, LA, USA
The IPSASB has created a two-part webinar on financial instruments. It was prepared and presented by Lucy Qi, the technical staff member responsible for the IPSASB’s Financial Instruments Update project.
Part A of the webinar covers the classification and measurement, as well as impairment of financial instruments.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Hysen Cela, President, Institute of Authorized Chartered Auditors of Albania.
Presentation by Stathis Gould at The 6th Annual Symposium on Sustainable Business Non-Financial and Integrated Reporting, Baruch College, November 1, 2013
Presentation by Vincent Tophoff, Senior Technical Manager, IFAC, for the Institute of Internal Auditors International Conference, in Vancouver, Canada, July, 5-8 2015.
This study gives insights on the implementation as well as internal and external facilitators of integrated reporting in companies. The joint research project of CCR and the University of Leipzig was sponsored by Clariant.
Presentation given by Helen Brand, Chief Executive, Association of Chartered Certified Accountants (ACCA) on integrated reporting during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
Presentation by Prof. Alexandra Watson, the College of Accounting, University of Cape Town, on integrated reporting and the evolution of the issue and practice in South Africa given at the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Ken Siong, Technical Director, International Ethics Standards Board for Accountants.
We look forward to discussing your needs and interests in IPSAS in the coming months. You can contact me email Mark at m.neal67@ahoo.com Or +1 780-297-9569
Presentation by Graham Terry, Senior Executive: Strategy and Thought Leadership, the South African Institute of Chartered Accountants, given during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
Prof. Mervyn King's presentation on integrated reporting during the International Federation of Accountants’ Council Seminar, A Fundamental Shift in Corporate Reporting.
An opportunity to give the ADG of AG and his senior managers a better understanding of IPSAS and its benefits and why they have an important role in the Project.
IFAC and the World Bank Centre for Financial Reporting Reform hosted a joint Regional Small- and Medium-sized Practices (SMP) Forum for Europe and Central Asia on May 31 in Vienna, Austria.
The Forum provided the opportunity to discuss addressing the challenges and opportunities SMPs and medium-sized entities (SMEs) face. This is a presentation by Hilde Blomme, Deputy Chief Executive, Accountancy Europe.
In collaboration with KPMG, the IIRC has developed a slide deck that helps investors understand what Integrated Reporting can mean for them and why they should be encouraging businesses to adopt it. It takes them through the evidence in support of Integrated Reporting and addresses some common misconceptions.
Presentation by Beverley Bahlmann, Senior Technical Manager, IAASB, for American Accounting Association, International Accounting Section, Midyear Meeting, February 19, 2016 in New Orleans, LA, USA
The IPSASB has created a two-part webinar on financial instruments. It was prepared and presented by Lucy Qi, the technical staff member responsible for the IPSASB’s Financial Instruments Update project.
Part A of the webinar covers the classification and measurement, as well as impairment of financial instruments.
James Gunn, Managing Director, Professional Standards, addresses the 6th Brazilian Conference on Accounting and Independent Auditing June 13, 2016, in Sao Paolo, Brazil.
The IPSASB has created a two-part webinar on financial instruments. It was prepared and presented by Lucy Qi, the technical staff member responsible for the IPSASB’s Financial Instruments Update project.
Part B covers hedge accounting.
Presentation by Zulmir Ivânio Breda, Vicepresidente Técnico del Consejo Federal de Contabilidad, for SMO Workshop, February 13, 2016, in San Jose, Costa Rica.
This presentation covers the essential concept of ensuring all promotional communications are on label and the safe harbors established by FDA for disseminating off-label information compliantly.
Presentation by Dawn McGeachy, Member, IFAC SMP Committee at the International Federation of Accountants & Institute of Chartered Accountants of Jamaica Business Development Conference, March 18, 2014
Presentation by the chair of the IFAC Small and Medium Practices Committee in January 2012 at the Institute of Chartered Accountants in India International Conference.
Presentation given by Szymon Radziszewicz, IFAC Senior Technical Manager, during a seminar on the IFAC and the accountancy profession at the Philippines Institute of Certified Public Accountants.
