Errol Oh is executive editor of the The Star
There’s something about the unique mindset of accountants that sets them apart from other professionals – and a slew of recent studies from the profession bear this out.
Are accountants a breed apart? Do you need to possess certain characteristics to have a successful career in accountancy? What really goes on in the head of an accountant?
The first two questions are academic; change the profession and you can ask the same about engineers, doctors, salespeople, lawyers, architects, teachers or, yes, even journalists. But there’s a simple way to address the third question, thanks to a number of studies and surveys that pick the brains of CFOs.
Trawl through the findings and you will discover nuggets of insight and uniqueness that suggest that the mindset of accountants indeed different in some aspects. Because CFOs generally understand economics and finance well, they are more sensitive to signs of trouble. It is no surprise, therefore, that the Bank of America Merrill Lynch 2012 CFO Outlook fall update reports that never before has so much weighted on the minds of corporate finance chiefs.
In past installments of this survey of financial executives from large US companies, when respondents are asked to rate their economic and financial concerns, usually only two or three issues have stood out. This time, a majority of CFOs express concern about seven factors – a fact the report puts down to ‘the complexity and frailty of the US economy, as well as uncertainty about the upcoming US elections’ (interviews took place in July 2012).
When the BDO ambition survey 2012 asked more than 1000 CFOs of mid-sized companies planning foreign expansion to name countries that were considered risky to invest in, Greece landed in the top three; Iran heads the list, with 21% identifying it as the most risky for inward investment. The surprise is that the same proportion of respondents – 18% – mentioned Greece and Iraq. Syria and Libya come next, with 17% and 12% respectively.
Meanwhile, in a benchmark analysis of the finance effectiveness of more than 200 companies, PwC highlights some numbers that illustrate accountants’ high expectations. According to the firm’s report, Putting your business on the front foot, 80% of participants say the accuracy of their forecasts is critical to the running of the business, but only 45% believe the outputs are reliable. Over 90% of participants believe they have established governance frameworks to manage risk, but less than a quarter are truly confident that key controls are operating effectively. It is also worth noting that in the PwC-ACCA finance effectiveness survey 2012, which covers companies in Singapore, the majority of participants indicated that there was room for improvement in their risk management and control frameworks.
Is there a difference between government accountants and those in the private sector? To figure this out, a good place to start is Grant Thornton’s report, Charting a course through stormy seas: state financial executives in 2012. When respondents were asked to assess the level of trust and teamwork in their agency, almost half of executives and over a quarter of online respondents selected ‘neutral’. The report describes that as ‘that middle choice that avoided an opinion’. It adds: ‘It is unpleasantly surprising that so many executives could not or would not assess the level of trust and teamwork in their states’.