20101130 ifac paib competent versatile professional accountant in business

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INVITATION TO COMMENT

Guide for Commentators

This Consultation Paper, Competent and Versatile: How Professional Accountants in Business DriveSustainable Organizational Success , aims to (a) increase awareness of the important roles of professional accountants in business, and (b) generate debate on what professional accountants in

business need to do to meet the needs of their employing organizations.IFACs Professional Accountants in Bu siness (PAIB) Committee would like to receive comments onall matters addressed in this Consultation Paper and is particularly interested in comments on thematters set out below:

Discussion Questions

1. Does the paper fairly and usefully represent the diverse roles and domain of professionalaccountants in business? Please suggest ideas on how we can enhance the paper to become auseful tool in (a) creating awareness of the important roles professional accountants play increating, enabling, preserving, and reporting value for organizations and stakeholders, and (b)

identifying how IFAC could assist its member bodies and associates in enhancing thecompetence of their members.

2. What additional tools could IFAC develop to assist its member bodies and associates topromote and communicate the roles of professional accountants in business to variousaudiences, including employers, governments, and regulators?

3. Do you agree with the drivers of sustainable organizations that lead to long-term sustainablevalue creation, as identified in Part 2 and described in Appendix 2? If not, what alternativeswould you suggest?

4. Would IFAC member bodies and associates find it useful for an international competencyframework to be developed, covering the roles and domain of professional accountants in

business defined in this paper?5. How would a competency framework be best structured? Could the competences be usefully

structured using the eight drivers of sustainable organizations, and would it be practicable touse the description of the key expectations placed upon professional accountants in business inPart 4?


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Comments are requested by November 30, 2010. Comments may only be submitted electronicallythrough the IFAC website (www.ifac.org ), using the Submit a Comment link on the ExposureDrafts and Consultation Papers page. Please note that first-time users must register to use this feature.

Professional Accountants in Business CommitteeInternational Federation of Accountants

545 Fifth Avenue, 14 th Floor

New York, New York 10017 USA

Copyright September 2010 by the International Federation of Accountants (IFAC). All rights

reserved. Permission is granted to make copies of this work to achieve maximum exposure andfeedback provided that each copy bears the following credit line: Copyright September 2010 bythe International Federation of Accountants (IFAC). All rights reserved. Used with permission of

IFAC. Permission is granted to make copies of this work to achieve maximum exposure and feedback.

ISBN: 978-1-60815-071-7
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IFAC PAIB COMMITTEECONSULTATION PAPER

COMPETENT AND VERSATILE

HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLEORGANIZATIONAL SUCCESS

CONTENTS

Page

Chairmans Foreword .......................................................................................................................... 5

Overview .............................................................................................................................................. 6

Part 1: Who are Professional Accountants in Business and Where Do They Work? ....................... 8

Part 2: Drivers of Sustainable Organizations ...................................................................................... 13

Part 3: Positioning Professional Accountants in Business for the Future .......................................... 15

Part 4: How Professional Accountants in Business Drive Sustainable Performance ......................... 18Appendix 1: Megatrends and Emerging Issues Driving Change in the Business Environment ....... 32

Appendix 2: A Closer Look at the Eight Drivers of Sustainable Organizations ............................... 34


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HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS

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Chairmans Foreword Global recognition of professional accountants as business leaders and strategic partners in buildinglong-term sustainab le organizational success is the vision and central tenet of IFACs proposedProfessional Accountants in Business (PAIB) Strategy (available at www.ifac.org/PAIB). To achieve

this vision, IFAC needs to collaborate effectively with its member bodies and associates to promoteand contribute to the value of professional accountants in business. As the strategic plan describes,there are two key complementary activities to pursue:

1. Increasing awareness of the important roles professional accountants play in creating, enabling,preserving, and reporting value for organizations and their stakeholders; and

2. Supporting member bodies in enhancing the competence of their members to fulfill those rolesby facilitating the communication and sharing of good practices and ideas.

Competent and Versatile, How Professional Accountants in Business Drive SustainableOrganizational Success , provides both IFAC and its members and associates with a resource toenhance the perception of professional accountants in business. It explores the roles that theyperform, and invites consideration of the possibility that this perception might be further enhancedthrough development of an international competency framework.

This Consultation Paper builds on the PAIB Committees 2005 pape r, The Roles and Domain of theProfessional Accountants in Business . However, this new approach provides an objective analysis of the expectations placed on professional accountants in business by their employing organizations inthe context of a rapidly changing business environment. The analysis is based upon eight drivers of sustainable organizations, which we believe are widely recognized attributes of organizations wellpositioned to achieve sustainable success over the long-term. An employer based view of theexpectations of professional accountants in business is a demand-driven response to understandingthe future roles and expectations placed on such professional accountants.

Highlighting the breadth of roles and characteristics of professional accountants in business and theexpectations that will be placed on them going forward is intended to be useful in communicating toemployers, professional accountants, governments and regulators. Individual professional accountantmembers might also find the approach useful in making their colleagues and employers aware of thescope of their competence, expertise and potential contributions to driving sustainable organizationalsuccess.

I believe this paper is an important contribution to improving common understanding within theaccountancy profession and beyond of the work of our colleagues who work in business and publicservice. It will be a better contribution if it is improved through the insights of as many interestedparties as possible. So I strongly encourage IFAC member bodies and associates to respond to the

discussion questions above. I also encourage feedback from beyond the profession. Please help us toidentify how this work can be best exploited to communicate with various audiences, includingemployers, governments and regulators. If the perception of professional accountants in business inyour jurisdiction is not as it is described in this paper, I invite you to consider what actions need to betaken to change the perception and to enhance the recognition of your members and students.

Roger TaborChairman, Professional Accountants in Business CommitteeSeptember 2010


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OverviewThis Consultation Paper examines the expectations placed on professional accountants in business(sometimes known as management accountants or finance professionals) and how they create,enable, preserve, and report sustainable value for their employing organizations in a rapidly changing

economic and competitive environment.Examining the future roles of professional accountants in business through the lens of organizationalsustainability, and what is required to deliver economic, social, and environmental performance, thispaper aims to help IFAC and its members and associates to increase awareness of the important rolesprofessional accountants play in driving sustainable value creation. Such an approach will also assistin ensuring the acquisition and development of required professional skills and competences amongprofessional accountants in business.

Future expectations governing the way professional accountants in business should support thedevelopment of sustainable organizations are analyzed in light of the emerging challenges affectingthe economic environment, and the eight drivers of sustainable organizations. These drivers have

been identified to form the context of considering (a) how professional accountants should supporttheir organizations, and (b) the professional skills and competences they will need. This is a demand-driven response to understanding the future roles and expectations placed on professionalaccountants in business.

