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BAHUMUKHA PARINATI

CA-THE MULTIFACETED PROFESSIONAL ACCOUNTANT IN BUSINESS

CA.Ramachandran Mahadevan.FCA

A Consultation Paper published by International Federation of Accountants (IFAC)in

September 2010 echoes the Bahumkha Parinati CA-The Multifaceted Professional

Theme of the year of KSCAA and has been aptly titled

Competent and Versatile as professional accountants in business(PAIB) drive

Sustainable organizational success.

Consultation PaperIt examines the expectations placed on professional accountants in business (sometimes known

as management accountants or finance professionals). They create, enable, preserve, and reportsustainable value for their employing organizations in a rapidly changing economic andcompetitive environment.

Worldwide, more than one million professional accountants work to support organizations incommerce, industry, financial services, the public sector, education, and the not-for-profit sectorin making them more successful and sustainable. They are a very diverse constituency, and canbe found working as employees, consultants, and self-employed owner-managers or advisers in

commerce, industry, financial services, the public sector, education, and the not-for-profit sector.Within organizations, many professional accountants are business leaders in a position of strategic or functional leadership, or are otherwise well placed to partner with colleagues in otherdisciplines to create long-term sustainable value for their organizations. Business leaderstypically perform in director and management roles, while strategic business partners support andparticipate in decision making and direction at various levels of the organization.

Professional accountant rolesThey have been broadly categorized as creators, enablers, preservers, and reporters of sustainablevalue for their organizations in two key dimensions:

A Performance DimensionAs creators of value in organizations, by (a) taking leadership roles in governance, strategy, andperformance management, and (b) overseeing the allocation of resources to ensure long-termsustainable value creation. Examples of job roles within which value creation is a key activityinclude chief executive officer (CEO), chief financial officer (CFO)/financial director (FD),treasurer, or other executive director role.As enablers of value in organizations, by influencing and supporting those who make decisions,and challenging assumptions and conventional thinking. Examples of job roles within whichenabling value creation by others is a key activity include business unit controller; business,financial, or performance analyst; management accountant; and cost accountant. In other words,these are professional accountants who will typically assist and guide managerial and operationaldecision making and implementation of strategy as business partners.

A Conformance DimensionAs preservers of value in organizations, by identifying, prioritizing, managing, and controllingstrategic and operational opportunities and risks. Examples of job roles primarily dedicated to the

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preservation of value include director of governance or operations, risk, and business assurancemanager, financial risk manager, compliance manager, and internal auditor.As reporters of value in organizations, by (a) measuring performance, capturing financialtransactions and non-financial measures of performance, and (b) preparing high-quality businessand financial reporting to stakeholders, including investors, customers, employees, regulators,

and suppliers. Examples of job roles within which reporting on value is a key activity includegroup controller, head of reporting, investor relations manager, and financial or managementaccountant.

Balancing Conformance and Performance ResponsibilitiesConformance responsibilities include providing assurances to senior management and boards asto whether:

Strategic, operational, and financial risks are effectively identified, prioritized, managed andcontrolled, mitigated, and reported

The organization is working effectively and efficiently in achieving its strategic and operationalgoals and objectives

The systems generating financial and non-financial information are working within prescribedstandards of accuracy and reliability, and such information reflects the true sustainableperformance of the organization

Managements fiduciary responsibilities, such as external financial reporting, fraud risk management, and adherence to governance codes are being carried out

Performance responsibilities focus on strategy, value creation, and sustainable resourceutilization, and include:

Helping organizations make sustainable strategic decisions, implementing appropriate strategies,and evaluating their ongoing relevance and success

Understanding the organizations appetite for risk and its key drivers of sustainable performance

Identifying critical points at which the organization needs to make decisions, and supportingthese with relevant insight and analysis

Allocating resources efficiently and effectively to achieve strategic goals and objectives

Drivers of Sustainable OrganizationsClarifying and promoting the roles, activities, and professional skills of professional accountantsin business needs to be done (a) within the wider context of understanding the attributes of high-performing sustainable organizations, and (b) with an appreciation of the emerging trends anddevelopments in the business environment.The eight drivers of sustainable organizations provide the framework for understanding how theglobal accountancy profession needs to support the development of professional accountants inbusiness so that they can help organizations achieve sustainable value creation.The drivers are:

Customer and Stakeholder Focus

Effective Leadership and StrategyIntegrated Governance, Risk and Control

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Innovation and AdaptabilityFinancial ManagementPeople and Talent ManagementStrategy ExecutionEffective and Transparent Communication.

These drivers represent what organizations need to do to achieve and sustain high performanceand success. They are core elements of every organization striving to be truly sustainable over thelong term. The drivers were defined in light of an analysis of three megatrends: globalization ,complexity, and technology .

The multiple face of a professional accountants in business are the 4Vs-Value Creators,Value Enablers,Value Preserversand Value Reporters.A competency framework has been structured using the eight drivers of sustainable organizations,andthe CA professional accountant in business is shown as multifaceted like a diamond.

(Full consultation paper-37 pages can be downloaded from -ifac.orghttp://www.ifac.org/Guidance/EXD-Outstanding.php

Consultation Papers

Competent and Versatile How Professional Accountants in Business Drive Sustainable Organizational Success Comments can be submitted by: Nov. 30, 2010