By Frank Byrt
Corporate accountants' short-term worries include relatively direct issues, such as rising energy prices, IT security threats, and government regulations. But over the long haul, they report concerns over such daunting issues as the impact of demographic shifts on the workforce to the replacement of the US dollar as the world's reserve currency, according to Drivers of Change in the US, an industry report on the changes and challenges facing the accounting profession now and in the future.
The report, issued March 4, is an analysis of a 2012 survey of 550 members of the Association of Chartered Certified Accountants and the Institute of Management Accountants who were asked to rank their concerns on a number of issues.
Survey results revealed that the most immediate concerns of corporate accounting professionals are:
- Rising fuel and energy prices.
- Cybersecurity challenges, such as terrorism, crime, and fraud.
- A further increase in the volume and complexity of legal regulation as governments respond to the continuing economic crisis.
In the medium term, 2016 to 2022, respondents said they're concerned about the following challenges:
- The changing age balance of the workforce and the increasing welfare needs of a senior society.
- A requirement for businesses to provide increased nonfinancial information and the continued emergence of integrated reporting models.
- The increasing importance of the accountant as a business partner to senior management and the need for accountants to have a broader skill set.
Long term, from 2023 onward, the drivers expected to have the greatest impact on US businesses and the accounting profession include:
- Potential changes in the global reserve currency, moving from the US dollar to either the euro or yuan.
- In an electronic world, a radical alteration of the system of using money as the basis of a system of exchange; this could preclude the need for financial institutions to make transactions.
- A change in the focus of global governance institutions, such as the World Bank, the International Monetary Fund (IMF), and the United Nations, as they face greater pressures to respond to global changes from emerging nations that are becoming more influential.
According to the report",Accountants will be expected to play a far greater role in everything from strategic decision making to the design of new revenue models, while maintaining a balance between financial stewardship and entrepreneurism in a global economy where businesses are operating in a volatile, uncertain, and competitive environment."
The report concludes that businesses should:
- Assume and plan for volatility. With uncertainty being the new normal, businesses have to factor in turbulence as a very real possibility and develop strategies for a range of different economic and market scenarios.
- Build the radar. Systematic, organization-wide approaches are required for scanning the future external environment to prepare for a wide range of possibilities. Tolerance of uncertainty and curiosity should become critical development priorities for managers and leaders alike.
- Pursue technology leadership. The pace and disruptive potential of information and communications technology development has placed technology at the heart of strategy and operations of businesses of almost every size. New mind-sets and approaches to technology management are required to exploit and extract full value from the next decade of advances.
- Prepare for true globalization. Development of a truly global operating model is becoming a priority. A clear emphasis is required on leveraging technology effectively. Equally important is developing the capability of management to work with, adapt to, and get the best out of a multilocation, multicultural, and age-diverse workforce.
- Develop a curious, experimental, and adaptable mind-set. A critical success factor in an increasingly complex and fast-changing environment is building a "curious culture." This implies nurturing an environment that's open to external ideas and in which participants are encouraged to forge a network of strong working relationships across the entire business ecosystem.