Sustainable development and the sustainability of organizations have become mainstream issues forpoliticians, consumers, and business leaders. From an environmental and social perspective,sustainability issues are transforming the competitive landscape, forcing organizations to change theway they think about products, technologies, processes, and business models. From a financialperspective, the primacy of shareholders as owners and maximizing wealth creation for thisconstituency is being challenged, particularly where it has become evident that their short-termfinancial interests can be incompatible with their long-term viability. Long-term sustainable valuecreation requires responsible organizations to direct their strategies and operations to achievingsustainable economic, social, and environmental performance. It also requires incorporating widerstakeholder perspectives and issues into decision making.

Ensuring that organizations pursue sustainable business models and development practices willrequire radical changes in the way they do business. Achieving a sustainable future is only possible if organizations recognize the role that they can and need to play. Effective action by the accountancyprofession and professional accountants to better integrate and account for sustainability is anessential part of the response.

Governing bodies and business leaders should be focused on the long-term sustainability of theirorganization, and they should be confident that their business models will deliver this. Professionalaccountants in all types of organization have a significant role in framing business models,challenging conventional assumptions of doing business and redefining success; encouraging andrewarding the right behaviors; ensuring that information flows to support decisions; and ensuring thatmonitoring and reporting performance go beyond the traditional ways of thinking about economicsuccess.


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Highlights

Part 1: Clarifies who professional accountants in business are and where they work. This sectionincludes a description of the four generic roles that they perform as creators, enablers, preservers andreporters of value, and examples of their roles and responsibilities across conformance and

performance dimensions.Part 2: Identifies and summarizes the key features of the eight drivers of sustainable organizations,which are used in Part 4 of the document to organize the expectations placed upon professionalaccountants in business. These drivers were defined in light of an analysis of the overarching forcesof change in the business environment and are explained in Appendix 2. The drivers were alsoidentified by drawing on various sources, including The CIMA Business Success Wheel andmanagement and quality frameworks, such as the European Foundation for Quality Management and(US-based) Baldrige National Quality Program .

Part 3: Positions professional accountants in business for the future by highlighting the professionalskills and mindset that will be required of them. This section focuses on the mindset that will be

required, which extends beyond what is taught and tested in a professional education program.Part 4: Details the expectations of professional accountants in business based on the activities theywill need to perform to support sustainable and successful organizations. The activities are capturedunder each of the eight drivers identified in Part 2.
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Part 1: Who are Professional Accountants in Business and Where Do TheyWork?Worldwide, more than one million professional accountants work to support organizations incommerce, industry, financial services, the public sector, education, and the not-for-profit sector in

making them more successful and sustainable. They are a very diverse constituency, and can befound working as employees, consultants, and self-employed owner-managers or advisers incommerce, industry, financial services, the public sector, education, and the not-for-profit sector.

Within organizations, many professional accountants are business leaders in a position of strategic orfunctional leadership, or are otherwise well placed to partner with colleagues in other disciplines tocreate long-term sustainable value for their organizations. Business leaders typically perform indirector and management roles, while strategic business partners support and participate in decisionmaking and direction at various levels of the organization.

What Roles Do They Perform?

Professional accountant roles can broadly be categorized as creators, enablers, preservers, andreporters of sustainable value for their organizations in two key dimensions:

A Performance Dimension

As creators of value in organizations, by (a) taking leadership roles in governance, strategy,and performance management, and (b) overseeing the allocation of resources to ensure long-term sustainable value creation. Examples of job roles within which value creation is a keyactivity include chief executive officer (CEO), chief financial officer (CFO)/financial director(FD), treasurer, or other executive director role.

As enablers of value in organizations, by influencing and supporting those who makedecisions, and challenging assumptions and conventional thinking. Examples of job roleswithin which enabling value creation by others is a key activity include business unitcontroller; business, financial, or performance analyst; management accountant; and costaccountant. In other words, these are professional accountants who will typically assist andguide managerial and operational decision making and implementation of strategy as businesspartners.

A Conformance Dimension

As preservers of value in organizations, by identifying, prioritizing, managing, and controllingstrategic and operational opportunities and risks. Examples of job roles primarily dedicated tothe preservation of value include director of governance or operations, risk, and business

assurance manager, financial risk manager, compliance manager, and internal auditor.As reporters of value in organizations, by (a) measuring performance, capturing financialtransactions and non-financial measures of performance, and (b) preparing high-qualitybusiness and financial reporting to stakeholders, including investors, customers, employees,regulators, and suppliers. Examples of job roles within which reporting on value is a keyactivity include group controller, head of reporting, investor relations manager, and financial ormanagement accountant.


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These examples of positions are not limited to the aspect of the role they illustrate here, and aprofessional accountant in business might perform elements of all four dimensions within one jobfunction. This is particularly so in leadership positions: for instance, within the role of chief financialofficer, some elements will focus on creating value (e.g., strategy development and striving forgrowth); some on enabling value (e.g., supporting the governing body and senior management inmaking decisions and facilitating the understanding of performance of other organizational functionsor units); some on preserving value (e.g., mitigating strategic risk and implementing effective internalcontrol systems, and asset management); and some on reporting value (e.g., ensuring relevant anduseful internal and external business reporting). Professional accountants in highly specialized rolesin areas such as tax planning also typically operate across various dimensions, as will those in small-and medium-sized enterprises who usually perform multiple roles (see Part 3).

Figure 1: The Domain of Professional Accountants in Business


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The domain of professional accountants in business (Figure 1) spans the four roles as well ascapturing how the roles align to the internal working of organizations, represented here by describingthe widely used management (Deming) cycle steps: plan, do, check, and act.

The performance and conformance dimensions are derived from IFACs International Good Practice

Guidance, Evaluating and Improving Governance in Organizations . The principles in the guidancesupport an appropriate balance between conformance and compliance on the one hand, and businessperformance, and value enabling and creation on the other. The professional accountant in businessplays a key role in both these dimensions and in optimizing the balance between the two (seeBalancing Performance and Conformance Responsibilities ).

Balancing Conformance and Performance Responsibilities

Conformance responsibilities include providing assurances to senior management and boards asto whether:

Strategic, operational, and financial risks are effectively identified, prioritized, managed andcontrolled, mitigated, and reported

The organization is working effectively and efficiently in achieving its strategic andoperational goals and objectives

The systems generating financial and non-financial information are working withinprescribed standards of accuracy and reliability, and such information reflects the truesustainable performance of the organization

Managements fiduciary responsibilities, such as external financial reporting, fraud risk management, and adherence to governance codes are being carried out

Performance responsibilities focus on strategy, value creation, and sustainable resourceutilization, and include:

Helping organizations make sustainable strategic decisions, implementing appropriatestrategies, and evaluating their ongoing relevance and success

Understanding the or ganizations appetite for risk and its key drivers of sustainableperformance

Identifying critical points at which the organization needs to make decisions, and supportingthese with relevant insight and analysis

Allocating resources efficiently and effectively to achieve strategic goals and objectives
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Characteristics of Professional Accountants in Business

The professional designations for accountants around the world vary, 1 but among the most commonare Chartered Accountant (CA) or Certified Public Accountant (CPA), Chartered or CertifiedManagement Accountant (CMA), Expert Comptable, and Contador Pblico. Although the

professional designations differ, professional accountants around the world share the samecharacteristics.