A decade before we literally relate finance to the banking sector. The import and quality of finance has transformed and has been evolved dramatically by the period. This is primarily due to technology integration and evolution of myriad hues of financial structures and domains globally. Modrika helps you to take at the ground layer of these domains and sub domains. Thus, it helps you to get deeper perception of the financial complexity, giving you financial wisdom and enlightenment to attractive and accomplish meteoric career.
Presentation given by Szymon Radziszewicz, Senior Technical Manager for the International Federation of Accountants, on the need for a balanced approach to regulation of the accountancy profession and how the accountancy profession contributes to economic stability and growth, at the 6th Cross-Border Meeting In Moldova in June 2012.
Presentation by Vincent Tophoff, IFAC Senior Technical Manager at the INTOSAI Subcommittee on Internal Control Standards Annual Meeting, May 27-28, 2014
IFAC hosted the webinar State-Owned Enterprises (SOEs) & Professional Accountancy Organizations (PAOs) in Public Financial Management (PFM) Reform: Recovery Post COVID-19, in collaboration with the World Bank Group MENA Governance Global Practice, and the Arab Federation of Accountants and Auditors (AFAA). This joint webinar explored PFM reform issues and challenges – as well as strengths and opportunities – for SOEs & PAOs throughout the MENA region.
Presentation from the webinar "State-Owned Enterprises & Professional Accountancy Organizations in PFM Reform: Recovery Post COVID-19" (August 11, 2021).
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Presentation by Vincent Tophoff, Senior Technical Manager, IFAC, at the Interagency Council on Enterprise Risk Management, in Washington, DC, January 20, 2015
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Experts from the International Auditing and Assurance Standards Board (IAASB), the European Commission (EC), the Committee of European Audit Oversight Bodies (CEAOB), assurance service providers, investors and the business community met to discuss the regulatory, policy and standard-setting path toward high-quality sustainability assurance.
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A Relevant Accountancy Profession
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Page 12 | Proprietary and Copyrighted Information
Credit: The New Yorker
Sustainable Organizations, Markets, Economies
Sustainable Organizations, Markets, Economies
13. Page 13 | Proprietary and Copyrighted Information
The Profession Catching Up to a New Paradigm
Source: OCEAN TOMO LLC
January,1,2015
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. 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. 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. 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. 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. 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. 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. 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. Page 22 | Proprietary and Copyrighted Information
What does it mean for
PAIBs?
A Relevant Profession
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. 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. 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. Page 26 | Proprietary and Copyrighted Information
IFAC and the
Profession
The Development of the Profession
27. Page 27 | Proprietary and Copyrighted Information
IFAC Overview
Strengthening Organizations, Advancing Economies
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. 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. 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. 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. 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. Page 33 | Proprietary and Copyrighted Information
Questions
The Sustainable Development Goals – turning these into national policy initiatives will impact business. The Goals represent an agenda for people, planet, and prosperity that will guide the actions and financing decisions of governments and business. They are putting into the spotlight the need for responsible business through accountable governance and accountable relationships as a fundamental premise of capital and financial markets.
This sustainable development agenda is in the context of low growth. Brexit has global economic implications – every medium term forecast is expecting a slow down in 2017 and despite indicators showing continued growth of the UK economy now, partly because of the drop in the £, next year and 2018 has to present challenges. The sustainable development agenda must be viewed as a business opportunity to innovate and improve value creation over time.
Interest rate policy divergence between USA and the rest of the western world – expected rising in Fed interest rates vs. continued cuts to zero and negative interest rates in the other western economies – EU, UK, etc over the next 6 months will present challenges but also what innovations in financial products for business might this drive.
Quant Easing – what is going to be the long term effect of all this QE – where is the new normality and when will it emerge. Such large scale QE has never been done before, never seen such large scale interventions – the latest QE by the BoE has significantly increased UK national debt.
The next Uber disruptor – heavy expectations are that the most significant of these, again a next generation, will emerge from the UK high tech centre in the lower part of North London – where else are these hot spots and how can conventional business models adapt and prepare better for the wave of the unexpected. This is a big wave than we have seen at any point in time since the Spinning Jenny and Jethro Tull
The Middle East and Gulf countries of course have specific challenges at this time with a challenging environment for economic growth and government spending.
