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INVITATION TO COMMENT
Guide for Commentators
This Consultation Paper, Competent and Versatile: How Professional Accountants in Business Drive
Sustainable 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.
IFAC’s Professional Accountants in Business (PAIB) Committee would like to receive comments on
all matters addressed in this Consultation Paper and is particularly interested in comments on the
matters set out below:
Discussion Questions
1. Does the paper fairly and usefully represent the diverse roles and domain of professional
accountants in business? Please suggest ideas on how we can enhance the paper to become a
useful tool in (a) creating awareness of the important roles professional accountants play in
creating, enabling, preserving, and reporting value for organizations and stakeholders, and (b)
identifying how IFAC could assist its member bodies and associates in enhancing the
competence of their members.
2. What additional tools could IFAC develop to assist its member bodies and associates to
promote and communicate the roles of professional accountants in business to various
audiences, including employers, governments, and regulators?
3. Do you agree with the drivers of sustainable organizations that lead to long-term sustainable
value creation, as identified in Part 2 and described in Appendix 2? If not, what alternatives
would you suggest?
4. Would IFAC member bodies and associates find it useful for an international competency
framework 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 to
use the description of the key expectations placed upon professional accountants in business in
Part 4?
2
Comments are requested by November 30, 2010. Comments may only be submitted electronically
through the IFAC website (www.ifac.org), using the “Submit a Comment” link on the Exposure
Drafts and Consultation Papers page. Please note that first-time users must register to use this feature.
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 and
feedback provided that each copy bears the following credit line: “Copyright © September 2010 by
the 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 COMMITTEE
CONSULTATION PAPER
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Chairman’s Foreword
Global recognition of professional accountants as business leaders and strategic partners in building
long-term sustainable organizational success is the vision and central tenet of IFAC’s proposed
Professional 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 promote
and 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 roles
by facilitating the communication and sharing of good practices and ideas.
Competent and Versatile, How Professional Accountants in Business Drive Sustainable
Organizational Success, provides both IFAC and its members and associates with a resource to
enhance the perception of professional accountants in business. It explores the roles that they
perform, and invites consideration of the possibility that this perception might be further enhanced
through development of an international competency framework.
This Consultation Paper builds on the PAIB Committee’s 2005 paper, The Roles and Domain of the
Professional Accountants in Business. However, this new approach provides an objective analysis of
the expectations placed on professional accountants in business by their employing organizations in
the 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 well
positioned to achieve sustainable success over the long-term. An employer based view of the
expectations of professional accountants in business is a demand-driven response to understanding
the future roles and expectations placed on such professional accountants.
Highlighting the breadth of roles and characteristics of professional accountants in business and the
expectations that will be placed on them going forward is intended to be useful in communicating to
employers, professional accountants, governments and regulators. Individual professional accountant
members might also find the approach useful in making their colleagues and employers aware of the
scope of their competence, expertise and potential contributions to driving sustainable organizational
success.
I believe this paper is an important contribution to improving common understanding within the
accountancy profession and beyond of the work of our colleagues who work in business and public
service. It will be a better contribution if it is improved through the insights of as many interested
parties 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 to
identify how this work can be best exploited to communicate with various audiences, including
employers, governments and regulators. If the perception of professional accountants in business in
your jurisdiction is not as it is described in this paper, I invite you to consider what actions need to be
taken to change the perception and to enhance the recognition of your members and students.
Roger Tabor
Chairman, Professional Accountants in Business Committee
September 2010
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Overview
This 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 organizational
sustainability, and what is required to deliver economic, social, and environmental performance, this
paper aims to help IFAC and its members and associates to increase awareness of the important roles
professional accountants play in driving sustainable value creation. Such an approach will also assist
in ensuring the acquisition and development of required professional skills and competences among
professional accountants in business.
Future expectations governing the way professional accountants in business should support the
development of sustainable organizations are analyzed in light of the emerging challenges affecting
the 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 support
their 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 professional
accountants in business.
