Promoted from keeper of the figures to running the company
The bulk of accountants in businesses around the world keep their heads down and concentrate on their role of helping to run the companies that keep the global economies running.
When controversies erupt, they tend to be about those accountants representing the tip of the iceberg, the auditors and the standard-setters.
The body representing the world’s accounting professions, the International Federation of Accountants (IFAC), reckons that more than half the 2.5m accountants work as professional accountants in business, (PAIB). In its recent report The Roles and Domain of the Professional Accountant in Business, the PAIB committee of IFAC makes plain that “many of them [are] in roles which are critical to the success of the enterprise”.
And those roles are changing. Bill Connell is chairman of the IFAC PAIB committee that produced the report.
“Although accountants are very important in financial reporting,” he says, “we are now recognising that there has been a significant shift to roles which cover more than that, like leadership, ethics, corporate conduct, corporate governance, enterprise governance and strategic decision-making”.
It is this shift in roles that IFAC is seeking to bring to the wider business public. “While there is a high awareness and appreciation of the roles and importance of accountants in audit practice and tax preparation, there is a less understood, but equally important, need for professional accountants to design and maintain mechanisms to assure that effective, ethical and responsible corporate governance and control is achieved,” says the report.
The result in the shifting of roles is the way that two directions for accountants in business is handled. The traditional role of maintaining the finance function is no less important for the integrity of a company but, thanks largely to technology, requires less management time. The evolving role of being a key part of the advisory function appears to be almost limitless in the possibilities for expansion.
This is recognized in the IFAC report. It details the expanding areas. It talks of “the generation or creation of value through the effective use of resources through the understanding of the drivers of stakeholder value and organizational innovation”. It details “the provision, analysis and interpretation of information to management for formulation of strategy, planning, decision making and control”.
It details the financial reporting obligations. It talks of the more traditional areas such as “cost determination and financial control, through the use of cost accounting techniques, budgeting and forecasting”.
And it turns its attention to more recent concerns such as “the reduction of waste in resources used in business processes through the use of process analysis and cost management”.
And it concludes with the greatest area of change of all for accountants in business