The distinguishing mark of the accountancy profession is its responsibility to act in the publicinterest. To do so, a professional accountant:

Meets the standards of a professional, defined as having skills, knowledge, and expertise testedby examination and continuous development in a structured and monitored context; iscommitted to the values of integrity, objectivity, professional competence and due care,confidentiality, and professional behavior (via a code of ethics); and is subject to oversight by abody with disciplinary powers; and

Is recognized as an accountant, defined as belonging to a recognized accountancy body and

upholding professional standards and approaches in the discipline of recording, analyzing,measuring, reporting, forecasting, and giving advice in support of the drivers of sustainableorganizations identified in Part 2.

These characteristics underlie being a professional accountant in business and qualify him or her tomanage the drivers of sustainable organizations.

The Needs of Society, Financial Markets, and Organizations

The financial and economic crisis starting in 2008 and the uncertain path to recovery for manycountries is of overwhelming significance for governments, regulators, and financial markets likewise, for public and private sector organizations and the professional accountants they employ.

The crisis and its aftermath bring into focus significant challenges, most notably:Moving to a model of sustainable economies and corporate responsibility where organizationspursue more sustainable strategies and actions and take into consideration a broader range of stakeholders;

Balancing compliance requirements with the need to drive organizational performance andremain competitive within an increasingly global economy; and

In some jurisdictions, the need for significant and rapid reduction of government expenditureand debt, and increased accountability and transparency in governments.

The current uncertainty puts into the spotlight those core issues that need to be addressed to foster

sustainable economic growth. These include (a) more effective governance, regulation, andoversight, as well as (b) more effective political and organizational infrastructures and processes tominimize the risks associated with globalization and to ensure inclusive growth, 2 particularly in

1 See the various professional designations among IFACs membership . 2 See World Bank definition of inclusive growth.
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emerging economies. Long-term sustainable success requires responsible organizations to direct theirstrategies and operations to achieving sustainable economic, social, and environmental performance.

The charting of a new course from crisis to recovery presents an opportunity to position the globalaccountancy profession and professional accountants as organizational and financial navigators,

contributing to the implementation of measured and effective responses to help foster sustainableeconomic growth.

This will require IFAC, working in partnership with its members, to ensure that the education,training, and continuing professional development of professional accountants in business remainsaligned with the changing needs of organizations as employers of professional accountants.


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Part 2: Drivers of Sustainable OrganizationsClarifying and promoting the roles, activities, and professional skills of professional accountants inbusiness needs to be done (a) within the wider context of understanding the attributes of high-performing sustainable organizations, and (b) with an appreciation of the emerging trends and

developments in the business environment.The eight drivers of sustainable organizations provide the framework for understanding how theglobal accountancy profession needs to support the development of professional accountants inbusiness so that they can help organizations achieve sustainable value creation. The drivers are:

Customer and Stakeholder Focus

Effective Leadership and Strategy

Integrated Governance, Risk and Control

Innovation and Adaptability

Financial Management

People and Talent Management

Strategy Execution

Effective and Transparent Communication.

These drivers represent what organizations need to do to achieve and sustain high performance andsuccess. They are core elements of every organization striving to be truly sustainable over the longterm. The drivers were defined in light of an analysis of three megatrends: 3 globalization ,complexity, and technology , which futurists and business commentators highlight as influentialoverarching forces of change. The megatrends are described in Appendix 1 and highlight the mainlong-term trends and forces influencing organizations, whether in the private, public, or not-for-profitsectors. These trends bring opportunities and challenges to the business environment and drive (a)change in organizations strategies and structures, and therefore (b) the nature and location of theactivities of finance functions.

Because, collectively, these drivers will determine the long-term success of organizations, they areused in Part 4 as the basis of defining the key future activities of professional accountants in business.They are summarized in Figure 2 below, and described in more detail in Appendix 2. Although thedrivers are not hierarchical, the first driver reflects the overriding need for all organizations to becustomer and stakeholder focused. The underlying premise is that an organiza tions sustainabilitywill first depend on satisfying its customer and key stakeholder needs, with which all other aspects of the organization can be aligned.

3 Megatrends means a general shift in thinking or approach affecting countries, industries, and organizations.


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Figure 2: Drivers of Sustainable Organizational Success


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Part 3: Positioning Professional Accountants in Business for the FutureThe ability of professional accountants in business to help drive sustainable value creation willdepend on (a) gaining a range of professional skills, (b) a particular mindset and attitude, as well as(c) undertaking certain activities based on the drivers of sustainable organizations identified above.

This paper focuses on establishing the expectations placed on professional accountants in business interms of the activities they will need to undertake (explored in Part 4), thereby extending beyond theknowledge and skills that will be taught and tested in a professional education program. This sectionhighlights the professional competences and mindset needed by professional accountants in business.

The performance of a professional accountant in business derives from the acquisition of professionalskills and competence, as well as the demonstration of a mindset that represents an attitude of mindand a way of thinking that governs the way professional skills are applied in practice.

Acquiring Professional Skills

International Education Standard 3, Professional Skills and General Education,4 usefully defines a

list of professional skills for professional accountants:Intellectual skills;

Technical and functional skills;

Personal skills;

Interpersonal and communication skills; and

Organizational and business management skills.

These professional skills are part of the set of capabilities required by professional accountants todemonstrate competence. These capabilities include knowledge, skills, professional values, ethics,and attitudes. The standard classifies a list of required skills (not exhaustive) under the five headingsabove, and recognizes that not all these skills will be fully developed at the point of professionalqualification. Professional skills will be partly acquired during initial qualification and training, butwill need to be developed and honed throughout a career, often by performing different roles withinan organization and by undertaking continuing professional development and education.

The Mindset of Professional Accountants in Business

Gaining experience in different roles will also help with the acquisition of a mindset thatdifferentiates the most successful professional accountants in business. Employers are demanding abroader range of professional and general business skills, which, if developed, improves theversatility of the professional accountant in business. In addition, with experience, the most

successful professional accountants in business can typically also be characterized by a distinctiveattitude, outlook, or way of thinking. In this paper, we call this the mindset of a professionalaccountant in business. Mindset encompasses an instinctive focus on financial performance and thestrategic allocation of resources in pursuit of organizational goals, supported by an analytical

4 Issued by the International Accounting Education Standards Board.


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approach based on evidence. It facilitates the deployment of financial navigational skills that permit asuccessful course to be charted for the organization, by overcoming organizational challenges andproactively identifying opportunities. It also incorporates a resolve to challenge flawed analysis andunsound, or unethical, decisions. The mindset complements formally taught skills, but cannot easily

be examined or regulated. The professional accountants mindset will need to embrace:

Professionalism and ethical behavior

Professional accountants should uphold high ethical standards in accordance with the Code of Ethics for Professional Accountants ,5 which requires accountants to encourage an ethics-basedculture in an employing organization that emphasizes the importance that senior managementplaces on ethical behavior (see paragraph 300.5 of the Code). Therefore, professionalaccountants in busines s can support an organizations code of conduct and ethics through their own behavior and actions.