Sustainable development and the sustainability of organizations have become mainstream issues for
politicians, consumers, and business leaders. From an environmental and social perspective,
sustainability issues are transforming the competitive landscape, forcing organizations to change the
way they think about products, technologies, processes, and business models. From a financial
perspective, the primacy of shareholders as owners and maximizing wealth creation for this
constituency is being challenged, particularly where it has become evident that their short-term
financial interests can be incompatible with their long-term viability. Long-term sustainable value
creation requires responsible organizations to direct their strategies and operations to achieving
sustainable economic, social, and environmental performance. It also requires incorporating wider
stakeholder perspectives and issues into decision making.
Ensuring that organizations pursue sustainable business models and development practices will
require 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 accountancy
profession and professional accountants to better integrate and account for sustainability is an
essential part of the response.
Governing bodies and business leaders should be focused on the long-term sustainability of their
organization, and they should be confident that their business models will deliver this. Professional
accountants in all types of organization have a significant role in framing business models,
challenging conventional assumptions of doing business and redefining success; encouraging and
rewarding the right behaviors; ensuring that information flows to support decisions; and ensuring that
monitoring and reporting performance go beyond the traditional ways of thinking about economic
success.
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Highlights
Part 1: Clarifies who professional accountants in business are and where they work. This section
includes a description of the four generic roles that they perform as creators, enablers, preservers and
reporters 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 professional
accountants in business. These drivers were defined in light of an analysis of the overarching forces
of change in the business environment and are explained in Appendix 2. The drivers were also
identified by drawing on various sources, including The CIMA Business Success Wheel and
management 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 professional
skills 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 they
will need to perform to support sustainable and successful organizations. The activities are captured
under each of the eight drivers identified in Part 2.
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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 key
activity 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 make
decisions, and challenging assumptions and conventional thinking. Examples of job roles
within which enabling value creation by others is a key activity include business unit
controller; business, financial, or performance analyst; management accountant; and cost
accountant. In other words, these are professional accountants who will typically assist and
guide managerial and operational decision making and implementation of strategy as business
partners.
A Conformance Dimension
As preservers of value in organizations, by identifying, prioritizing, managing, and controlling
strategic and operational opportunities and risks. Examples of job roles primarily dedicated to
the 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 financial
transactions and non-financial measures of performance, and (b) preparing high-quality
business and financial reporting to stakeholders, including investors, customers, employees,
regulators, and suppliers. Examples of job roles within which reporting on value is a key
activity include group controller, head of reporting, investor relations manager, and financial or
management accountant.
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These examples of positions are not limited to the aspect of the role they illustrate here, and a
professional accountant in business might perform elements of all four dimensions within one job
function. This is particularly so in leadership positions: for instance, within the role of chief financial
officer, some elements will focus on creating value (e.g., strategy development and striving for
growth); some on enabling value (e.g., supporting the governing body and senior management in
making decisions and facilitating the understanding of performance of other organizational functions
or units); some on preserving value (e.g., mitigating strategic risk and implementing effective internal
control systems, and asset management); and some on reporting value (e.g., ensuring relevant and
useful internal and external business reporting). Professional accountants in highly specialized roles
in 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).
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The domain of professional accountants in business (Figure 1) spans the four roles as well as
capturing how the roles align to the internal working of organizations, represented here by describing
the widely used management (Deming) cycle steps: plan, do, check, and act.
The performance and conformance dimensions are derived from IFAC’s International Good Practice
Guidance, Evaluating and Improving Governance in Organizations. The principles in the guidance
support an appropriate balance between conformance and compliance on the one hand, and business
performance, and value enabling and creation on the other. The professional accountant in business
plays a key role in both these dimensions and in optimizing the balance between the two (see
“Balancing Performance and Conformance Responsibilities”).
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1
See the various professional designations among IFAC’s membership.
2
See World Bank definition of inclusive growth.
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emerging economies. Long-term sustainable success requires responsible organizations to direct their
strategies 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 global
accountancy profession and professional accountants as organizational and financial navigators,
contributing to the implementation of measured and effective responses to help foster sustainable
economic 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 remains
aligned with the changing needs of organizations as employers of professional accountants.
