ACCOUNTING FOR A BETTER WORLD, ACCORDING TO ACCA CHIEF EXECUTIVE HELEN BRAND

The UK-based global professional accounting body ACCA, the Association of Chartered Certified Accountants, is on a mission to make a difference. Under its Accounting for a Better World initiative, ACCA is leading the way and demonstrating how professional bodies can meaningfully contribute to building a better, fairer world for everyone by championing ethics, inclusion, and sustainability.

ACCA believes that professional accountants, guided by ethics, integrity, and transparency, possess deep insights into how businesses work across industries and borders. As such, accounting professionals find themselves uniquely positioned to influence how businesses and other organisations make meaningful decisions anchored on core values, leading to positive outcomes that shape a path towards a sustainable and equitable future for all. ACCA global chief executive Helen Brand OBE, who recently visited Sri Lanka, an important market for ACCA, explains how.

How does ACCA’s global initiative, Accounting for a Better World, relate to the challenges confronting accountants?

Since its founding in 1904, ACCA has been a purpose-driven organisation. We’re a force for the public good, leading the global accountancy profession by providing opportunities and making a difference. As we find ourselves in a world of economic challenges exacerbated by geo-political conflicts, the aftermath of the Covid-19 pandemic, inflation and, of course, very importantly, the threat to our climate, we want to think of how ACCA can apply that purpose to the multiple challenges confronting the world.

And how do we ensure that ACCA, and more importantly, its members and future members, remain relevant in this incredibly challenging environment? So, Accounting for a Better World is a clarion call that we can all rally around in applying that purpose to finding solutions to the issues we all face.

Globally sustainability has become a big talking point. Can you talk to us about sustainability and how it relates to ACCA and the accounting profession?

Professional accountants provide strategic and financial advice to make businesses work in the interests of the organisations they serve and the economies and societies where they live and work.

When we look at the issue of sustainability, how can we measure progress in tackling those challenges? We know the climate is changing, and we know that businesses impact the natural capital of the world. So how can we demonstrate with trust and confidence to businesses and other organisations, and to the public, that we are tackling those issues in our roles as finance professionals? Within businesses and organisations, collecting relevant data and information and demonstrating progress is very much the role of professional accountants in the finance function. They also play a key role in reporting on sustainability and progress externally. In addition, some professional accountants work in the audit and assurance sector applying an independent, external lens to that reporting. In these various ways, the accountancy profession plays a very central role in ensuring that businesses are relevant for the future and helping to shape a sustainable future.

ACCA believes that professional accountants, guided by ethics, integrity, and transparency, possess deep insights into how businesses work across industries and borders”

How relevant is ethical conduct to the accounting profession?

Trust and confidence are crucial to ensuring that businesses can continue to operate. Reputational risk is an increasingly high-priority risk confronting a business organisation, requiring close attention and sound management. And to manage that risk, you have to ensure that you have the trust and confidence of your stakeholders and the public. And what generates that confidence? Uncompromising ethical conduct and an understanding of ethics. The application of ethics has been at the core of professional qualifications like ACCA since its inception, and championing ethical conduct is among its core objectives.

We require all our members and future members to have that ethical core and to demonstrate that throughout their careers, and we hold people to account who do not comply with our code of conduct and ethics. For all people, particularly the Gen-Zs entering the workforce at the moment, understanding that they are entering a profession with purpose, with ethics at its core, is massively important.

How can ACCA help businesses improve inclusion? They want to increase inclusion because stakeholders demand it. In what ways is this relevant to the accounting profession?

Inclusivity is highly relevant. ACCA has three values: integrity, innovation, and inclusion. And we exist as a professional body to provide opportunities to everybody so that access to the profession isn’t restricted to those from affluent backgrounds.

One of the founding objectives of ACCA as a professional body was about opening up the profession to people of ability with enthusiasm and drive to qualify as professional accountants, aiming to ensure that nobody was deprived of opportunities just because they came from a different background, ethnicity, or weren’t of the right social standing. ACCA will help you achieve your goals if you have ambition and passion.

I believe we can experience the power of transforming lives and making a difference in the world by unleashing opportunities for individuals, their families and society. The purpose of ACCA is to open opportunities for you to make the best life for you and those around you. ACCA provides many different pathways, and it does not matter if you are a school leaver, passed out from high school, have a degree, or have any other professional qualification. There are many different routes and pathways. We have placed a lot of emphasis on that.