IFACs guidance on Defining and Developing an Effective Code of Conduct for Organizations highlights the important role that professional accountants play in driving and supporting

organizational ethics and fostering a values-based organization. By applying a values-basedapproach, rather than relying only on written policies and rules, they can promote a culture thatencourages employees to internalize the principles of integrity and to do the right thing byallowing them to make appropriate decisions given specific circumstances.

Professional judgment

Professional accountants in business carry out their roles in different modes, includingdirecting, influencing, evaluating, and informing. Furthermore, the vast range of circumstancesand situations that can arise in organizations of any type, industry, and size renders detailedprescription of rules ineffective for guiding management decisions. Therefore, the quality of professional judgment exercised becomes a differentiating factor for high-performingprofessional accountants in business. This includes having a healthy professional skepticismthat relies on seeking evidenced- based decision making and challenging received wisdom.

Organizational and environmental awareness

As integrators, professional accountants in business can (a) link functional disciplines andorganizational units, as well as (b) facilitate a common and unifying perspective on anorganizations business model and key success factors in relation to changing circumstancesand environmental factors and trends. To play the role of integrator requires professionalaccountants in business to be cognizant and knowledgeable of other disciplines, such astechnology, people and project management, and managing and measuring non-financial

activities and performance, such as a carbon footprint. They should also be able to reconcile thebig picture with the detailed aspects of operational performance.

5 Issued by the International Ethics Standards Board for Accountants.
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Being comfortable dealing with change, uncertainty, and complexity

The professional accountant in business will have to apply professional skills to exerciserational, disciplined, objective, and rigorous analysis and judgment to often ambiguous andimperfect information. This will involve facilitating processes and behaviors that ensure high-

quality useful financial and non-financial information to support governing bodies (boards),management, and other decision makers. Professional accountants in business will need to (a)show an ability to provide timely and accurate management information efficiently, and (b)combine business and financial expertise to inform decision making. Furthermore, given thecomplexity of international financial reporting standards and the gap between how informationis reported externally and internally (for management), the ability to integrate internal andexternal reporting to give a useful picture of performance to all stakeholders is vital.

Large Versus Small- and Medium-Sized Organizations

The career and developmental path for professional accountants in business varies depending on thetype of organizations for which they work. In larger organizations, professional accountants in

business may pursue a range of roles to acquire specialist and generalist skills. Sometimes referred toas a T-shaped professional, such an individual will have broad generalist finance knowledge andstrategy skills, complemented with a deep technical specialty in, for example, profitability analysisand cost management, risk management and analysis, or financial reporting.

Professional accountants working in small- and medium-sized organizations will usually performmultiple roles applying a broad range of skills, and will often act as generalists. Recognizing thatprofessional accountants play an important and varied role in such organizations, the PAIBCommittee published interviews with 10 senior-level accountants on their experiences in mid-sizedenterprises (MEs), titled The Crucial Roles of Professional Accountants in Business in Mid-Sized

Enterprises . The interviews provide an insight into the unique challenges that MEs confront and howprofessional accountants can help to address these challenges:

(a) Professional accountants are enablers of MEs performance. They provide crucial contributionsto streamlining business plans; installing and improving management information systems;implementing process improvements; mitigating risks; strengthening relations with banks andinvestors and attracting capital; and other activities that enable the current and future success of their companies; and

(b) Professional accountants operate as generalists in MEs. Although they specialize in finance andaccounting management activities, they serve as an integral part of the management team andfulfill a wide variety of responsibilities beyond the finance and accounting discipline. Theyshould be able to wear many different hats and juggle many different balls at the same time.
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Part 4: How Professional Accountants in Business Drive SustainablePerformanceIt is the thesis of this paper that the principal expectations of professional accountants in business arederived from the activities they will need to perform to support the development of sustainable

organizations. Key activities are highlighted below under each of the four broad dimensions of theroles professional accountants in business play: creators, enablers, preservers, and reporters of sustainable value.

The format of the presentation is to, in relation to each of the drivers (a) summarize the requiredactivities of professional accountants in business, (b) provide a context, and (c) capture the keyexpectations for professional accountants in business by role.

A summary of the key expectations for professional accountants in business is in the matrix at theend of Part 4.

Each driver can be quickly accessed via the hyperlinks embedded in the diagram below (ctrl-click).

Customer andStakeholder Focus

Effective Leadership andStrategy

Integrated Governance,Risk and Control

Innovation andAdaptability

Financial Management

People and TalentManagement

Strategy Execution

Effective and TransparentCommunication

S S U U S S T T A A I I N N A A B B L L E E O O R R G G A A N N I I Z Z A A T T I I O O

N N A A L L S S U U C C C C E E S S S S


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Driver 1: Professional Accountants Driving Customer and Stakeholder Focus

To successfully drive (changes in) customer and stakeholder focus, professional accountants inbusiness need to:

Support an organization in its efforts to engage customers and stakeholders, and to facilitatean understanding of how they view the organization and its performance

Develop in-depth knowledge and understanding of the critical drivers of customer andstakeholder value 6

Align the role of the finance function with wider organizational efforts to deliver customerand stakeholder value

Context

A sharper customer and stakeholder focus is vital to achieving sustainable success and isfacilitated by globalization and new technologies that, for example, (a) allow greaterdecentralization, where decision making is close to the customer, and (b) facilitate greaterinnovation by fostering collaborative relationships in a global network of strategic partners andalliances. On the other hand, increased complexity means that organizations need to direct theirattention to many issues, which can easily cloud their view of changes in customer and otherstakeholder needs and necessary adjustments to their business model.

Professional accountants in business need to be a part of the effort to meet customer 7 and otherstakeholder needs, and supporting their organizations in aligning all (other) drivers of sustainableorganizational success towards achieving increased customer and stakeholder focus. They shouldalso be positioned to work in partnership with other organizational functions to addresscomplexity and access customer insights. This will help to identify what customers want and

define value from their perspective, to ensure the cost-effective delivery of relevant products andservices.

Exactly how professional accountants help to nurture a customer-focused organization dependson their position in an organization. At a leadership level, they should be positioned to helpfoster a strong link between business strategy, governance, and sustainability, so thatorganizations can ensure that customer and stakeholder focus goes hand in hand with theobjective of achieving sustainable value creation. In other positions, professional accountants, forexample, identify, understand, and monitor groups of customers and stakeholders to provideappropriate decision-oriented information on changing customer and stakeholder needs.