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3
Megatrends means a general shift in thinking or approach affecting countries, industries, and organizations.
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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 a
successful course to be charted for the organization, by overcoming organizational challenges and
proactively identifying opportunities. It also incorporates a resolve to challenge flawed analysis and
unsound, or unethical, decisions. The mindset complements formally taught skills, but cannot easily
be examined or regulated. The professional accountant’s mindset will need to embrace:
Professional judgment
Professional accountants in business carry out their roles in different modes, including
directing, influencing, evaluating, and informing. Furthermore, the vast range of circumstances
and situations that can arise in organizations of any type, industry, and size renders detailed
prescription of rules ineffective for guiding management decisions. Therefore, the quality of
professional judgment exercised becomes a differentiating factor for high-performing
professional accountants in business. This includes having a healthy professional skepticism
that relies on seeking evidenced-based decision making and challenging “received wisdom.”
5
Issued by the International Ethics Standards Board for Accountants.
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Customer and
Stakeholder Focus
Integrated Governance,
Risk and Control
Innovation and
Adaptability
Financial Management
Strategy Execution
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To successfully drive (changes in) customer and stakeholder focus, professional accountants in
business need to:
Support an organization in its efforts to engage customers and stakeholders, and to facilitate
an understanding of how they view the organization and its performance
Develop in-depth knowledge and understanding of the critical drivers of customer and
stakeholder value6
Align the role of the finance function with wider organizational efforts to deliver customer
and stakeholder value
Context
A sharper customer and stakeholder focus is vital to achieving sustainable success and is
facilitated by globalization and new technologies that, for example, (a) allow greater
decentralization, where decision making is close to the customer, and (b) facilitate greater
innovation by fostering collaborative relationships in a global network of strategic partners and
alliances. On the other hand, increased complexity means that organizations need to direct their
attention to many issues, which can easily cloud their view of changes in customer and other
stakeholder needs and necessary adjustments to their business model.
Professional accountants in business need to be a part of the effort to meet customer7 and other
stakeholder needs, and supporting their organizations in aligning all (other) drivers of sustainable
organizational success towards achieving increased customer and stakeholder focus. They should
also be positioned to work in partnership with other organizational functions to address
complexity 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 and
services.
Exactly how professional accountants help to nurture a customer-focused organization depends
on their position in an organization. At a leadership level, they should be positioned to help
foster a strong link between business strategy, governance, and sustainability, so that
organizations can ensure that customer and stakeholder focus goes hand in hand with the
objective of achieving sustainable value creation. In other positions, professional accountants, for
example, identify, understand, and monitor groups of customers and stakeholders to provide
appropriate 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 finance
functions 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 in
Organizations.
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 in
their efforts to create value for customers.
Facilitate a focus on Ensure organizations make Monitor and ensure that Effectively communicate
sustainable value creation sustainable customer- and organizations effectively how value is delivered to
by ensuring a strong link stakeholder-focused and efficiently achieve their customers and stakeholders
between strategy, strategic and operational strategic and operational to internal management and
governance, and decisions, implement targets and goals operations and, where
sustainability to support the appropriate strategies, and appropriate, within external
delivery of value to evaluate their ongoing reporting, such as the
customers and stakeholders relevance and success annual report
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 organization’s risk profile and appetite, and
recommend optimal strategies
Effectively articulate strategy and business case(s) for pursuing strategic options, and establish
a strong business case to highlight how improved environmental and social performance can
translate into enhanced business performance
Support the strategic planning and implementation process with insight and analysis of the
organization 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 strategic
leadership in executive (C-suite) positions and senior management roles. This will involve (a) adding
value through setting the tone in the organization, (b) participating in strategy and planning to chart a
course for the organization, as well as (c) providing information and analysis and maintaining
strategic control and financial navigation to ensure execution of strategy. Professional accountants in
business should play a part in the key areas of strategic leadership: strategy (what do we want to
achieve?); values and attitudes (what do we stand for?); and the business model (how do we organize
to create, deliver, and capture value—economic, social, or other?).
