Internal controls, big data and the skills gap top the list of trends that will impact CFOs in 2014. Though internal controls have long been in a finance chief’s job description, the focus on technology and human capital shows just how diverse the CFO’s job is becoming.
Here a few tips on how CFOs can stay ahead of the curve in 2014 and help their companies tackle the mega challenges that lie ahead.
1) Harnessing Big Data
According to the IMA/ACCA report “Digital Darwinism: thriving in the face of technology change,” advances in technology will demand new skills and competencies from CFOs and their staff. Of the U.S. respondents in the report, 62 percent said big data would be influential, 72 percent responded that tools will be needed to support data modeling and analysis, and 77 percent claimed they will need knowledge of data extraction tools to aid business intelligence.
It’s obvious that big data will pose challenges, but according to Carlos Passi, assistant controller of IBM, it also creates opportunities for CFOs and their team. “The integration of big data brings new inputs and variables that help anticipate the future, enabling rolling views of leading indicators versus more traditional retrospective views,” he said. “More frequent inputs allow the enterprise to respond more quickly to change.”
2) Closing the Skills Gap
According to the U.S. Bureau of Labor Statistics, “employment of accountants and auditors is projected to grow 13 percent from 2012 to 2022.” However, as I previously reported, “Accounting & Finance” positions were listed as one of the top ten hardest jobs to fill in a 2013 Manpower study.
There is a competency crisis in the accounting field—companies need accountants that can also be business strategists, but misaligned university curricula doesn’t prepare them adequately. The blame is not on academia. CFOs and HR executives must discuss with universities and professors how their needs are changing so critical updates to the curriculum can be made.
What can CFOs do in the interim to find qualified employees? United States Steel Corporation CFO David B. Burritt told me, “Certification is an excellent screening tool. I’d say everyone who takes the [CMA] exam benefits from the experience and is a better employee because of it.”
Ben Mulling, who became a CFO at the age of 28, discussed how companies should invite students in for a tour so they can get a better idea of what’s required in an accounting role. “Most students have no idea that, as a management accountant for a manufacturing company, they need to work with IT, engineering, production and operations,” he said. “It’s not even about technical accounting skills. The link between accounting and IT is especially critical and accountants need to learn how to work with that department in order to access important information for making business decisions.”
3) Updating Internal Controls
As reported by The Wall Street Journal, the current internal controls framework used by most companies, known as COSO, will be considered outdated on December 15, 2014. At the same time, auditors are expected to become tougher.
To break down this complex issue, I spoke with J. Stephen McNally, CPA, chair of IMA’s COSO Advisory Panel and finance director and controller for Campbell Soup, as well as Xavier University Professor Dr. Sandy Richtermeyer, CMA, CPA, and IMA’s representative on the COSO board. Here are the cliff notes:
- Financial reporting objectives are expanded in the new framework to include both internal financial reporting and external financial reporting
- The first step in implementation is to get your compliance team on board and then build awareness throughout the rest of your
organization—especially among key stakeholders, such as the board of directors, senior management and process and control owners
The framework’s Executive Summary is available free to the public on COSO’s website at www.coso.org. For more on COSO, you can also read my past articles, “A Campbell Soup Ingredient For Financial Reporting Success” and “What CFOs Need To Know About COSO.”
For more on this general topic, read my blog post, “Why CFOs Must Tackle Technology in the New Year.” What other trends will impact CFOs in 2014?
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