A sharper focus on the internal customer is required, especially as organizations can increasingly

be seen as networks of customer-supplier relationships. Professional accountants in financefunctions have to fully support other functions, such as innovation, sales, and operations, and

6 Stakeholder value is defined in the International Good Practice Guidance, Evaluating and Improving Governance inOrganizations .

7 In the public or governmental sector, customers might be referred to as public service users.
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proactively adapt their services to the changing needs of internal customers and help them intheir efforts to create value for customers.

Key Expectations on Professional Accountants in Business

As creators of value As enablers of value As preservers of value As reporters of value

Facilitate a focus onsustainable value creationby ensuring a strong link between strategy,governance, andsustainability to support thedelivery of value tocustomers and stakeholders

Ensure organizations makesustainable customer- andstakeholder-focusedstrategic and operationaldecisions, implementappropriate strategies, andevaluate their ongoingrelevance and success

Monitor and ensure thatorganizations effectivelyand efficiently achieve theirstrategic and operationaltargets and goals

Effectively communicatehow value is delivered tocustomers and stakeholdersto internal management andoperations and, whereappropriate, within externalreporting, such as theannual report

Driver 2: Professional Accountants Driving ffective Leadership and Strategy

To successfully drive (changes in) leadership and strategy to achieve sustainable value creation,professional accountants in business need to:

Provide ethical and strategic leadership

Evaluate strategic options with respect to the organizations risk profile and appetite, andrecommend optimal strategies

Effectively articulate strategy and business case(s) for pursuing strategic options, and establisha strong business case to highlight how improved environmental and social performance cantranslate into enhanced business performance

Support the strategic planning and implementation process with insight and analysis of theorganization and its environment, and by understanding the information and decision needs of internal customers of the finance function

Context

Experienced professional accountants should be in a position to provide ethical and strategicleadership in executive (C-suite) positions and senior management roles. This will involve (a) addingvalue through setting the tone in the organization, (b) participating in strategy and planning to chart acourse for the organization, as well as (c) providing information and analysis and maintainingstrategic control and financial navigation to ensure execution of strategy. Professional accountants inbusiness should play a part in the key areas of strategic leadership: strategy (what do we want toachieve?); values and attitudes (what do we stand for?); and the business model (how do we organizeto create, deliver, and capture value economic, social, or other?).

They should also be positioned to influence the way their organizations integrate governance andsustainability into their objectives, strategies, management, and definitions of success. Facilitatingsustainable organizations and ensuring sustainable value creation will involve professionalaccountants in business in:


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Challenging conventional assumptions of doing business, identifying risks, and seizingopportunities;

Redefining sustainable success so that it is relevant in the context of the organization;

Establishing appropriate performance targets;

Encouraging and rewarding the right behaviors; and

Ensuring that information flows to support decisions and to monitor and report performance gobeyond the traditional ways of thinking about economic success.



Set strategic direction bydefining a value propositionthat takes advantage of the

organizations strengths andweaknesses, and beingaware of the critical pointsat which an organizationneeds to make strategicdecisions

Frame key questions andissues for consideration,and providing managerial

and operational decisionmakers with relevant insightand analysis

Identify, prioritize, manage,control, and mitigatestrategic and operational

risks within the context of the adequacy of governanceprocesses and practices

Provide management, aswell as externalstakeholders, with analysis

and insights on drivers of sustainable value creation

Driver 3: Professional Accountants Driving ntegrated Governance, Risk and Control

To successfully drive (changes in) integrated governance, risk and control, professional accountantsin business need to:

Provide leadership on how risk and control integrates with leadership, strategy, andgovernance to ensure both compliance and performance

Integrate governance, risk management, and control into the strategy, operations, andstakeholder communications of the organization

Link effective governance, risk management, and control with ethical leadership, so that risk and control failures do not arise out of poor governance or unethical behaviors and practices

Evaluate and improve governance, risk and control methodologies, systems, and processes inline with social, environmental, and economic changes.

Context

Professional accountants in business should be positioned to perform significant roles in integratingand fostering close links between governance, risk management, and control so as to ensure that theyare not dealt with in functional silos. As integrators, professional accountants should be able toensure that control systems and processes support the delivery of the wider strategic objectives of anorganization, helping to identify opportunity and risk, as well as providing (internal) control overfinancial reporting.


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Current terminology often refers to integrating governance, risk, and compliance (GRC), and isincreasingly associated with technology and how it can ease the burden of organizations of managingand sharing information and dealing with risk and controls, given the sheer complexity of theiroperations. The rising interest in the convergence of governance, risk, and compliance focuses onbetter integration of policies, procedures and processes, and technology (systems) to minimize risk exposure and comply with external and internal regulations, policies, or mandates. However, thisperspective (a) can inhibit reaching the ultimate objective that governance, risk and control will beused to advance organizational objectives and execute strategy, and (b) can also mask the importanceof the behavioral factors that create sustainable value creation and ethical performance, such asculture and values.

The role of professional accountants in business in evaluating and improving governance, risk andcontrol systems is a key theme of IFACs International Good Practice Guidance, Evaluating and

Improving Governance in Organizations , which emphasises that governance, risk and controlactivities should be directed not only to meeting the demands of regulatory compliance(conformance), but also to supporting the creation of value for stakeholders (performance).

Governance, risk and control, if effectively integrated, should result in an enterprise-wide controlsystem that:

Supports executives/managers in moving an organization forward in a cohesive integrated andaligned manner to improve performance, while operating effectively, efficiently, ethically, andlegally within risk-taking tolerances; and

Integrates and aligns activities and processes related to planning, risk management,policies/procedures, culture, competency, internal audit, financial management, monitoring,and reporting.

Examples of poorly integrated governance, risk and control are provided in the analysis of the driversof sustainable value in Appendix 2.

In respect to risk management, professional accountants in business need to play a leading role inensuring that enterprise risk management forms an integral part of an organizations govern ancesystem and is delivered by line management. Professional accountants in business are increasinglylooked on to take the lead on risk management, in particular by orchestrating a common view on anorganizations risk profile. Therefore, they should be seen to be able to facilitate the identificationand communication of the organizations risk appetite and risk capacity, and to help to balance theavoidance of risk with seizing opportunities in accordance with an organizations risk appetite. Inencouraging an integrated enterprise approach to risk, professional accountants in business can alsoensure that risks are viewed and managed in a more holistic way, so that individual risks are notassessed and dealt with in isolation, or in a linear, unconnected way.

