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Accounting Profession Not Just About Closing Books and Issuing Reports, Chief Accountants Say

Denise Lugo  Editor, Accounting and Compliance Alert

· 6 minute read

Denise Lugo  Editor, Accounting and Compliance Alert

· 6 minute read

The accounting profession is not just about closing books and producing annual and quarterly reports but about bringing value to a business on a whole, chief accountants from some of the nation’s largest public companies told a conference on December 4, 2023.

“This is a technical audience and we kind of thrive on SEC Regs, codification, future projects and that’s certainly important – I’m not here to diminish that but I look at my team and I think about my team in a pie chart, it’s a small fraction of what they spend their time on,” Matt Janzaruk, senior vice president, chief accounting officer at Procter & Gamble Co., said during a panel discussion at the AICPA & CIMA Conference on Current SEC and PCAOB Developments. “What they’re spending time on is supporting our operations.”

Controllers, for example, are taking the lead in environmental, social and governance (ESG) related issues, according to the discussions.

“Now we’re operating as one cohesive team,” Melissa Burgum, chief accounting officer and corporate controller at Accenture plc, said. “We’ve built some really strong governance, which is key to anyone doing ESG reporting because the data is coming from so many different sources, and that’s the challenging thing and also the exciting thing about it too,” she said. “We’ve all been doing financial reporting for a while so this is a bit different, it’s a great opportunity for people to work across the company with different teams that they didn’t necessarily work with before…. I would say it’s both been a challenge and an opportunity that we’ve really embraced and provided a lot of value to the organization as a result because our skillset is uniquely qualified to do this – we understand data, we understand processes and controls, so we can do this.”

ESG may drive those in the accounting profession to have to develop scientific understanding of issues, panelists also said.

“A good controller is a good business partner so we understand contract terms, the business model, the cash flow model of the company,” Janzaruk said. “A lot of these environmental concepts require an engagement in science,” he said. “I will not pretend to be an engineer, a chemist, a biologist or anything but you do need to have a working understanding of what the objective of the reporting is, no different than any other standard that you’re working through – that is an investment in your growth and your teams growth to make sure you can understand how to merge to news reporting.”

The remarks were part of a panel discussion that was moderated by Muneera Carr, executive vice president, chief accounting officer at Wells Fargo & Co. The discussions touched on a wide variety of issues, including the developing use of Artificial Intelligence (AI) in certain functions such as pulling key information out of contracts, analyzing large sets of data or trends for credit assessments, duplicate invoices, accruals, collection strategies and the like.

Other topics were cybersecurity rules, Responding to Noncompliance With Laws and Regulations (NOCLAR), data management, dealing with emerging standards, among other items.

Top Issues?

Asked by Carr which issues are especially on their minds these days, panelists highlighted: the pace of change, data management, emerging technology, ESG related issues, and developing talent.

The pace of change is the “thing that’s probably foremost in my mind,” Burgum said. “Between all of the financial reporting requirements, as well as nonfinancial reporting or ESG requirements, there’s a lot happening,” she said. “Technology is changing even faster than I would ever imagine we could,” she said. “So with all of that it’s the pace of change and making sure that our people are resilient and open to change and ready to accept that change, that’s probably been the biggest thing that I’ve been thinking about.”

There is a lot to contend with, including new reporting standards, emerging issues like Artificial Intelligence (AI), and ESG – amid a volatile macro economic environment, added Amie Thuener, vice president, corporate controller and principal accounting officer at Alphabet Inc.

“What I’m focused on besides getting through all those technical issues is just the talent and how we continue to grow train and challenge our finance professionals,” said Theuner. “I think more and more is being asked of the group, from technical accounting, SEC, and international reporting, financial data and analysis, emerging technologies to work better and differently looking constantly at process optimization to continue to be more efficient and more rigourous,” she said. “I think it’s fair to say we don’t just close the books, we need to keep thinking about how do we help our team to meet these challenges.”

Others said that data plays a big role in the broader scheme of things and thus is a large focus for firms.

“My team in addition to earnings releases and ‘Qs’ and ‘Ks’, we have over seven thousand filings we have to do with our banking regulators,” said Carr. “And it’s a lot of data about our loans, our securities and they’re moving this information from one end of the company to another,” she said. Data is “a huge part of my job and when you’re dealing with that much data you have to really rethink what’s your controls framework, and you have to bring that discipline to all that reporting that you do, and so perhaps rethinking how we’re organized from a controls standpoint, more standardization, more rationalization, more focus on data when it comes to controls as opposed to what we’re typically used to with variance analysis etc. A third point in addition to those, is ESG – that’s another big topic on our minds.”

 

This article originally appeared in the December 6, 2023, edition of Accounting & Compliance Alert, available on Checkpoint.

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