Corporate reporting is a vital area of activity for professional accountants,and one that continues to evolve.Encompassing both financial and non-financial information,and both statutory and voluntary disclosures,drivers of change in corporate reporting will shape the key skills and competencies required of professional accountants working in this field.
Responding to change
Business and investment activity is becoming increasingly global,with large corporates becoming increasingly powerful.At the same time,internet-enabled stakeholder activists are having more impact.Such factors have contributed to a loss of trust in corporate structures,behaviors and information since the
financial crisis.This has resulted in more regulation and more frequent corporate disclosures.
At the same time businesses and other stakeholders are becoming increasingly aware of the insights that can be gained from non-financial reporting,particularly the more complete picture that can be created of a business.Sustainability reporting is becoming more widespread,expected to become mandatory across the world.For example,Singapore plans to require listed companies to report on sustainability by 2020.Investors are already showing a strong appetite for integrated reporting(IR),which highlights the linkage between factors such as business strategy,risk,remuneration,the economy,the environment,society,business,past company performance and current decisions.Based on ACCA’s workshops,accountants in Africa and Asia expect IR to emerge as the new norm by 2020,while Europeans anticipate this by 2020-25.Developments in digital technology are also driving change in corporate reporting.For example,technology enables far greater analysis of data(including big data).It is allowing new ways of reporting–for example,using video–and supporting the production of faster reporting.Social media is also increasingly being used for company disclosures.The Securities and Exchange Commission,for example,already allows companies to use social media outlets such as Facebook and Twitter to announce key information as long as investors have been notified.
Planning for action
Although non-financial reporting will become more important,financial reporting will continue to form the core of corporate reporting.Strong technical skills and an ethical mindset will therefore remain vital competencies required of professional
accountants working in this field.Participants in ACCA’s global workshops,which underpin ACCA’s report Professional accountants–the future,expect some areas to become more challenging technically and ethically,particularly financial instruments,lease accounting,provisioning,segment reporting and related-party transactions.Tax reporting is also expected to pose new technical challenges.Future accountants will need to stay up to date with developments in the international financial reporting framework,monitoring emerging trends in accounting standards(including valuation models)and regulation.
Based on opinions shared during the workshops,the 10 competencies and skills considered to be most important to professional accountants working in the corporate reporting arena have been identified(see below).Topping the list is the ability to communicate a holistic view of corporate reporting,presenting the big picture story of an organization’s performance and progress,rather than focusing on detailed numbers.This will require professional accountants to become skilled in aligning non-financial information with current financial reporting requirements and to be able to explore the merits of integrated reporting.However,holistic corporate reporting is also the area where some professional accountants feel their skills are most lacking.For example,professionals are likely to need greater understanding of how to measure and account for assets and issues such as knowledge capital,data and sustainability.
Professional accountants involved in corporate reporting will also need to be able to manage relationships with multiple stakeholder groups.In doing so they will be helping users of financial statements understand and interpret reported information,go beyond the numbers,and so support effective decision-making.Analytic skills,such as the ability to evaluate performance indicators to support business decisions,will also be vital.So will critical thinking–for example,to evaluate accounting principles and practices used in corporate reporting.Globalization will also have an impact,emphasizing the need for skills and competencies associated with accounting for the acquisition,disposal and consolidation of foreign operations.
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