By upgrading and diversifying their skill sets, accounting and finance professionals will be able to thrive in the volatile business environment and advance to strategic business partners in their organisations while capitalising on the fast-emerging information and communications technologies. This is the key message conveyed at the ACCA (the Association of Chartered Certified Accountants) Hong Kong's Annual Conference 2014 "Future of the Accounting Profession."
The conference's guest of honour, Au King-chi, JP, Permanent Secretary for Financial Services and the Treasury (Financial Services) of the Government of HKSAR, highlighted the key role played by the accounting and finance professionals and their contributions to the local economy.
"Here in Hong Kong, the financial services industry contributes to about 16 per cent of our GDP. The accounting sector is an indispensable part of this rapidly growing industry. Users of financial statements rely heavily on the work of accountants. From establishing a proper financial reporting system to setting up a sound internal control system in a company, accounting professionals provide a valuable service. We also depend on auditors to promote good corporate governance of companies by providing an independent view on the truthfulness and fairness of financial statements. This is important for shareholders and other stakeholders to get an informed view on the company's operation."
Au remarked that to be competent as accountants or in other capacities in the business and financial world, the profession needed to keep themselves abreast of new requirements. She also highlighted a few reform initiatives in the pipeline, including Requirements of the Basel Committee on Banking Supervision, the improvement of the Corporate Insolvency Law, the establishment of an effective resolution regime for finance institutions, and the reform of regulatory regime for listed entity auditors.
Keynote speaker and celebrated futurologist and trend-spotter Magnus Lindkvist believes we all should pay more attention to "slow changes", that when applied to current situation meant such developments as big data and tax regime changes. Rather than horizontal thinking and competing on attributes, corporations needed to focus on vertical changes and compete on big ideas.
"Over time, technologies can make something that once only belonged to the rich available to everyone, like 3D printing and mobile phones that change the way we do our business…the world is engaged in 'Digilogue' that anything and anyone anywhere are connected."
"In this continuous world, we need to 'unlearn' by discarding the baggage of old things," Lindkvist told the audience. He advised the participants to experiment within the regulatory boundaries, to "recycle failures", and to adopt long-term mindset and be patient.
Chiew Chun-wee, Head of Policy, Asia Pacific, ACCA, discussed how CFOs could diversify into business partnering and become transformational agents in their organisations. Chiew made use of the onsite online polling system and asked the audience if they agreed that computerisation would replace accountants/auditors in 20 years if they maintained a narrow bean-counting focus. Over 80 percent of those who cast their votes answered "yes". "CFOs need to move into strategic finance role and help businesses identify development directions. They should be chief business enablers that give strong governance while driving development and mitigating risks."
"As the business partners, CFOs should have in-depth knowledge of the business and the support of specialised professionals, including data scientists. CFOs could harness such opportunities as the availability of global business service and increased demand for sustainable business model to expand their scope of responsibilities," Chiew concluded.
Faye Chua, Head of Future Research, ACCA, outlined how businesses and in particular CFOs could capitalise on the new technological trends and consolidate their business partner role. Over 90 percent of the participants of her onsite poll agreed that digital services would benefit their daily work and 86 percent believed that tomorrow's finance function would be more challenging and complex that required higher-level skills. Among the key technology trends were SoMoClo (social media, mobile and cloud) cyber-security, big data and artificial intelligence. "The world becomes more fluid, we need to keep informed of new technologies, learn new analytical skills, develop new metrics, and create a new visual language of data art to communicate our understanding of the data," Chua pointed out.
Kelly Chan, Finance Director of Moet Hennessy Diageo Hong Kong, weighed in that amidst all the technological advancement, heightened expectations from all stakeholders and increased demand for corporate transparency, CFOs' increasingly important role as business partner necessitated the knowledge of all major information of an organisation. To proactively add value to all aspects of operation, CFOs and the team should learn about other departments and have empathy and excellent communication skills. "While we should stand firm on compliance issues, we also need to be pragmatic when considering if a company can implement changes and if the staff have the adequate knowledge to execute them," Chan added.
From a regulator's point of view, Brian Ho, Executive Director of Securities and Futures Commission, thought CFOs played an important role in helping identify insider information and enhance corporate governance. "CFOs can be our regulatory partner in ensuring compliance with the statutory disclosure regime and help ensure disclosure of insider information," Ho noted.
On the ways of future-proofing business and the role of the finance profession, Dr Toa Charm, Founder and Chairperson, BI and Big Data SIG, Hong Kong Computer Society, voiced the emergence of finer division of labour and specialisation among the team leaders in a corporation.
"There will be chief data officer and chief information officer, etc. A steering committee could be established to drive all chief officers to work towards common goals and take accountability," Dr Charm said. "A key to future success for traditional companies under the digital disruption would be the mastering of big data, social media and O2O ('offline to online' or 'online to offline') strategy. Corporations also needed to beef up their big data analytical capacity."
Roy Leung, FCCA, Partner, Capital Markets Group, KPMG Hong Kong, believed that in such a steering committee the finance professionals would contribute balanced views and CFOs would also offer crucial support in controlling risks.
Estella Ng elaborated on Leung's point by saying that CFOs' role complemented that of CEOs'. "CFOs' scope of responsibilities is wide. To do their jobs well, CFOs not only need to keep pace with new technological changes. They also should have wide-ranging knowledge of operation and effectively communicate their knowledge to the others...CFOs should be able to properly assess market volatility and capital market trends." Ng, FCCA, is the former CFO of Country Gardens Holdings Co Ltd.
Leung also noted that the new technological changes gave equal growth opportunities to SMEs. "Companies like Facebook have become a listed corporation relatively quickly. The most important elements are innovations and niche products."