Specifically in relation to (internal) control, professional accountants in business should help toensure that controls are embedded in processes with clear lines of accountability, rather than relyingon the adequacy of assurance from outside the process. Professional accountants in business shouldalso be able to document and demonstrate business processes and how owners are managing thevarious risks and applying appropriate controls.
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finance and accounting structures and processes, whether it be in relation to (a) delivering sharedservices or outsourcing, (b) providing expert services (e.g., tax, risk management, merger andacquisitions, and due diligence), or (c) providing financial leadership and support to the widerorganization. Regarding new accountancy innovation and adopti on: tomorrows managementaccountants should endeavor to understand the different opportunities innovations offer. This allowsthem to shape the design and use of the innovation for their own organization. Making sensiblechoices about which innovations to pursue, and driving those choices to the implementation stage, islikely to become a key role for management accountants. This role might well stretch their technicalcapabilities, but will also require an understanding of the broader (e.g., social and behavioral) issuesinvolved in implementing those innovations.8



Manage innovation in thefinance and accountingfunction to facilitate itsdevelopment, and tosupport its input intodeveloping anorganizations other innovation and R&Dactivities

Participate in the evaluationand improvement of processes and incentivesthat facilitate and nurtureinnovation and adaptability

Implement measures of innovation that objectivelyassess their financial andnon-financial impact andidentify possible areas of improvement

Report on innovativecapabilities and results andthe impact of R&Dinvestment, and on futureplans and priorities inrelation to R&D and otherinnovation activities

Driver 5: Professional Accountants Driving inancial Management

To successfully drive (changes in) financial management, professional accountants in business need

to:Establish appropriate financial strategies and objectives, and a business and financial planning

process to deliver an organizations strategic objectives

Evaluate financial implications, capital requirements, and expected returns of strategic options

Ensure the efficiency, integrity, and effectiveness of processes and systems in financialreporting, and manage changes to financial reporting standards

Context

Financial management and navigation are, and will continue to be, at the core of what manyprofessional accountants do in organizations. The main activities of professional accountants shouldcontinue to include:

8 Risk Manager or Risqu Manager, The New Platform for the Management Accountant , Baldvinsdottir G., Burns J.,Nrreklit H., and Scapens R.
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The provision, analysis, and interpretation of information to management for formulationof strategy, plans, decision making, and control;

Performance management through cost determination and financial control, budgeting, andforecasting; and

Corporate finance, including establishing financial objectives, capital planning andbudgeting, working capital management, raising finances, and financial risk management.

The application of these roles will be no less important in the public sector. The CharteredInstitute of Public Finance and Accountancy (CIPFAs) report, The Role of the Chief FinancialOfficer in Public Service Organizations , also includes a principle on the role of the public sectorCFO in driving good financial management: The CFO in a public service organization must lead the promotion and delivery by the whole organization of good financial management so that

public money is safeguarded at all times and used appropriately, economically, efficiently, and effectively. 9

Executive and independent board directors, in particular, need finance staff to provide clear and

concise information to support decision making and understanding of risk. To gain trust in theirabilities as both business stewards and as partners, professional accountants will need tounderstand the needs of a range of decision makers at various organizational levels to provide (a)value-added analysis, (b) high-quality advice that promotes solutions, and (c) interpretations of financial issues and impacts.

A strong finance function underpins quality financial management, and will continue to involveprofessional accountants in business who can deliver (a) effective and efficient enabling financeoperations (transaction processing, planning and budgeting, financial and business reporting,financial and fraud risk management, etc.), and (b) wider business support to the organization inthe form of high-quality management information and decision support and financial leadership.

Effective financial management will also involve identifying disconnects and failures acrossfunctional interfaces and process streams that detract from customer focus, hinder servicedelivery, and increase operating costs. Professional accountants in business will need to beprepared to look beyond their traditional departmental functions and targets and work effectivelywith other support functions to learn about the effect of their actions on the overall supportservices required in the organizational whole, and how it might affect the delivery of customerand stakeholder value without waste (i.e., minimizing non-value-adding activities).

9 CIPFA also provides a public financial management process architecture and a whole system context for financialmanagement in the public sector that underpins the delivery of public services and helps achieve sustainable socialoutcomes.
http://www.cipfa.org.uk/international/consultation.cfmhttp://www.cipfa.org.uk/international/consultation.cfmhttp://www.cipfa.org.uk/international/consultation.cfmhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/panels/finance_director/download/Role_CFO.pdfhttp://www.cipfa.org.uk/international/consultation.cfmhttp://www.cipfa.org.uk/international/consultation.cfm


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Understand and interpretthe financial health of organizations and play aleadership role indeveloping andimplementing a financialstrategy to deliver anorganizations strategicobjectives

Support directors,management, andoperations in understandingthe financial health of organizations and progressin delivering financialobjectives, and providingthe information and analysisneeded to improvesustainable value creation

Examine systems thatgenerate financial and non-financial information andensure that they areworking within prescribedstandards of accuracy andreliability, and that suchinformation realisticallyreflects the performance of the organization

Provide a detailedknowledge of financialreporting standards toensure that they arecorrectly applied

Driver 6: Professional Accountants Driving eople and Talent Management

To successfully drive (changes in) people and talent management, professional accountants inbusiness need to:

Support the development of human resource and talent management strategies and policiesfocusing on skills requirements, career development, and retention of critical staff (whether inthe finance function or the wider organization)

Manage the finance function and its performance, including the quality of business partnering to the wider organization, and how it is perceived by customers of finance andaccounting

Understand how a talent management program and specific human resource policies andactivities can apply to the finance function, for example in relation to ensuring adequate

recruitment, retention, developing future finance and business leaders, effective successionplanning, meeting future skills requirements, and recognizing high-performing employees andteams

Context

Professional accountants working as business leaders and managers will need to be able to deploypeople and talent management strategies, especially to retain critical staff and to engage talent. Thiswill also involve (a) exploiting new technologies to engage talent and expertise outside theorganization, and to stimulate collaboration and partnerships across organizational boundaries, and(b) ensuring the alignment of incentives of all employees and collaborators with the accomplishment

of the organizations strategic and operational objectives. Professiona l accountants working insmaller organizations without human resource departments will often be expected to undertakestrategic and operational people management activities.

The development of the finance function to better support the wider organization to fulfill itsbusiness objectives and to provide adequate stewardship and challenge (of flawed analysis andunsound, or unethical, decisions) also requires leadership, talent management, and human resource


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policies and practices that support (a) hiring and retaining critical finance staff, (b) successionplanning, (c) the development of competence and skills of individuals and teams, and (d)empowerment of finance staff. Greater empowerment of the finance function could also require aclear mandate from the board and senior management to encourage a culture of scrutiny andchallenge, and to deal with cultural issues, such as a cultural reluctance in some offshore locations tochallenge experts and those in authority.

Professional accountants in business should be positioned to manage their own career pathdevelopment, as well as to manage the development of others when in managerial positions. A partof this will also be designing reward structures and incentives to (a) encourage desired behavior, (b)nurture the potential of key staff, and (c) foster a long-term view of sustainable value creation.