They should also be positioned to influence the way their organizations integrate governance and
sustainability into their objectives, strategies, management, and definitions of success. Facilitating
sustainable organizations and ensuring sustainable value creation will involve professional
accountants in business in:
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Set strategic direction by Frame key questions and Identify, prioritize, manage, Provide management, as
defining a value proposition issues for consideration, control, and mitigate well as external
that takes advantage of the and providing managerial strategic and operational stakeholders, with analysis
organization’s strengths and and operational decision risks within the context of and insights on drivers of
weaknesses, and being makers with relevant insight the adequacy of governance sustainable value creation
aware of the critical points and analysis processes and practices
at which an organization
needs to make strategic
decisions
To successfully drive (changes in) integrated governance, risk and control, professional accountants
in business need to:
Provide leadership on how risk and control integrates with leadership, strategy, and
governance to ensure both compliance and performance
Integrate governance, risk management, and control into the strategy, operations, and
stakeholder 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 in
line with social, environmental, and economic changes.
Context
Professional accountants in business should be positioned to perform significant roles in integrating
and fostering close links between governance, risk management, and control so as to ensure that they
are not dealt with in functional silos. As integrators, professional accountants should be able to
ensure that control systems and processes support the delivery of the wider strategic objectives of an
organization, helping to identify opportunity and risk, as well as providing (internal) control over
financial reporting.
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Current terminology often refers to integrating governance, risk, and compliance (GRC), and is
increasingly associated with technology and how it can ease the burden of organizations of managing
and sharing information and dealing with risk and controls, given the sheer complexity of their
operations. The rising interest in the convergence of governance, risk, and compliance focuses on
better integration of policies, procedures and processes, and technology (systems) to minimize risk
exposure and comply with external and internal regulations, policies, or mandates. However, this
perspective (a) can inhibit reaching the ultimate objective that governance, risk and control will be
used to advance organizational objectives and execute strategy, and (b) can also mask the importance
of the behavioral factors that create sustainable value creation and ethical performance, such as
culture and values.
The role of professional accountants in business in evaluating and improving governance, risk and
control systems is a key theme of IFAC’s International Good Practice Guidance, Evaluating and
Improving Governance in Organizations, which emphasises that governance, risk and control
activities 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 control
system that:
Supports executives/managers in moving an organization forward in a cohesive integrated and
aligned manner to improve performance, while operating effectively, efficiently, ethically, and
legally 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 drivers
of sustainable value in Appendix 2.
In respect to risk management, professional accountants in business need to play a leading role in
ensuring that enterprise risk management forms an integral part of an organization’s governance
system and is delivered by line management. Professional accountants in business are increasingly
looked on to take the lead on risk management, in particular by orchestrating a common view on an
organization’s risk profile. Therefore, they should be seen to be able to facilitate the identification
and communication of the organization’s risk appetite and risk capacity, and to help to balance the
avoidance of risk with seizing opportunities in accordance with an organization’s risk appetite. In
encouraging an integrated enterprise approach to risk, professional accountants in business can also
ensure that risks are viewed and managed in a more holistic way, so that individual risks are not
assessed and dealt with in isolation, or in a linear, unconnected way.
Specifically in relation to (internal) control, professional accountants in business should help to
ensure that controls are embedded in processes with clear lines of accountability, rather than relying
on the adequacy of assurance from outside the process. Professional accountants in business should
also be able to document and demonstrate business processes and how owners are managing the
various risks and applying appropriate controls.
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To successfully drive (changes in) innovative and adaptive capability, professional accountants in
business need to:
Assess how to approach managing and measuring the impact of innovation activities
Facilitate the implementation of revised working methods, processes, and systems to support
new products/services or approaches to their delivery
Identify and facilitate the role of the finance and accounting function in supporting innovation
and research and development (R&D), including incentivizing behaviors to support an
adaptive capability
Context
Professional accountants in business should be able to support innovation in both the finance
function as well as in the wider organization, whether in relation to the way of doing business, or to
product or process.
