Transcript Changing Face of Business

Changing Face of
Business -Role of
Chartered Accountants
in Industry
Hyderabad,
August 3, 2012
By
CA P R RAMESH
Mega Trends/Disruptions
• Globalisation
• Changes in profile of business and business practices
• Technology
• Emergence of new services and extinction of traditional
services
• User activism
• Regulatory activism
• Investor activism
• Social and other networks
• Standards and laws requiring compliance more complex
Globalisation
• World is flat
• Geographical barriers still exist but being
dismantled
• Shift of economic activity and power
• Movement towards common global standards
and practices
Technology
• Mobile and handheld devices and their
influences
• Information
– speed
– size
– flexibility
• Information less private and more public
• Impact on services, jobs, etc. – e filing, XBRL,
etc.
Emergence of New Requirements
• Non-financial audits
• Non-financial certifications – carbon credit,
etc.
• Forensic
• Post Deal Integration
• Background checks, credit checks, etc/
• Litigation services and dispute resolution
Emergence of New Services and
Extinction of Traditional Services
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Anti-money laundering
Risk Management
Data Analytics
Emergence of control assurance, revenue
assurance, fraud risk assessment, concurrent
audit
Changes in Profile of Businesses and
Business Practices
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Disapproval of Mom-n-Pop businesses
Technology driven
Networks, alliances, mergers
Emergence of brands
High customer attrition and low customer loyalty –
seller beware
Challenges of employee career management and
motivation
Aggressive advertising and solicitation
Tendering and cost cutting
Availability of multiple options
User activism
• Class action suits
• Media – judge, jury and executioner
• Right to information
Investor activism
• Shareholders more aggressive
• Analysts scrutiny
• Role of Private Equity and Venture Capital
investors
Regulatory Activism
• New, stronger and tougher regulators – e.g. SEBI,
NFRA
• Investigative agencies active – e.g. SFIO, CBI, etc.
• Co-operation and exchange amongst regulators
• Action – swift, fair and certain
Social and Other Networks
• Facebook, Twitter, Yammer, etc.
• Using networks for marketing
• Using networks for collaborative solutions and
service delivery
The world of today is a very different place in terms of creativity,
self-expression, social belonging and sharing
Self-Promotion
Collaboration
Search
“Our tools for locating documents are
confusing and it is unclear who to turn to if
I have questions.
Mobility
Social
Networking
Compliance
• Accounting Standards
• Corruption, bribery, etc.
• Insider trading and capital markets related
laws
• Deposit of statutory dues
• TDS and other related obligations
Successful CFOs balance their roles
and tasks
The “Faces” are roles that
CFOs play:
Steward: Protect and
preserve the assets of the
organisation
Operator: Balance
capabilities, costs and
service levels to fulfill the
Finance organisation’s
responsibilities
Strategist: Provide
financial leadership in
determining strategic
business direction and
align financial strategies
Catalyst: Stimulate
behaviors across the
organisation to achieve
strategic and financial
objectives
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CFO Functions
Line Function
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Accounting
Financial Reporting
Treasury – funds management
Budgeting
Audit and Assurance
Taxation – Direct and Indirect
Compliance with laws
Strategic
• Key input provider to strategy
• Mergers and acquisitions
• Risk Management
Advisory
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Eyes and ears of CEO
Advisor to Board, Management
Representation to Government
Representation to Regulators
Communications
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Investor and analysts communication
Face of the entity to bankers
Face of the entity to capital markets
Face of the entity to regulators
So where does this leave CFOs? The top 10
challenges
Control
Challenges
Efficiency
Challenges
Performance
Challenges
Execution
Challenges
Change
and
Transition
Challenges
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1.
How do I ensure that the data the company relies on is accurate and
provides the most useful information?
2.
How do I reduce the burden of maintaining my control environment without
compromising its integrity?
3.
How should I organize finance to serve the needs of the different
stakeholders?
4.
Given the heterogeneous nature of finance’s roles, how do I attract, develop,
and retain the talent required to fulfill finance’s mission?
5.
How do I create a common language that empowers management to see
themselves the way investors do?
6.
How do I ensure that our investments in innovation and growth yield the
greatest returns?
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How can I partner with other senior managers to drive strategy execution
across the enterprise?
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How do I reduce costs while continuing to add value?
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How do we determine our key gaps?
10. Being “world class” in everything seems expensive and takes too long;
where should we focus?
What should Chartered Accountants in
Industry do?
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Be technology proficient
Technical up-to-date
Nimble
Have strong analytical skills
Jack of all and master of none
Transition from a book keeper to a business accountant
Be control conscious
Develop strategic thinking
Develop general management skills
Focus on communication skills
Be mobile
What should Chartered Accountants in
Industry do?
• Be relevant
• Maintain the highest level of INTEGRITY
Thank You