The role of finance teams is expanding beyond the traditional areas of accounting and financial reporting, according to a new survey by the AICPA and the Chartered Institute of Management Accountants.
The survey of CEOs, CFOs and other senior level Chartered Global Management Accountants (CGMAs) showed that these finance teams are moving into areas that include IT development, cyber security, and strategic business planning. In addition to growth in the role of accounting and finance, the survey - conducted by the American Institute of CPAs - found that business complexity is a very significant factor and is expected to increase in coming years.
An overwhelming majority of CGMAs (93 percent) reported experiencing more complexity when asked to gauge the change in the level of business complexity over the last three years, given the U.S. and global economic and regulatory environment as reference points. Specifically, 30 percent reported experiencing significantly more complexity, 38 percent said they had seen a moderate increase in complexity, with 25 percent saying they’ve seen at least some increase. Less than one percent reported they had experienced less complexity.
Corporate executives don’t see things improving anytime soon. When asked to look ahead three years, 94 percent of CGMAs say that complexity in the business environment will increase further. Of those, almost three-in-four (72 percent) predict a moderate or significant increase in business complexity. On the other hand, only one-in-twenty (5 percent) predict no change in complexity, and less than one percent say they expect business complexity to decrease in the next three years.
“Increasing business complexity has become the new norm, and it’s not surprising that businesses are having to adapt and manage to the rapid change. As a result, organizations are calling upon management accountants to play a larger role than ever before,” said Arleen R. Thomas, CPA, CGMA, senior vice president of management accounting and global markets for the AICPA. “By utilizing a skill set that encompasses the strategic understanding to drive business and the financial understanding to mitigate risk and ensure compliance, CGMAs are uniquely positioned to help their organizations meet the challenges of a rapidly changing environment."
Indeed, organizations are looking to the CFO and the finance team to take on an expanded role. Some 85 percent of CGMAs said that the role of the CFO and finance function has expanded beyond traditional financial accounting and reporting. Those expanded responsibilities include:
- Strategic business planning (58 percent)
- IT development and cyber security (55 percent)
- Management and corporate governance (46 percent)
- Legal and compliance (44 percent)
- Human resources (40 percent)
Looking ahead, CGMAs identified strategic business planning (69 percent), as the top skill they expected to be essential to perform their role in the next 1-3 years. Other skills identified as being essential to perform their roles in the future are change management (41 percent) and communications (38 percent).
The AICPA and Chartered Institute of Management Accountants recently launched a Competency Framework to help management accountants assess their current competency level and provide insight on steps they can take to expand their skills while meeting their commitment to lifelong learning. It is publicly available to any finance professional, employer or educator to benchmark their team’s capability, create job profiles or design curriculum.