Participate in identifying

and implementing peopleand talent managementstrategies and policies forthe wider organization andthe finance function,including the alignment of incentives

Focus individual and team

development on enhancinggeneralist skills, includingan understanding of business context andpriorities, providing high-quality managementinformation and analysisand business partnering togain trust within widerorganization

Ensure a questioning

mindset capable of identifying risks andopportunities and serve aspromoters of integrity,transparency, and expertise

Report on how

organizational investmentsin human capitaldevelopment lead to thegeneration of shareholderand stakeholder value

Driver 7: Professional Accountants Driving Strategy Execution

To successfully drive (changes in) strategy execution, professional accountants in business need to:

Implement performance management and measurement approaches and systems, includingestablishing performance metrics in light of strategic and operational goals and objectives, andevaluating performance against these

Identify operational performance gaps for process and supply chain improvement so as toprovide products and services with zero defects, on time, and at target cost

Link different parts of the finance function so as to ensure high-quality internal financial andbusiness management reporting feeds into effective external communications to stakeholders

Context

Professional accountants in business should be placed to manage financial and non-financialresources and performance through the understanding of strategic goals and objectives and thedrivers of stakeholder value.


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As well as being able to implement frameworks and systems for measuring progress towards theachievement of strategic goals and objectives, professional accountants in business should also bepositioned to design and implement process measurement and reporting systems, providing adequateinformation and analysis to support operational feedback and continuous improvement activities.Achieving operational excellence will continue to involve helping to ensure that products andservices are delivered with zero defects, on time, and at target cost. This will involve the strategicdeployment of management approaches, such as lean (total quality) management and Six Sigma.Professional accountants in business should be in a position to use and advise on these managementapproaches, as well as on the application of advanced management accounting tools, such as processanalysis, strategic and operational cost management, and resource consumption accounting.

Implementing performance measurement frameworks and systems to help foster a common view onperformance, and providing information that non-accountants find useful and understandable at anoperational level, involve being organizationally aware and attuned to the needs of others.



Manage resources andperformance throughunderstanding the drivers of shareholder and stakeholdervalue and aligningindividual andorganizational goals andobjectives and rewards tothese drivers

Support implementation of strategic and operationalperformance management,measurement, and reportingsystems and processes

Review strategic andoperational performancegaps for process and supplychain improvement andensure that processes andcontrols to detect andprevent fraud are put inplace

Design and implementperformance-drivenstrategic and processmeasurement and reportingsystems, and provideadequate information andanalysis to support deliveryof performance insights

Driver 8: Professional Accountants Driving ffective and Transparent Communication

To successfully drive (changes in) effective and transparent communication, professionalaccountants in business need to:

Implement business communications that respond to the expectations of stakeholders andconnect business and financial reporting to all the drivers of sustainable organizations

Evaluate and improve financial and business reports and enabling systems and processes,particularly to capture wider non-financial measures of social, environmental, and economicperformance

Prepare financial statements and business reports in compliance with standards and regulatoryrequirements by efficiently managing and adapting financial accounting and otherperformance measurement systems to respond to current and future developments


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Context

Flowing from their responsibilities in providing (a) financial leadership and navigation, (b)performance management and measurement, and (c) the recording of financial transactions,professional accountants in business have to support organizational transparency and credibility

through reporting and communication with internal and external stakeholders about strategy, itsexecution, and performance of their organizations. This role will take on ever greater significance asglobalization, complexity, and technology increase the number of stakeholders and their informationneeds. The enlarged social, environmental, and economic footprint of many organizations causes agreater demand from various stakeholder groups for accountability information. Furthermore,organizations and their operations are not only becoming increasingly more complex, but also haveto deal with more complex rules and regulations. This challenges their ability to report andcommunicate in a concise and understandable way. These developments have led to increasinglyvoluminous, complex, and compliance-focused business and financial reports.

And to add to the challenges, regulators and standard setters across jurisdictions have often actedindependently of each other, meaning that many organizations are confronted with multiple sets of compliance and reporting requirements. Professional accountants in business should be placed tosupport their organizations by implementing better approaches and emerging techniques such asshort form reports, XBRL, and video streams to bet ter meet stakeholders demands. Professionalaccountants in business will also be expected to take the lead in helping investors and stakeholdersunderstand historical, current, and potential performance by providing clear messages and narrativesto explai n an organizations strategy, execution, and performance.



Prepare high-qualitybusiness and financialcommunication andreporting to enablemanagers, investors, andstakeholders to make aninformed assessment of theorganizations performanceand prospects

Support transparentcommunication andreporting internally andexternally with materialinformation and analysisand effective presentation toinvestors and otherstakeholders, while at thesame time ensuring thatfinancial statementpresentation fairlyrepresents an organizationsperformance

Internal audit of information systems andprocesses, as well as theperformance informationitself, so as to ensureobjectivity both in fact andappearance

Capture financialtransactions and non-financial measures of performance, and preparehigh-quality businessreporting to stakeholders,including investors,customers, employees,regulators, and suppliers


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Summary of the Expectations Placed Upon Professional Accountants in Business

I M

P A C T O F M E G A T R E N D S

Roles Creators of value Enablers of value Preservers of value Reporters of value

Drivers ofSustainableOrganizations

Typical job titles:Executive directorCFO/FDControllerDirector/Head of strategy andplanningChange managementlead/coordinator

Typical job titles:Business unit controllerManager of finance andaccounting departmentManagement information/ analysis department managerFinancial or performancemanager/analyst

Typical job titles:Risk and business assurancemanagerGovernance and compliancemanagerInternal audit department/ business assurance manager

Typical job titles:Head of financial or businessreportingFinancial/performance analystInvestor relations manager

Customer andStakeholderFocus

Facilitate a focus on sustainablevalue creation by ensuring astrong link between strategy,governance, and sustainability tosupport the delivery of value tocustomers and stakeholders

Ensure organizations makesustainable customer- andstakeholder-focused strategicand operational decisions,implement appropriatestrategies, and evaluate theirongoing relevance and success

Monitor and ensure that org-anizations effectively andefficiently achieve theirsustainable strategic andoperational targets and goals

Effectively communicate howvalue is delivered to customersand stakeholders to internalmanagement and operationsand, where appropriate, withinexternal reporting, such as theannual report

EffectiveLeadership andStrategy

Set strategic direction bydefining a value proposition thattakes advantage of theorganizations strengths andweaknesses, and being aware ofthe critical points at which anorganization needs to makestrategic decisions

Frame key questions and issuesfor consideration, and providingmanagerial and operationaldecision makers with relevantinsight and analysis

Identify, prioritize, manage,control, and mitigate strategicand operational risks within thecontext of the adequacy ofgovernance processes andpractices

Provide management, as well asexternal stakeholders, withanalysis and insights on driversof sustainable value creation

