In order to critically evaluate the changes expected to take place in the roles and skills set of the CFO and the management accountant, it needs to be made clear what these roles are and the skills they currently require. Alongside this, drivers of change will be identified in order to understand why the roles and skills are changing, and most importantly, how. A management accountant is likely to step into the role of a CFO in future, which is why the roles and skills are linked throughout.
ACCA (2018) believe the CFO is critical to the success of an organisation and demands an in-depth understanding of accounting and finance regarding the underpinning of business strategy and operations. Norris (2017) identified three main components of this role; controllership duties, treasury duties and economic strategy and forecasting.
Management accountants, as specified by ACCA (2018), provide a range of financial analysis services to organisations. They prepare financial statements for managers to assist with their strategic decisions. This point ties in with how a CFO is critical to the success of an organisations, as the information they produce is used in strategic decision making.
Many people have the interpretation that accountants are number crunchers. They prepare financial statements, analyse figures, create budgets and make decisions based on financial information. Their role is important within a business, however, their roles are changing and becoming more strategic. This means their role isnt as financially focused and is becoming increasingly involved in non-financial roles, such as risk management. Sulaiman et al. (2008) found it wasnt until the late 1980s when professional and academic literature started analysing the changes in the role.
How the roles are changing
Kosur (2015) stated that CFOs will need to turn their focus towards analytics, people management and disruptive technology, reinforcing the point that their role is becoming more strategic.
Sulaiman et al. (2008) found there had been calls for accountants to focus more on the users of their information, instead of working in a centralised accounting function, implying that accountants should be working closely with users of their information, such as managers, who may not understand what it means, in order for them to get a better understanding of it. They also asked CIMA members to rank the importance of various roles, alongside ranking how these roles may change in future. Business performance evaluation remained top, both current and future, however strategic planning/decision was foreseen to become a more important role in future, ranked second. Implementing business strategy was ranked high for future importance. Financial roles were ranked lower for future importance, with accounts moving out of the ranks and cost/financial control slipping down to the middle, instead of being near the top. The study emphasised how the roles are becoming increasingly non-financial. Overall it was concluded that the role of accountants in general was becoming more outward-looking and creatively constructive.
Miller (2018) from ACCA found that technical and interpersonal skills were extremely important, alongside having a sound understanding of budgeting, analysis, compliance, risk management and other accounting principles. Alongside this, ACCA (2018) identified sustainable management accounting, leadership and management, strategy and innovation and ethics and professionalism as competencies required to be an accountant. These would be the basic skills required, however, the role is changing, and more important skills are required.
How the skills changing are
The skills required are constantly changing, with more emphasis being put on inter-personal skills, allowing the roles to have the ability to motivate and influence staff at all levels.
Kosur (2015) identified future skills required in order to be successful. Being analytical was noted as being extremely important, as this helps the business as a whole. Risk management is more important than ever as there are a lot more risks to manage than there was 20 years ago. Other important future skills identified were; the ability to adapt to new technology, managing people, ability to make decisions in a politically charged atmosphere, ability to manage big data and understanding business drivers and non-financial information.
Sulaiman et al. (2008) got CIMA members to rank skills, past and future. Broad business knowledge, decision-making and leadership all move up the ranks for future importance, with analytical/interpretive remaining top. A new skill that appeared in future ranks was managing change, whereas professional/ethical moved down to the bottom. The environment is changing rapidly therefore having the ability to manage change is extremely important, especially with Brexit looming.
Drivers of Change and Their Impact
The roles and skills set of accountants are undergoing changes, due to drivers of change. Krell (2011) identified economic, environmental and geopolitical volatility as one. This means leadership and risk management would be incorporated into the role of a management accountant, as they would already have a sound understanding of the economy and potential threats to their company.
Another driver identified is technological advancements and breakthroughs, requiring management accountants to keep up with the fast-paced industry that is IT, alongside being innovative. Most careers involve some form of IT therefore it is vital for accountants to have adequate skills in this area, otherwise they wont be able to keep up with technological advancements. Technology and software has increased the amount of information available to accountants, a sound understanding is required in order to make informed decisions. IT is the main reason changes are occurring much quicker.
ACCA (2016) identified regulation and governance, digital technologies, expectations on professional accountants to look beyond the numbers and globalisation as the main drivers that will impact on the accountancy profession. Alongside these drivers, ACCA identified the development of intelligent automated accounting systems and the adoption of cloud computing to have an impact on the accounting role.
What changes will these drivers bring? Digital technologies have influenced the Making Tax Digital transition. Businesses with a taxable turnover above the threshold will have to submit their returns online via software, making it easier for accountants to request information.
ACCAs report identified that auditors expect IT knowledge to become more important over the next decade, alongside communication, as they believe there is a lack of these skills in that area. This deficiency may be due to a lack of knowledge in terms of their business and the environment in which it operates.
It is my personal opinion based on research that the majority of roles will remain the same, it is merely the importance of these roles that is changing. The same goes for skills, accountants will still be required to have the same skills that were required 20 years ago, however, there will be emphasis placed on more modern skills such as IT, in order to keep up with the ever-changing environment.