We all know that inclusion has a business benefit because the diversity of thought around the table – at the board level or around your team in the service centre – creates better solutions and keeps you closer to your customers. On gender and other diversity issues, ACCA works extremely hard to foster inclusion and make a meaningful impact. We have committed to the UN SDGs relating to gender equality, contributing to impactful changes we all want to see by including everybody.

Businesses prefer to employ ACCA professionals because they have the agility to deal with challenges by applying their skills, mindset and technical aptitude to derive solutions”

What are your thoughts on stakeholder capitalism vs shareholder capitalism?

Investors and shareholders and the fundamental mechanisms of capitalism are not going away. They remain important. However, what investors are now increasingly demanding from businesses goes much broader than the return on shareholder capital. We are now seeing that access to capital will be dependent not just on future returns but on how a business can respond to stakeholder demands around ethical conduct, diversity and inclusion, and sustainability.

How does ACCA prepare its members to deal with uncertainty?

There is so much change and challenge in the world. We try to instil an agile mindset in our members that enables them to deal with these situations – and I hear this from employers in Sri Lanka and around the world. Businesses prefer to employ ACCA professionals because they have the agility to deal with challenges by applying their skills, mindset and technical aptitude to derive solutions.

Building on the foundations of finance

Nine of ACCA Sri Lanka’s approved employers and key partners joined a discussion about the future of finance in Sri Lanka

Coinciding with the visit of ACCA global Chief Executive Helen Brand OBE, to Sri Lanka, the accounting body’s Sri Lanka office organised a round table discussion featuring nine approved employers and key partners. Here are some of the thoughts that were expressed.

MATCHING THE INVESTMENT ANALYSIS TEAMS TO CLIENT NEEDS

“Our product is, providing clients with a deeper understanding of the investment risks faced in their portfolios and how they might navigate these to generate alpha,” she said. “As a result, we seek technical skills, good attention to detail, soft skills and an understanding of what makes businesses succeed or fail, in the individuals we hire. “We do appreciate”, she added, that ‘not every potential hire, knows everything”.

“At the point of hiring, we seek the raw intellect and an ability to be agile and demonstrated resilience. From that perspective, the leadership assigns great importance to hiring individuals from professional bodies like ACCA which has a competency framework, and their technical skills often match our product needs exceptionally well,” she says.

THE TALENT POOL IS OUR GREATEST COMPETITIVE ADVANTAGE

Sri Lanka’s knowledge process outsourcing industry generates over 500 million dollars in export revenue annually, has created 25,000 new jobs in the last three years and consists of over 100 organisations.

“Twenty years ago, when the first KPOs’ were established here, our competitive advantage was cost arbitrage driven,” he says. “Since then it’s evolved”, he added, “to operational excellence with efficiencies and quality which is now at the heart of our offering.”

Shanaka Fernando believes the KPO industry will grow in significance and cement its place as a strategic industry benefiting the economy. “The talent pool is our greatest competitive advantage. Our cost is very competitive compared to other countries. Our employees are young, energetic and skilled. Around 70% of the industry revenue is generated from finance and accounting-related services,” he adds.

WITHOUT GOOD GOVERNANCE TRUST AND CONFIDENCE ARE QUICKLY LOST

The focus at the institute is boardroom governance and how directors can bring value to organisations and all their stakeholders. There’s plenty of evidence of the lower cost of capital and greater shareholder and stakeholder value creation when boards are more engaged and add value.

Radika Obeyesekere, says the business risk landscape in the face of the pandemic, the global economic conditions and Sri Lanka’s own challenges with its foreign currency sovereign debt is challenging boards. She adds that the “constant demand we’ve seen for directors with a sound financial background, is more pronounced now.”

Recruiters of board directors have for some time now been looking for candidates that are able to better fulfil organizational needs that lead to trust and confidence over the long term. Strategic financial skills rank will now figure even more prominently in those conversations.

THE COMMON GROUND STARTS WITH THE ALIGNMENT OF VALUES

At MAS Holdings, internationalization has always been a key priority. In our recruitment, we seek finance professionals who are comfortable looking beyond the traditional application of accounting, and able to be finance business partners for functions, teams and units in the company. As an organisation, we believe it’s not just about a cost unlock, but it’s about creating value. So, the rhetoric is always, how do we unlock value?”

