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By Helen Brand OBE, Chief Executive, ACCA

The second ACCA and IMA CFO Month starts today, and this year we are focussing on all things digital.

Today we live in an era of ‘digital Darwinism’, a time where technology and society are evolving faster than many organisations can adapt to the changes. This is one of the many underlying factors that led to the demise of stores such as Blockbuster and Borders. Yet technological advances continue to drive economic growth.

As trusted advisers to business, accountants and finance professionals around the world are expected to lead, not follow. The profession has historically been quick to identify and then exploit the huge potential of emerging technologies – from the earliest known records of commerce, to the earliest commercial computer systems.

Accountants’ enthusiastic use of the first programmable computers and widespread adoption of the spreadsheet helped to turn accountancy into the profession it is today; embracing of emerging technologies will turn it into the profession it aspires to be tomorrow.

Many new technologies have the capacity to influence the future of business and the accountancy profession, over the next decade and beyond.

ACCA and IMA’s latest report Digital Darwinism: thriving in the face of technology change, focuses on 10 technology trends with the potential to reshape the profession and business landscape significantly. These are developments that will change the way people live and work, and responses to them will determine the future success of individuals, organisations, and even countries.

The 10 technology trends that will have the potential to significantly reshape the business and accountancy landscape are:

  1. mobile;
  2. big data;
  3. artificial intelligence and robotics;
  4. cyber security;
  5. educational;
  6. the cloud;
  7. payment systems;
  8. virtual and augmented reality;
  9. digital service delivery;
  10. social.

Over the coming weeks during CFO Month 2014 we will be looking at some of these trends in a little more detail. In the meantime, to find out more about the technology trends impacting on the accountancy profession, please read the full report.

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By Helen Thompson, head of PR, ACCA

IR can help restore trust in business, but now is the time to put the Framework into action

The launch today of the IIRC’s Integrated Reporting Framework is welcomed by ACCA (the Association of Chartered Certified Accountants), saying this represents a landmark opportunity to break down the silos in corporate reporting.

Helen Brand OBE, ACCA’s chief executive says: “Now is the time to put the Framework into practice. This presents a significant opportunity to refresh corporate reporting and to place investor’s needs central to the process.”

ACCA believes that IR brings a number of benefits because it offers a focus on the long term strategy and performance of a business. The Framework centres on the material information about an organisation’s governance, strategy, prospects and performance that reflect the commercial, social and environmental context within which the organisation operates.

Helen Brand adds: “A better understanding of long-term risks to commercial models can only be of benefit to business and to the investor community. Explaining how corporate value is created and sustained is important, and the IR Framework enables business to do this.

“Ultimately, I hope that IR will restore trust in business – reporting models have been criticised in the past, but now is the time for change. I am sure the accountancy profession is ready and willing to show the necessary leadership to make that change happen.”

ACCA and IR

  • Helen Brand, ACCA’s chief executive, is a member of the IIRC’s Council;
  • Neil Stevenson, ACCA’s executive director – brand, sits on the IIRC’s Working Group;
  • ACCA’s global network has been raising awareness of IR and supporting the IIRC’s outreach work for a number of years;
  • ACCA’s Annual Reports for 2011 / 12 and 2012 / 13 have been produced using the IR Framework, giving a concise, clear and comprehensive picture of how ACCA has created value by making its strategy happen.

Towards Integrated Reporting

accawebmaster —  14 September 2011 — 1 Comment

By Helen Brand, chief executive, ACCA

They run into the hundreds of pages, they take months to prepare, and they are required by law, but are corporate reports actually of any value to businesses and those that use them?

Well, yes, is the short answer, but there’s certainly a case to be made that they aren’t valuable enough.

The information contained within corporate reports is there in response to some kind of stakeholder demand, while the information also helps businesses assess their own performance, so there’s some value there.

However, in today’s corporate world, where we have so many inter-connected risks and opportunities, and so many different reports to tell us about them, something seems to be missing. What we don’t have to match the inter-connected corporate world, is an inter-connected corporate report.

If we look at just two types of corporate report – the Corporate and Social Responsibility (CSR) report, and the annual report and accounts – it’s clear why this matters.

Given the increasing pressure on natural resources and given our increasingly changeable climate, the natural world will have a significant impact on any business. However, most business’ mechanism for reporting on climate risks, the CSR report, is published as a stand-alone report. Some companies don’t even publish the CSR report and the financial statements, or the annual report, at the same time.

Presenting the information separately, in silos, makes it difficult to build up an overall picture of a business’ long-term value. Each report only takes one set of factors into account, meaning it could well have different conclusions to those that could have been made if the information in other reports was built into that report’s assumptions.

To take all the necessary factors into account when presenting information, to put the finances in the context of sustainability, long-term objectives, and the business model, needs a new approach to reporting. We need an integrated approach to reporting.

