Russell Guthrie, Executive Director of External Affairs & CFO, of the International Federation of Accountants (IFAC) spoke at Sage Intacct Advantage 2017 on the future of accounting, global trends, challenges, and opportunities in the space. In case you missed his session, would like a topical refresh, or weren’t able to attend Sage Intacct Advantage, be sure to read this post for a recap on Russell’s session…
It’s widely undisputed that the accountant’s role in the global economy has changed – for the better. There are around three million professional accountants worldwide, and over the last 15 years, countries with higher shares of accountants had higher growth rates. Further, higher overall GDP per capita is linked to the share of accountants that are employed, with $575B gross value add (GVA) by accountants, and $248B GVA of that comes from IFAC members. That is an enormous value add that IFAC accountants bring!
Even the role of the CFO has evolved…Over the years, the CFO has gone from the traditional transaction and reporting role, to a navigator, communicator, forecaster, digital leader, and now – a change maker.
It’s no secret that new and emerging technologies are rapidly improving the way organizations – from startups to enterprises - do business. At the root though, technology enables companies to deliver greater value to customers and at a faster pace than ever before.
In relation to financial statement audits, new technologies like mobile applications, advanced data analytics, digital communication, and collaboration platforms are just a few examples of innovations that are transforming the audit.
IFAC is also taking the root cause analysis (RCA) approach. RCA is one of a group of classic methodologies known as structured problem solving. According to IFAC, “Today, we find that RCA is one of the hottest topics in the world of audit and accounting. In fact, as regulation and complexity increase across almost all professional sectors, RCA is now the go-to problem solving methodology amongst a new generation of senior professionals and strategic thinkers.”
In his session at Sage Intacct Advantage, Guthrie specifically suggested that audit transformation doesn’t just involve: quality control, compliance, documentation, and examination, but also broader questions like taking the audit data analytics and asking what happened, why, and then addressing what’s next.
The good news is that these standards are something that even small and medium-sized practices can implement into their businesses, and reap major benefits because of it.
Guthrie then, ever so humorously, transitioned from auditing into fraud and corruption within the global economy, stating that fraud cost the global economy $2 trillion per year. IFAC is trying to address this at the very top. In 2017, IFAC called upon the G20 to build greater trust and confidence, promote stronger governance, and to influence compliance across the public and private sectors.
Though IFAC is not the only organization that is tackling the issue of fraud and corruption, Guthrie noted that they are trying to lead by example by inspiring confidence through their processes, values, transparency, and the methods of communication in which they disseminate these best practices.
Guthrie said, “These are big issues at a critical time in the global economy. Accounting is essential to growth, and around the world I’ve seen your peers working in vastly different circumstances, but for the very same goal: greater transparency, great accountability, better information, and valued trust. We have an indefensible role to play in this.”
In the years to come, these changes to the CFO role - and accountancy in general - can translate to a stronger voice to help business organizations, governments, and societies as a whole develop positive change.