The public value of the accounting profession
In June, ACCA published a major new report called Professional accountants – the future.
Some two years in the making, the ACCA report is the result of conversations with nearly 2,000 respondents from around the world, including finance professionals based in Malaysia.
Taking a look ahead to 2020 and beyond, the report focuses on the skills, abilities and knowledge the profession needs now and in the future. What we found with this report is that the accountant’s role has been revolutionised over the past decade, with finance professionals becoming leaders, trusted expert counsel and key strategic advisers to organisations whether in the public or private sectors.
Our respondents painted a picture of a brave new world where there is more regulation, greater globalisation, ever increasing risk, and of course, massive technological advancement. And because of this, the accountancy profession has to be ahead of the curve on all fronts – its members trained to the highest of professional standards, looking beyond the numbers and with a global mindset.
With this change comes a requirement for a whole new set of skills. On top of technical and ethical excellence, professional accountants now require creativity, emotional intelligence and the vision to lead.
Central to the report is a unique model for measuring personal capabilities – called the seven quotients of success.
The bedrock of this quotients model is technical and ethical competencies, or what we call TEQ – by which we mean the skills and abilities to perform activities consistently to defined standards, and often based on a professional qualification.
For ACCA, these ‘magnificent seven’ strengths show the way ahead. They are the means by which accountants use their technical knowledge, skills and abilities blended with the interpersonal behaviours and qualities to put them to use.
Public value is about demonstrating professional ethics in the many practices and fields of accounting and finance – from audit to corporate reporting to tax.
Applying the TEQ to the practice of audit and assurance for instance means thinking and behaving with integrity, independence and professional scepticism. This is particularly important for stakeholders, including regulators, investors, colleagues, and entities that are the subject of audit and assurance engagements.
Demonstrable ethical behaviour is also about following the principles, procedures, guidelines and codes of professional conduct and ethics provided by a professional body like ACCA, but also the local regulator, and international standard setters.
With these quotients, we realise that everyone has their own strengths and weaknesses. The key is to recognise where you excel and where you need to work to build your competency through the continuous professional development which professional accountants already know so well.
Accountants’ skills and knowledge are much in demand. Because accounting is the language of business and finance, it is accountants’ skills and abilities that can and do instill trust.
However, proving value during a time of economic turbulence is a challenge for the profession. Over recent years, the profession has been under the spotlight for quality for audit and also financial reporting.
With transparency and corporate social responsibility increasingly in the news agenda, and with it also being questioned by many stakeholders and shareholders, it is clear that the profession is keen to prove its value.
So why does this public value matter? The basic answer is about trust. To lead and serve businesses of all sizes effectively, accountants need to have the trust of the public and business. Without trust, the work of accountants will have little credibility, and little integrity.
The technical and ethical quotient in our new report talks about the skills and abilities to perform activities consistently to a defined standard while maintaining the highest standards of integrity, independence and scepticism.
The way that individual accountants apply accounting, reporting and auditing standards has a powerful impact on the stability of financial markets. Their determination to meet high ethical standards in all aspects of their work is also vital for maintaining confidence and promoting public value.
Alongside individual professionals, accountancy bodies too have essential roles to play in the development and application of consistent global professional and ethical standards, in promoting good corporate governance, and supporting economic development through access to finance.
ACCA has long been a champion of public value. For ACCA, public value means three clear things – acting in the public interest; promoting ethical businesses and growing economies.
In 2012, we published a report called Closing the Value Gap, in which we warned that the profession must educate the public and its stakeholders of its value and take steps to rebuild trust in the industry. The need for this is to ensure the profession does not lose its considerable credibility or its relevance.
To be relevant, and to be credible, the profession needs to be well trained and skilled. These skills are a vital asset to business, to clients and more widely to economies.
Accountants are increasingly being called upon to be at the forefront of matters during these unsettling economic times. The profession’s ability to adapt and evolve to situations as they arise makes it dependable as a profession – that was also a clear message from our report Professional accountants – the future research.
Professionalism really matters. ACCA’s Qualification ensures that an ACCA qualified accountant is adept and well trained in all the skills and abilities that are needed by employers around the world. And what sets us apart is the professionalism and ethics module that all students have to take to pass the qualification to become members.
I end with a quote from the UNCTAD, the United Nations body responsible for dealing with development issues. This organisation held an event in Doha a few years ago about capacity building, where it said: “Accounting plays an essential role in economic development. High quality corporate reporting is key to improving transparency, facilitating the mobilisation of domestic and international investment, creating a sound investment environment and fostering investor confidence, thus promoting financial stability.”
The accountancy profession holds the global market place together. It helps with capacity-building initiatives in very practical and tangible ways, from professional bodies working with learning providers and employers to train the accountants the world needs, to providing clear, credible and consistent financial information that can help investors, governments and regulators make meaningful decisions about future strategies.
For ACCA, this is the real value and the tangible manifestation of public value.