More broadly, the role of professional accountants in business and finance leaders in particular is more expansive, involved and complex because the business world is increasingly complex. We experiencing constant regulatory change, and the speed of technological change is mind-boggling. The trends and issues facing are things that we have to help our organizations respond to.
Twenty years ago, personal computers were becoming small and affordable enough for families to buy for home use. Ten years ago there were no iPads… iPhones… or social media. IBM’s Watson computer—just an idea less than 10 years ago—can now diagnose cancer faster than any human. Anyone with a smartphone has more computing power than NASA did in 1985.
Technology will be increasingly woven into the fabric of our profession. Professionals and firms must become experts in order to ensure relevance. We’ll need to advise clients and employers on technology tools, and leverage them to our advantage.
Impact of digital world is bringing about major structural change through greater mobile technology, connectivity and volumes/speed of data. The world’s stock of data is doubling every 20 months while the number of internet-connected devices has reached 12bn and mobile phone payments are expected to exceed $1trn by 2017.
McKinsey identified 12 disruptive technologies which could have potential impact of $14-33trn per year in 2025. These developments facilitate a data-driven and technological era of business – leading to new business models and creating greater potential for customisation.
For accountants, digitisation and disruptive technology are key challenges for their role in organizations. Other key trends include ‘trust in business’, need for better regulation, and attracting talent.
In terms of the Middle East, some of these trends and issues present specific challenges for business leaders and government:
Geopolitical risk and the impact on business and trade
Increasing regulatory and compliance requirements, and taxation, e.g., VAT
Creating jobs for the young
For governments:
Enhancing public financial management, including improved accounting and reporting arrangements, is essential to supporting more effective and efficient public services, increasing economic growth and minimising the incidence of fraud and corruption.
Accountants will have a significant role to play in helping the region to address weak accountability mechanisms and need for transparency.
The creative and innovative approach to our meetings enables the crowd-sourcing of knowledge, ideas and experiences for IFAC and the profession.
Impactful knowledge sharing of innovative practices in the organizations that committee members work for provides invaluable feedback and insights on emerging themes and trends.
Insights from the meeting then:
Feed into existing initiatives, shaping their direction
Transformed into outputs that are shared widely, including this meeting report and the Global Knowledge Gateway
Used to identify issues requiring further exploration at subsequent meetings, and by the profession
Our focus is on accountants facilitating better business and public sector – trusted for a better society
PAIBs/finance leaders seen as part of the solution
PAIBs with credibility and visibility in their organizations
Underlying message focused on PAIB relevance & skills
A public interest
About better reporting and management but there is a broader societal agenda. Time has gone where business can privatize wealth at the same time as allowing society to pick up the risks of negative impacts. All elements of society have to benefit from wealth creation.
A professional interest – we need to remain relevant to a changing business landscape and higher expectations
The profession catching up to a world where value is mainly the outcome of assets which are not on the balance sheet. Link to relevance.
The Most Important Determinants of Value
This graph shows the break up of the market capitalization of S&P’s top 500 US companies.
It shows that 40 years ago over 80% of market cap was explained by net assets in the f/s. Now that position has completely reversed less than 20% can be explained through the balance sheet.
What explains the rest? Other factors, such as relationships, intellectual and human capital, make up an increasing proportion of a company’s value. INSTEAD OF FOCUSING ON FINACIAL CAPITAL, <IR> INTRODUCED A MULTILE CAPITALS MODEL. SOME CALL THE DIFFERENCE INTELLECTUAL CAPITAL – <IR> BREAKS THAT DOWN SLIGHTLY DIFFERENTLY, BUT THE RESULT IS SIMILAR.
<IR> enables the clear and concise communication of value creation, allowing investors to evaluate how all relevant capitals that a business uses and affects are incorporated.
The IIRC is not trying to monetize everything (which is a common misperception), but rather is trying to ensure investors have the information they need to assess the ability of an organization to create value over time.