In the wider organizational context, professional accountants in business should participate in
measuring, reporting, and evaluating innovative and adaptive performance and in improving the
innovative and adaptive capability of the organization.
As business partners, professional accountants can also be involved in and support each of the key
stages of innovation development, including innovation and opportunity selection, concept and
design definitions, product realization, and required production and service support. They should also
be able to manage the change management aspects of product and process innovation and change,
obtaining the buy-in of users where needed. In this regard, professional accountants will be expected
to ensure that new developments are properly researched, meet user requirements, and are thoroughly
tested and successfully implemented and embedded within the organization.
Within the context of the finance function and accounting innovations, professional accountants in
business should be able to adapt to changing circumstances, and to deliver innovative approaches to
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finance and accounting structures and processes, whether it be in relation to (a) delivering shared
services or outsourcing, (b) providing expert services (e.g., tax, risk management, merger and
acquisitions, and due diligence), or (c) providing financial leadership and support to the wider
organization. Regarding new accountancy innovation and adoption: tomorrow’s management
accountants should endeavor to understand the different opportunities innovations offer. This allows
them to shape the design and use of the innovation for their own organization. Making sensible
choices about which innovations to pursue, and driving those choices to the implementation stage, is
likely to become a key role for management accountants. This role might well stretch their technical
capabilities, but will also require an understanding of the broader (e.g., social and behavioral) issues
involved in implementing those innovations.8
Manage innovation in the Participate in the evaluation Implement measures of Report on innovative
finance and accounting and improvement of innovation that objectively capabilities and results and
function to facilitate its processes and incentives assess their financial and the impact of R&D
development, and to that facilitate and nurture non-financial impact and investment, and on future
support its input into innovation and adaptability identify possible areas of plans and priorities in
developing an improvement relation to R&D and other
organization’s other innovation activities
innovation and R&D
activities
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 organization’s strategic objectives
Evaluate financial implications, capital requirements, and expected returns of strategic options
Ensure the efficiency, integrity, and effectiveness of processes and systems in financial
reporting, and manage changes to financial reporting standards
Context
Financial management and navigation are, and will continue to be, at the core of what many
professional accountants do in organizations. The main activities of professional accountants should
continue to include:
8
Risk Manager or Risqué Manager, The New Platform for the Management Accountant, Baldvinsdottir G., Burns J.,
Nørreklit H., and Scapens R.
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9
CIPFA also provides a public financial management process architecture and a whole system context for financial
management in the public sector that underpins the delivery of public services and helps achieve sustainable social
outcomes.
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Understand and interpret Support directors, Examine systems that Provide a detailed
the financial health of management, and generate financial and non- knowledge of financial
organizations and play a operations in understanding financial information and reporting standards to
leadership role in the financial health of ensure that they are ensure that they are
developing and organizations and progress working within prescribed correctly applied
implementing a financial in delivering financial standards of accuracy and
strategy to deliver an objectives, and providing reliability, and that such
organization’s strategic the information and analysis information realistically
objectives needed to improve reflects the performance of
sustainable value creation the organization
To successfully drive (changes in) people and talent management, professional accountants in
business need to:
Support the development of human resource and talent management strategies and policies
focusing on skills requirements, career development, and retention of critical staff (whether in
the 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 and
accounting
Understand how a talent management program and specific human resource policies and
activities can apply to the finance function, for example in relation to ensuring adequate
recruitment, retention, developing future finance and business leaders, effective succession
planning, meeting future skills requirements, and recognizing high-performing employees and
teams
Context
Professional accountants working as business leaders and managers will need to be able to deploy
people and talent management strategies, especially to retain critical staff and to engage talent. This
will also involve (a) exploiting new technologies to engage talent and expertise outside the
organization, 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 organization’s strategic and operational objectives. Professional accountants working in
smaller organizations without human resource departments will often be expected to undertake
strategic and operational people management activities.
