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IFAC FOCUS AREAS
- Accountability. Now.
- Adoption of International Standards
- Developing the Global Profession
- Global Representation and Advocacy
- Professional Accountants in Business
- Small and Medium Practices
Independent Standard-Setting Boards
The International Auditing and Assurance Standards Board sets high-quality international standards for auditing, assurance, and quality control that strengthen public confidence in the global profession.
The International Accounting Education Standards Board establishes standards, in the area of professional accounting education, that prescribe technical competence and professional skills, values, ethics, and attitudes.
The International Ethics Standards Board for Accountants sets high-quality, internationally appropriate ethics standards for professional accountants, including auditor independence requirements.
The International Public Sector Accounting Standards Board develops standards, guidance, and resources for use by public sector entities around the world for preparation of general purpose financial statements.
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Finance Leadership & Development
What Do We Mean by Finance Leadership & Development?
Finance leadership and development involves ensuring that professional accountants in business—or finance professionals, as they are often called—respond to the continually changing expectations of their organizations, the financial markets, and society.
“Professional accountants in business” have diverse roles, and support their organizations in a wide range of job functions at various levels. These include:
- Leadership/management: chief executive officer (CEO); chief financial officer (CFO)/financial director (FD); chief operating officer; director of governance or operations; treasurer
- Operational: business unit controller; financial or performance analyst; cost accountant; resources manager; business support manager; systems analyst
- Management control: business assurance manager; risk manager; compliance manager; internal auditor
- Accounting and stakeholder communications: group controller; head of reporting; investor relations manager; financial or management accountant
Finance leadership and development includes:
- Finance and accounting (F&A) function design and effectiveness;
- Preparing for, and enhancing, finance leadership; and
- Finance professionalism and talent management.
Finance leadership is needed in all the various areas covered by F&A, including:
- Transactional and operational finance and accounting;
- Strategic and operational decision support;
- Governance, risk management, and internal control;
- Corporate finance, tax, and treasury; and
- Investor relations.
Why is Finance Leadership and Development Important?
Many accountants aspire to finance leadership roles, such as CFO, controller, or chief accounting officer. These roles are often responsible for all financial aspects of the organization, and require increasingly specialized knowledge and technical skills in areas such as financial reporting, tax, and treasury.
Organizations focus on finance leadership and development to ensure that F&A activities support the development and performance of the organization. To add value to their employers and maintain relevance and public trust, professional accountants must fulfill their traditional responsibilities—while increasing their support of strategic and operational decision making. These roles require leadership, strategy, business, management, and interpersonal skills.
Global Perspective on Finance Leadership and Development
The past several decades have witnessed significant growth in the demands on, and expectations of, finance leaders—particularly as they have become key to helping their organizations navigate an increasingly complex business world. Finance leaders are now expected to be business partners and to drive organizational performance, as well as strong and ethical, governance and management practices.
Many organizations have conducted F&A transformation programs to reorient their F&A functions to enhance their contributions and productivity. Organizations that have enhanced their F&A capability typically have demonstrated clear benefits in terms of improved organizational performance.
Developing finance leadership and professionalism extends to government and public sector organizations, where there is a need for enhanced finance leadership and public financial management to improve the quality of public service accountability and outcomes. The transparency, financial stability, and performance of governments and public sector organizations are closely linked with the quality and professionalization of the CFO and the F&A function.
At the same time, organizations have embraced leaner F&A functions, driven by shared services models, outsourcing, and the impact of technology. These changes have increased efficiency, but have also created potential challenges—such as balancing cost-reduction pressures with service delivery quality. They have also created challenges in managing talent, and in some cases have fragmented career pathways.
The Role of Accountants and the Accountancy Profession
In their various roles, professional accountants provide:
- Stewardship of financial and non-financial performance information. This information is necessary to fulfill compliance with financial reporting standards, risk and internal control requirements, and other regulatory, legal, and market requirements. Stewardship responsibilities have become ever more complex, particularly where they deal with different accounting, tax and treasury, regulatory, and legal environments across multiple jurisdictions.
- Business-partnering. Professional accountants focus on supporting strategy development and execution and facilitating sustainable value creation. Effective business partnering involves managing collaborative relationships and potential conflicts, and being a trusted and proactive partner in decision making.
- Aligning the F&A function with delivering the organization’s objectives requires an effective talent recruitment and management strategy to attract, develop, and retain finance talent and the skillsets required to support stewardship and business partnership responsibilities.
Key aspects and challenges of both stewardship and partnership roles include:
- Demonstrating ethical leadership and business integrity
- Balancing short-term concerns and pressures, such as managing cash, liquidity, and profitability, with long-term vision and sustainable organizational success
- Ensuring effective compliance and control and responding to ever-increasing regulatory developments, including financial reporting, capital requirements, and corporate responsibility
- Providing strategic leadership and ensuring the F&A function supports the business at a strategic and operational level
- Driving and managing change and innovation
- Engaging and communicating effectively with colleagues, investors, customers, suppliers, regulators, and other internal and external stakeholders
Professional accountants aspiring to become finance leaders need to move beyond carrying out only core F&A responsibilities. To effectively operate as a key member of a leadership and management team, they need a broader perspective and a wider set of capabilities and skills.
The accountancy profession has a critical role to play to ensure that professional accountants acquire and leverage the necessary technical knowledge and professional skills, and perform in finance leadership and broader F&A roles.
It facilitates education, life-long learning, and development of professional accountants, and helps them promote their competence and versatility to employing organizations. Professional accountancy organizations (PAOs) have a key role in ensuring that, in partnership with their members and students, professional accountants develop the right mixture of skills, experiences, and attitudes to succeed in finance leadership and F&A.
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- IFAC Names Rachel Grimes as President
November 23, 2016 - Accounting Today
- Can Global Capitalism Be Saved?
November 16, 2016 - Economia
- 9 Reasons Why Accountants Are Superheroes
November 8, 2016 - In the Black
- Competent and Versatile: How Professional Accountants in Business Drive Sustainable Success
August 1, 2011 - IFAC