GE (General Electric)
Transformation to a digital industrial business model
“Shows investors GE through the lens of management”
Why are we interested in tech
Digitalization of economies is an opportunity and risk for the profession
PAIBs need new skills and competence around tech if they are to add value in this space
Tech innovation goes hand in hand with finance transformation and IR
Tech firms are competitors for millennials
SoMoClo build on each other and allow for easier interaction and accessibility
Financial tech that can have a significant impact on the way financial resources are accessed, moved and managed e.g., payment systems and mobile money
Innovation in data – capture, process, store, analyse, visualize, and share
AI and robotics leading to automation – impacting both finance but also how people do business and how value is delivered to customers
Internet of things – physical things and industrial processes connected to the internet
Example: American Express Business Travel, integrated solution
Cloud delivery model:
Scalable
Adaptable and flexible
Lower cost of ownership
From reporting to customer centric real time metrics and performance insights
Accounting and financials integrated in the system
Drill down on topics e.g., how technology impacting organizational business models and PAIBs
Future of work and / or future of learning and education
VT
Mervyn King is publishing a new book “Chief Value Officer”, which puts forward the role of CFO as changing from maximizing profits for shareholders to maintaining value creation in a sustainable manner. Mervyn is putting forward the CFO as now more of a value officer than a financial officer. Consequently, the CFO should be known as the Chief Value Officer. The basis of this perspective is:
The information and analysis they provide to support decisions needs to include a better, more expansive understanding of the disparate sources and drivers of longer term value to enable better strategy and implementation through changes to the business model.
Financial statements on their own are critical but not sufficient in discharging the board’s duty to be accountable.
Integrated thinking and reporting provides a way and an additional incentive for CFOs, and their finance teams, to focus on the information and the decisions that matter to the company and its potential success. Professional accountants as chief value officers can facilitate an understanding of value creation in a company.
How GENERALI the global insurance company describes its transition to Integrated thinking and reporting
PAIBs need to build on their deep financial acumen underpinned by accounting and analysis skills by developing professional skills and competences needed in terms of
Applying their professional qualities in complex and uncertain environments, This has implications for professional judgment, which is more important than ever, and ethical leadership
Strategic awareness and business understanding to enable their effective contribution to the achievement of business objectives
Feeling comfortable working in emerging areas such as in business reporting (e.g., <IR>), the integration of risk and control into governance and management systems, and performance management (e.g., big data)
Engage with the ICAP PAIB Committee for support and utilize resources such as the Global Knowledge Gateway.
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When you dig a little deeper, the map of Africa and professional accountancy organization (PAO) development really looks more like this.
As many of you are aware, there is a great deal of activity going on regionally in Africa—PAOs being established, PAOs mentoring each other, collaborating, cooperating, sharing knowledge.
For example, Ordre National des Experts Comptables et Comptables Agréés du Sénégal, which became an IFAC member in 2013, is helping L’Ordre des Experts Comptables agréés de Guinée in its capacity building and growth initiatives.
The Institute of Chartered Accountants (Ghana) worked hand in hand with Ordre National des Experts-Comptables et Comptables Agréés du Togo on its application with IFAC—resulting in ONECCA becoming an IFAC associate in 2013.
In all parts of the world this idea of like helping like is important to growth and development; this is certainly true in accountancy and certainly true in Africa.
But we also know there is more to be done and quite a few PAOs that need more help before they are ready to make the commitments embodied in the IFAC Statements of Membership Obligations.
And there are countries in Africa who don’t yet have an established PAO—where the accountancy profession is still in fledgling stages.
All of which is to say, at IFAC, we are fully aware of the growth and development already going on in Africa. Your regional body, PAFA, also has as one of its strategic objectives, the need for PAO capacity building, and is working with PAOs to facilitate adherence to the IFAC SMOs. We encourage PAOs to become members/associates of PAFA in preparing for membership of IFAC.
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Knowledge sharing enabled by the IFAC Global Knowledge Gateway, a platform designed to bring together news, views, resources, and thought leadership for the worldwide accountancy profession – launched in 2014 and for use by PAOs.
The Gateway allows professionals to
access resources from around the world
learn about emerging areas of the profession
stay connected to the most pressing accountancy issues and news of the day
interact by exchanging views, making recommendations, and sharing information and resources.
Ten topic areas:
Business reporting
Ethics
Financial leadership & development
Governance
Performance and financial management
Risk management & internal control
Sustainability
Audit & assurance
Practice management
Islamic Finance
The Latest is a bi-weekly newsletter which summarizes the news, resources and discussions added every two weeks. You can tailor the e-mail to focus on some or all of the above areas. To register visit www.ifac.org.