IntegratedGovernance, Riskand Control

Facilitate an understanding of anorganizations appetite for riskand deliver aligned and effectivegovernance, risk and controlpractices to achieve a balancebetween conforming with rulesand regulations and drivingsustainable organizationalsuccess

Implement enterprise riskmanagement and control as astrategic activity and an integralpart of an organizationsgovernance system, as well asinto all other decision-makingprocesses in the organization

Evaluate policies, procedures,and processes to managegovernance, risk and (internal)control systems, includingcontrol objectives that supportthe delivery of an organizationsmission and strategic objectives,in accordance with anestablished risk appetite

Provide management, as well asexternal stakeholders, withinformation on the organizationsopportunities and risks, and theperformance of its governance,risk management, controlprocesses, and systems

Innovation andAdaptability

Manage innovation in the financeand accounting function tofacilitate its development, and tosupport its input into developingan organizations other innovation and R&D activities

Participate in the evaluation andimprovement of processes andincentives that facilitate andnurture innovation andadaptability

Implement measures ofinnovation that objectivelyassess its financial and non-financial impact and identifypossible areas of improvement

Report on innovative capabilitiesand results and the impact ofR&D investment, and futureplans and priorities


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I M P A C T O F M E G A T R E N D S

Roles Creators of value Enablers of value Preservers of value Reporters of value

Drivers ofSustainableOrganizations

Typical job titles:Executive directorCFO/FDControllerDirector/Head of strategy andplanningChange managementlead/coordinator

Typical job titles:Business unit controllerManager of finance andaccounting departmentManagement information/ analysis department managerFinancial or performancemanager/analyst

Typical job titles:Risk and business assurancemanagerGovernance and compliancemanagerInternal audit department/ business assurance manager

Typical job titles:Head of financial or businessreportingFinancial/performance analystInvestor relations manager

FinancialManagement

Understand and interpret thefinancial health of organizations andplay a leadership role in developingand implementing a financialstrategy to deliver an organizationsstrategic objectives

Support directors, management,and operations in understanding thefinancial health of organizations andprogress in delivering financialobjectives, and providing theinformation and analysis needed toimprove sustainable value creation

Examine systems that generatefinancial and non-financial infor-mation and ensure that they areworking within prescribed stan-dards of accuracy and reliability,and that such informationrealistically reflects the performanceof the organization

Provide a detailed knowledge offinancial reporting standards toensure that they are correctlyapplied

People and TalentManagement

Participate in identifying andimplementing people and talentmanagement strategies andpolicies for the wider organizationand the finance function, includingthe alignment of incentives

Focus individual and teamdevelopment on enhancinggeneralist skills, including anunderstanding of business contextand priorities, providing high-qualitymanagement information andanalysis and business partneringto gain trust within widerorganization

Ensure a questioning mindsetcapable of identifying risks andopportunities and serve aspromoters of integrity, transparency,and expertise

Report on how organizationalinvestments in human capitaldevelopment lead to the generationof shareholder and stakeholdervalue

StrategyExecution

Manage resources and per-

formance through understandingthe drivers of shareholder andstakeholder value and aligningindividual and organizational goalsand objectives and rewards tothese drivers

Support implementation of strategic

and operational performancemanagement, measurement, andreporting systems and processes

Review strategic and operational

performance gaps for process andsupply chain improvement andensure that processes and controlsto detect and prevent fraud are putin place

Design and implement

performance-driven strategic andprocess measurement andreporting systems, and provideadequate information and analysisto support delivery of performanceinsights

Effective andTransparentCommunication

Prepare high-quality business andfinancial communication andreporting to enable managers,investors, and stakeholders tomake an informed assessment ofthe organizations performance andprospects

Support transparent communicationand reporting internally andexternally with material informationand analysis and effectivepresentation to investors and otherstakeholders, while at the sametime ensuring that financialstatement presentation fairlyrepresents an organizationsperformance

Internal audit of informationsystems and processes, as well asthe performance information itself,so as to ensure objectivity both infact and appearance

Capture financial transactions andnon-financial measures ofperformance, and prepare high-quality business reporting tostakeholders, including investors,customers, employees, regulators,and suppliers


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Appendix 1: Megatrends and Emerging Issues Driving Change in the BusinessEnvironmentGlobalization

The globalization of trade, resources, operations, products and services, economic cycles, and capitalmarkets, has been one of the motors for socio-economic development and the creation (anddestruction) of wealth. In an increasingly globalized world, products can be produced anywhere,using resources located anywhere, by a company situated anywhere, and selling anywhere.

The interconnectedness of increasingly global markets presents opportunities and challenges.Challenging issues for organizations, governments, and international organizations include the needfor (a) more effective governance, regulation, and oversight, as well as (b) more effective politicaland organizational infrastructures and processes to minimize the risks associated with theglobalization process.

Two significant global issues will impact organizations and markets and hence the role of professional accountants in business. The first is the diffusion of economic power in the globaleconomy across a wider range of regions and countries, underpinned by the deployment of information technology, greater economic openness, and the growing size and reach of multinationalcompanies. 10 The second issue is sustainable development, and in particular climate change, whichhas now become a defining issue of our era. With this increased attention has come an increaseddemand for reliable decision-making information.

The quest for sustainable development is already starting to transform the competitive landscape,which will force companies to change the way they think about products, technologies, processes,and business models. 11 Increased social, environmental, and economic pressures will also forceorganizations across the globe to better meet demands for more transparency, ethical commitments,and improved approaches to delivering governance, risk and internal control structures and

processes.

Complexity

Complexity drives a multitude of challenges. A growing world population demands new, better,faster and cheaper products and services with ever more choice and options. This all adds to thecomplexity of the economic cycle and the need to implement strategies more quickly and efficiently.

Speed to market, short product lifecycles, narrower profit windows, and fragmentation of massmarkets into niche markets (mass customization) bring significant changes to managementphilosophies, structures, strategies for success, and performance and financial management.

This increased economic activity creates all kinds of governance, safety, environmental, and socialside effects that society wants to keep in check. Complexity can also result from a low-trustenvironment between business, governments, and the wider public, and is likely to get worse when

10 Accenture, Strategies for achieving high performance in a multi-polar world 11 Why Sustainability is now the key driver of innovation , Harvard Business Review, September 2009
http://nstore.accenture.com/IM/PDF/accenture_MultiPolarWorldFinalReport.pdfhttp://nstore.accenture.com/IM/PDF/accenture_MultiPolarWorldFinalReport.pdfhttp://nstore.accenture.com/IM/PDF/accenture_MultiPolarWorldFinalReport.pdfhttp://hbr.harvardbusiness.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation/ar/1?cm_re=homepage-081009-_-lede-2-_-headline-imagehttp://hbr.harvardbusiness.org/2009/09/why-sustainability-is-now-the-key-driver-of-innovation/ar/1?cm_re=homepag