The development of the finance function to better support the wider organization to fulfill its
business objectives and to provide adequate stewardship and challenge (of flawed analysis and
unsound, 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) succession
planning, (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 a
clear mandate from the board and senior management to encourage a culture of scrutiny and
challenge, and to deal with cultural issues, such as a cultural reluctance in some offshore locations to
challenge experts and those in authority.
Professional accountants in business should be positioned to manage their own career path
development, as well as to manage the development of others when in managerial positions. A part
of 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 Focus individual and team Ensure a questioning Report on how
and implementing people development on enhancing mindset capable of organizational investments
and talent management generalist skills, including identifying risks and in human capital
strategies and policies for an understanding of opportunities and serve as development lead to the
the wider organization and business context and promoters of integrity, generation of shareholder
the finance function, priorities, providing high- transparency, and expertise and stakeholder value
including the alignment of quality management
incentives information and analysis
and “business partnering” to
gain trust within wider
organization
To successfully drive (changes in) strategy execution, professional accountants in business need to:
Implement performance management and measurement approaches and systems, including
establishing performance metrics in light of strategic and operational goals and objectives, and
evaluating performance against these
Identify operational performance gaps for process and supply chain improvement so as to
provide 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 and
business management reporting feeds into effective external communications to stakeholders
Context
Professional accountants in business should be placed to manage financial and non-financial
resources and performance through the understanding of strategic goals and objectives and the
drivers of stakeholder value.
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As well as being able to implement frameworks and systems for measuring progress towards the
achievement of strategic goals and objectives, professional accountants in business should also be
positioned to design and implement process measurement and reporting systems, providing adequate
information and analysis to support operational feedback and continuous improvement activities.
Achieving operational excellence will continue to involve helping to ensure that products and
services are delivered with zero defects, on time, and at target cost. This will involve the strategic
deployment 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 management
approaches, as well as on the application of advanced management accounting tools, such as process
analysis, strategic and operational cost management, and resource consumption accounting.
Implementing performance measurement frameworks and systems to help foster a common view on
performance, and providing information that non-accountants find useful and understandable at an
operational level, involve being organizationally aware and attuned to the needs of others.
Manage resources and Support implementation of Review strategic and Design and implement
performance through strategic and operational operational performance performance-driven
understanding the drivers of performance management, gaps for process and supply strategic and process
shareholder and stakeholder measurement, and reporting chain improvement and measurement and reporting
value and aligning systems and processes ensure that processes and systems, and provide
individual and controls to detect and adequate information and
organizational goals and prevent fraud are put in analysis to support delivery
objectives and rewards to place of performance insights
these drivers
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
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, its
execution, and performance of their organizations. This role will take on ever greater significance as
globalization, complexity, and technology increase the number of stakeholders and their information
needs. The enlarged social, environmental, and economic footprint of many organizations causes a
greater demand from various stakeholder groups for accountability information. Furthermore,
organizations and their operations are not only becoming increasingly more complex, but also have
to deal with more complex rules and regulations. This challenges their ability to report and
communicate in a concise and understandable way. These developments have led to increasingly
voluminous, complex, and compliance-focused business and financial reports.
And to add to the challenges, regulators and standard setters across jurisdictions have often acted
independently of each other, meaning that many organizations are confronted with multiple sets of
compliance and reporting requirements. Professional accountants in business should be placed to
support their organizations by implementing better approaches and emerging techniques such as
short form reports, XBRL, and video streams to better meet stakeholders’ demands. Professional
accountants in business will also be expected to take the lead in helping investors and stakeholders
understand historical, current, and potential performance by providing clear messages and narratives
to explain an organization’s strategy, execution, and performance.