Sajindu Perera adds that MAS Holdings “is an organisation driven by values. ACCA too has always had ethics as a foundational value. So that’s something that complements our organization, and something that we truly value in the ACCA members and affiliates we often employ.

THE PERSONAL ATTRIBUTES THAT MATTER IN PROFESSIONAL SERVICES

Every consulting opportunity, every question we ask and every interaction with a client or colleague should make the working world better than it was before. The purpose behind EY’s slogan, “Building a Better Working World.” At the global accounting firm EY, there are two attributes that are frequently emphasised: personal ethics and excellence in whatever you do, Roshini Fernando points out.

“We work with a lot of information, and all of it is confidential, and we have a significant responsibility towards clients and society about our actions. For our team, we emphasise the importance of ethical behaviour and professional ethics on a personal and corporate level. The second attribute we underscore is excellence in whatever we do”. She adds, “we work with a multitude of companies and the expectations are very high, so excellence is something that we drive in terms of attributes.”

The insights and quality of service we deliver help build trust and confidence in economies around the world. Our challenge, therefore, is always to asses if the candidates we expect to recruit have these attributes in order to develop outstanding leaders and teams that create long-term value for all stakeholders.

VIRTUAL MOBILITY OF THE FINANCE WORKFORCE

Finance speaks a common language with mostly harmonized standards and common fundamental principles, and English is used as the language of finance around the world.

Priyan Edirisinghe says, Baker Tilly in Sri Lanka now provides their expertise to the network in foreign markets and has been engaged in virtual assignments alongside other member firms. He adds, “as long as students and professional members alike keep up with current developments in the profession and technology in finance, then, I think, there’s plenty of mobility in the profession. Finance now is a global profession.”

For this service delivery, ACCA students and members are particularly well suited because the medium of instruction is English from the beginning of the qualification. We’ve found that the students have a good set of skills and ACCA provides ample resources to make them globally mobile. They are well suited not just for physical mobility of careers, but for virtual mobility too.

THE IMPORTANCE OF PUBLIC TRUST

Financial institutions are highly regulated. After the pandemic and Sri Lanka’s announced restructuring of its foreign currency commercial debt, the environment for financial institutions has become even more complex. Regulators who used to issue regulations frequently are doing so now at a much faster pace to address the fast-changing environment with unprecedented uncertainties to restore stability. In this environment, the importance of public trust matters even more.

Ranjani Joseph highlights that the environment is similarly challenging for professional firms too. To provide services they too must transform their approaches and focus to match clients’ demands and expectations and be up to date with challenges posed by the regulatory and business environment. “To retain the public trust we too must be future-focused, assessing potential implications of various economic indicators; what that means to business and how we can report better with transparency to the wider stakeholders,” she says.

WHY MOST CEOS HAVE FINANCE BACKGROUNDS

‘Today, the finance professionals in our team, are not just transaction processing and record keeping; they are helping our customers’ finance transformation, elevating their finance function to world-class standards,” he said.

“You need to be able to tell the story behind the numbers, provide predictive analysis and scenario analysis of the future and be the primary adviser to the CEO and the board. You need to be able to articulate it well”. These skills, he added, are why “many CEOs today are selected from amongst the finance community, because of the wellrounded and holistic skills and knowledge the modern finance professional possesses”

A SHARED FOUNDATION AROUND ETHICS

For investment professionals accounting is often a starting point in their education and training.

The CFA qualification is focused on investment management and portfolio management, and at its core is a strong emphasis on ethics. In that sense, the CFA Institute and ACCA have a similarly strong and shared foundation. CFA is considered a post-graduate level qualification and here in Sri Lanka, you need an undergraduate degree or a similar professional qualification to enter CFA.

Aruna Alwis also commented on another challenge facing Sri Lanka. “Brain drain has accelerated in Sri Lanka. In our meetings with top CFA graduate employers, one of the points that were highlighted is that a number of global companies established in Sri Lanka, recruit accounting and investment professionals here. You no longer need to go overseas now to work for these firms. Professionals can work here, and still work for a global company.” He added, “this deserves highlighting