Tuesday, November 30, 2010

The Framework for managing audit quality sustainability

At the Institute we recognise that for audit practitioners in 2010 there are considerable challenges to ensure audit quality is not only maintained, but also improved. We are committed to helping our members to meet these challenges through continued education and training and sharing of peer experiences. All of this helps to contribute to continued high audit standards.

We recognise that it is essential that Australia maintains a healthy and focused audit community.

As part of our commitment to members, I am pleased to present to you a practical working tool for members practicing audit entitled Framework for managing audit quality sustainability.

The framework is a follow-up to our 2009 publication entitled Guide to audit quality – benefit of audit and defines the key components needed to manage a sustainable audit process.

The framework is a first as it is designed to be used by practitioners in large or small practices and publicly defines the components needed to manage a sustainable audit process in a ‘clear, precise and consistent manner.’

I trust that you will find the Framework for managing audit quality sustainability useful in your next audit and look forward to receiving your feedback.

If you have any questions or feedback regarding the framework, please contact me on 02 9290 5598 or alternatively at lee.white@charteredaccountants.com.au.

Friday, November 5, 2010

The changing role of the CFO

It seems to me that our profession continues to evolve at a fairly rapid rate.

One role that’s changed dramatically over the years is that of the CFO. Once, the CFO was someone who primarily focused on the financial position of an organisation.

Today’s CFO, I’m delighted to say, is a dynamic member of the management team. Part visionary, part strategist. And only part accountant, in a conventional sense.

There’s no doubt the broader role a good CFO does play in today’s organisations. As money and financial instruments become more and more complex, effecting the wellbeing of the business, so too has an understanding of the numbers. It’s not surprising that the accounting professional is being invited to share their leadership, vision, and general management skills.

Of course, with increased responsibility comes increased risk. While the average CFO salary is 30-60% higher than controller salaries, according to Robert Hall International, their longevity in the role can be short-lived. According to a report in Fortune Magazine in 2009, almost 25% of CFO positions in the Fortune 1000 changed over in one 12 month period. For small businesses, the position turns over every 2-3 years.

So, today’s CFOs must be well prepared. There’s no time to settle in or learn on the job - they really do have to hit the ground running.

As well as a solid understanding of the accounting principles, strong technical and operational skills, a CFO must demonstrate leadership skills and a passion for the business. In fact, what makes a really good CFO may not even be in the job description.

It really is fascinating to see how the role has developed over the years. I must say, I’m looking forward to chairing a lunch in a few weeks time, where several CFOs will be asked to share their success stories. What were their journeys to the top? What challenges face them today? Where else do they think the role of a CFO will go in the future?

I’d be interested to hear from other CFOs, or budding CFOs, on the challenges facing them. Is the broader role and recognition worth it for the likelihood of a short stay at the top? Add your comments, and let me know.

I’ve no doubt that the role of the CFO will continue to change. As they say, ‘watch this space’!