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
Customer and Facilitate a focus on sustainable Ensure organizations make Monitor and ensure that org- Effectively communicate how
value creation by ensuring a sustainable customer- and anizations effectively and value is delivered to customers
Stakeholder strong link between strategy, stakeholder-focused strategic efficiently achieve their and stakeholders to internal
Focus
IMPACT OF MEGATRENDS
governance, and sustainability to and operational decisions, sustainable strategic and management and operations
support the delivery of value to implement appropriate operational targets and goals and, where appropriate, within
customers and stakeholders strategies, and evaluate their external reporting, such as the
ongoing relevance and success annual report
Effective Set strategic direction by Frame key questions and issues Identify, prioritize, manage, Provide management, as well as
defining a value proposition that for consideration, and providing control, and mitigate strategic external stakeholders, with
Leadership and takes advantage of the managerial and operational and operational risks within the analysis and insights on drivers
Strategy organization’s strengths and decision makers with relevant context of the adequacy of of sustainable value creation
weaknesses, and being aware of insight and analysis governance processes and
the critical points at which an practices
organization needs to make
strategic decisions
Integrated Facilitate an understanding of an Implement enterprise risk Evaluate policies, procedures, Provide management, as well as
organization’s appetite for risk management and control as a and processes to manage external stakeholders, with
Governance, Risk and deliver aligned and effective strategic activity and an integral governance, risk and (internal) information on the organization’s
and Control governance, risk and control part of an organization’s control systems, including opportunities and risks, and the
practices to achieve a balance governance system, as well as control objectives that support performance of its governance,
between conforming with rules into all other decision-making the delivery of an organization’s risk management, control
and regulations and driving processes in the organization mission and strategic objectives, processes, and systems
sustainable organizational in accordance with an
success established risk appetite
Innovation and Manage innovation in the finance Participate in the evaluation and Implement measures of Report on innovative capabilities
and accounting function to improvement of processes and innovation that objectively and results and the impact of
Adaptability facilitate its development, and to incentives that facilitate and assess its financial and non- R&D investment, and future
support its input into developing nurture innovation and financial impact and identify plans and priorities
an organization’s other adaptability possible areas of improvement
innovation and R&D activities
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
Financial Understand and interpret the Support directors, management, Examine systems that generate Provide a detailed knowledge of
financial health of organizations and and operations in understanding the financial and non-financial infor- financial reporting standards to
Management play a leadership role in developing financial health of organizations and mation and ensure that they are ensure that they are correctly
and implementing a financial progress in delivering financial working within prescribed stan- applied
strategy to deliver an organization’s objectives, and providing the dards of accuracy and reliability,
IMPACT OF MEGATRENDS
strategic objectives information and analysis needed to and that such information
improve sustainable value creation realistically reflects the performance
of the organization
People and Talent Participate in identifying and Focus individual and team Ensure a questioning mindset Report on how organizational
implementing people and talent development on enhancing capable of identifying risks and investments in human capital
Management management strategies and generalist skills, including an opportunities and serve as development lead to the generation
policies for the wider organization understanding of business context promoters of integrity, transparency, of shareholder and stakeholder
and the finance function, including and priorities, providing high-quality and expertise value
the alignment of incentives management information and
analysis and “business partnering”
to gain trust within wider
organization
Strategy Manage resources and per- Support implementation of strategic Review strategic and operational Design and implement
formance through understanding and operational performance performance gaps for process and performance-driven strategic and
Execution the drivers of shareholder and management, measurement, and supply chain improvement and process measurement and
stakeholder value and aligning reporting systems and processes ensure that processes and controls reporting systems, and provide
individual and organizational goals to detect and prevent fraud are put adequate information and analysis
and objectives and rewards to in place to support delivery of performance
these drivers insights
Effective and Prepare high-quality business and Support transparent communication Internal audit of information Capture financial transactions and
financial communication and and reporting internally and systems and processes, as well as non-financial measures of
Transparent reporting to enable managers, externally with material information the performance information itself, performance, and prepare high-
Communication investors, and stakeholders to and analysis and effective so as to ensure objectivity both in quality business reporting to
make an informed assessment of presentation to investors and other fact and appearance stakeholders, including investors,
the organization’s performance and stakeholders, while at the same customers, employees, regulators,
prospects time ensuring that financial and suppliers
statement presentation fairly
represents an organization’s
performance
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
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 the
complexity 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 mass
markets into niche markets (mass customization) bring significant changes to management
philosophies, structures, strategies for success, and performance and financial management.