This is easier said than done, but this week has seen some significant steps towards the arrival of integrated reporting, with the launch of the International Integrated Reporting Committee (IIRC) discussion paper. The IIRC brings together all the key players needed to make such a complex and far-reaching project work, from global business, to investor groups, and accountancy bodies.

The IIRC has a long way to go before it can achieve even a small part of what it has set out to do: Integrated Reporting needs to result in reports that are of increased relevance to their users, and it needs to embed sustainability at the heart of corporate reporting.

Despite these challenges, Integrated Reporting remains a great opportunity to help us make a fully-informed assessment of the long-term value of any business.

Narrative reporting

accawebmaster —  27 September 2010 — 3 Comments

By Helen Brand, chief executive, ACCA

Read a company's annual report (here's a selection from McDonalds, AstraZeneca, Vodafone, and us as random examples) and you'll notice its front and back halves are almost entirely different documents; the back full of figures and accounts, the front narrative.

The back half presents the bald financial facts and figures, while the front half – the narrative report – is a business's opportunity to tell its own story in its own words, to provide extra non-financial information that will help stakeholders take decisions regarding the business.

At least this is what should happen. Yes, the financial statements spell out the financial facts, but there are growing problems with the usefulness of narrative reports: increasingly, voluminous and complex regulatory requirements are seeing the story of business performance drowned out by a mountain of detail.

We've been working with Deloitte to look at some of the problems experienced by report-preparers, and we've carried out a survey of some 230 chief financial officers and other preparers in listed companies in nine countries (Australia, China, Kenya, Malaysia, Singapore, Switzerland, the UAE, the UK, and the US).

The survey found:

  • meeting legal and regulatory requirements was the most popular driver (83%) for narrative disclosures. Shareholders' needs came marginally behind this (82%). When asked to identify audiences of high importance, regulators were picked by 67% of interviewees while shareholders were picked by 88%
  • 71% of respondents consider the top critical challenges in producing a narrative report to be the number of requirements placed on preparers, and the cost and time involved in preparing the report
  • the interviewees see the five most important disclosures for shareholders to be: explanation of financial results and financial position (identified as of high importance by 87%); identifying the most important risks and their management (67%); an outline of future plans and prospects (64%); a description of the business model (60%); and a description of Key Performance Indicators (KPIs) (58%)
  • in the aftermath of the global financial crisis, 78% of preparers consider that the discussion of risks and their management is of greater interest. (The failure of conventional reporting prior to the financial crisis to explain the risks inherent to business models of complex organisations is an area of concern for me)
  • looking at improving future narrative reporting, 65% of interviewees say that they would like a reporting environment with more discretion and less regulation, 58% cite the inclusion of external auditor opinion, 57% believe there should be more emphasis on forward-looking information and 51% ask for IASB guidance.

Narrative reports certainly throw plenty of information at us to satisfy both regulators and report users but this is risking turning reports into tree-obscuring woods. There needs to be more flexibility for preparers to tell their business's story in a way they think would be useful to stakeholders. Regulation should underpin this, not get in the way.

The IASB is due to issue guidance on narrative reporting at the end of October. Greater clarity and simplicity would be welcomed by CFOs – not least because they believe it would benefit the report-users they serve.

Update: The full ACCA/Deloitte report


by Helen Brand, chief executive, ACCA

While my last post was a look into the future, sometimes it can be just as important to look at where we've come from. With this in mind, I thought I'd take this opportunity to nudge you towards ACCA's annual review for the past year.

This will just be a quick overview; you can go into more detail in the review itself. We're also publishing a separate CSR report for the first time.

Over the past year, we've been working hard to make our organisation fit for the future, while at the same time supporting our members across the globe through tough economic conditions.

It's these tough conditions that have underlined the importance of finance professionals to businesses. As businesses have battled with cuts over the past 18-months and now look for new finance in the recovery, it is finance professionals and accountants that will be on hand to provide much needed advice.

From an organisational point of view, it's been a very positive year for ACCA. We continue to see sustainable growth in membership, reputation, and influence – all in line with our strategic objectives heading towards 2015.

Some of the highlights include:

  • our most recent surveys indicate 99% awareness of awareness of ACCA among employers; 48% of employers internationally now see us as the leading global professional accountancy body
  • we now have 57 strong global accountancy partnerships
  • ACCA now has 140,225 members
  • we have opened new offices in China and Bangladesh

On a personal note, I'd like to say thank you to ACCA's global team that has offered great support to our members, students and employers, and contributed so significantly to the development of the profession. Everyone has achieved a great deal in challenging times.

Looking forward again, over the next year we hope to ensure that ACCA continues to be focused on providing the best possible services for our customers to enable us to meet our strategic aim of being the leading global body by reputation, influence and size.

And lastly, a small piece of housekeeping: ACCA's Global Virtual Conference will be on Wednesday this week. There are some really interesting lectures and debates lined up, with some great speakers, including Mervyn King, the chairman of the Global Reporting Initiative. We have almost 5,000 people already registered for the day.