This increased economic activity creates all kinds of governance, safety, environmental, and social
side effects that society wants to keep in check. Complexity can also result from a low-trust
environment 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
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
Technology
High-speed technological forces continue to create an environment where rapid pace of innovation is
critical to success. Technological evolution opens up new dimensions for further growth with a
constant stream of new products and services, delivered via new development, production,
marketing, and distribution methods. In organizations, technology allows greater decentralization
where decision making is close to the customer and public service user. It also facilitates greater
innovation by fostering collaborative relationships among a network of strategic partners and
alliances.
Improved information and communication technology enables access to greater business intelligence
that drives management insight into customers and public service users and market dynamics. As
greater complexity increases the amount of data held by organizations, analytical and decision-
making capabilities will feature more than ever. Good decisions will, as ever, be rooted in insightful
analysis supported by professional judgment.
33
COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
34
COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
execute the organization’s strategic goals and objectives. Effective leadership creates an environment
in which an organization possesses an ability to learn, and to put into practice what it has learned
more quickly than its competitors to deliver customer and stakeholder value.
12
See IFAC’s IGPG on Evaluating and Improving Governance in Organizations.
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
Financial Management
Sustainable organizations will always have strong financial management underpinning their
decisions and performance, taking into account the opportunities and threats that stem from increased
globalization, complexity, and technology. The financial health of a company supports investment in
future growth and is important in supporting wider social and community goals (i.e., to support
employment and government tax revenues, etc.).
Effective management of financial performance objectives that is based on achieving sustainable
economic growth helps to ensure long-term sustainability. Sustainable organizations ensure that
financial strategy and navigation support long-term economic viability rather than focusing on short-
term earnings performance.
Such organizations have well-developed planning and forecasting at an organizational level, as well
as for specific business processes. A deep understanding of and insight into historical, current, and
potential performance forms the basis of developing strategy and setting credible stakeholder and
market expectations. Confidence in articulating where an organization is going financially helps
improve access to capital and confidence of stakeholders. Effective financial management also
involves delivering financial leadership in tax and treasury, cost and profitability improvement,
mergers and acquisitions, and raising finance and capital.
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COMPETENT AND VERSATILE
HOW PROFESSIONAL ACCOUNTANTS IN BUSINESS DRIVE SUSTAINABLE ORGANIZATIONAL SUCCESS
short supply. Globalization and technology not only open up access to new talent, they also increase
global competition for such resources.
People and talent management are also significant success factors in the development of financial
leadership and the finance function. The accountancy profession has been impacted by globalization
and the growing economic interdependence of countries, creating an increasingly competitive market
for the services of professional accountants. Enhanced global and regional mobility has created a
transient global finance workforce that puts pressure on an organization’s recruitment and retention
capabilities. Ensuring that finance functions have the right people with the right skills, organization,
motivation, and empowerment will be crucial in managing the uncertain times ahead (Talent and the
finance function, Cutting through the complexity, PricewaterhouseCoopers).
Strategy Execution
Sustainable organizations will generally have a clear focus on key drivers of organizational success
that is widely shared throughout the organization and its key stakeholders. Such a focus is achieved
by cascading strategies downwards into operational and tactical plans. Sustainable organizations are
disciplined in ensuring that (a) resource allocation decisions align with strategic direction, goals, and
objectives, and (b) performance measurement and reporting systems measure progress towards the
achievement of strategic and operational objectives.
To better support decision making and performance measurement, sustainable organizations will
have decision processes and enabling information management and technology to support insightful
financial and non-financial performance information (measures dealing with customers, internal
processes, employees, and suppliers) and analysis. This business intelligence provides insight into the
key drivers of shareholder and stakeholder value, and allows for better alignment of accountability
for results, and rewards and recognitions. Performance insights will also support operational
excellence and help to ensure that products and services are delivered with zero defects, on time, and
at target cost.
37
International Federation of Accountants
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