IA 107

SEPTEMBER/OCTOBER 2019 ISSUE 107

A successful programme for internal auditing

Whether you are a new accountancy student looking forward to attaining your professional accountancy qualification before taking on a career in the finance and accountancy sector, or a mature student looking forward to achieving your professional accountancy qualification so you can further enhance your current career opportunities, it is essential you fully understand what it will take to become a qualified international accountant.

Hard work Dedication Commitment Focus Resilience Adaptability Trustworthiness Motivation Professionalism

These are just some of the attributes that will help you as you embark on achieving your goal of becoming a qualified accountant and joining the many thousands of other international accountants around the globe. So, as you look to the next exam session in May 2020, what will help to maximise your chances of success?

Why not look through our top tips:

1. Enter the exams at the earliest opportunity and sit them Always look to enter the exam sessions at the earliest possible opportunity, in order to maximise your study and revision time. We offer two exam sessions every year in May and November, so there are no excuses for not sitting!

We provide lots of resources to help you study and give you an idea of how much studying you should be doing, and we strongly encourage you to practise past questions which can be found

within ‘MY AIA’. There is a vast array of resources on hand for you to utilise, so make sure that you set a realistic study plan in order to make full use of everything that is on off er to you. For further information go to: www.aiaworldwide.com/study. Alternatively, if you don’t want the added stress of working it all out for yourself, look at top tip number 2.

2. Utilise our interactive distance learning study programme The programme is known as ‘Achieve’ and is designed in collaboration with leading publisher of study materials for professional exams BPP Learning Media. Achieve aims to alleviate unwanted study stress, whilst providing you with a suite of resources targeted to optimising the likelihood of exam success.

Achieve guides your learning and provides you with access to advice, support and feedback from a specialist team of e-tutors, ensuring you consistently get the maximum benefi t from your study. The programme also off ers you mock exams with written feedback, tutor marked practice questions, free to attend webinars, a course e-book and more.

All these tools will undoubtedly enhance your chances of exam success, and your personalised study planner will allow you to maintain that healthy work/life balance that you have only previously wished for in the lead up to your exams. Achieve also off ers an exclusive interactive discussion forum, helping you to continually stay motivated by communicating with fellow students and accessing supplementary study information. AIA is so confi dent in the Achieve programme helping you to deliver the exam results you desire that we also off er the ‘AIA Pass Pledge’. This pledge states that if you fail your exam, we will off er you a free exam entry to re-sit the paper at the next exam session*.

*In order to be eligible for the ‘AIA Pass Pledge’ you must submit your practice questions on time and achieve 45 marks or more in your mock exam. For further information on Achieve go to: www.aiaworldwide.com/achieve.

3. Keep sitting the exams at every session until you qualify Whether you have passed or failed your previous exam session, you should always enter the next exam session. If you’ve passed, keep up your

positive momentum, as you are one step closer to your goal. If you failed, think of it like riding a bike. If you fall off , pick yourself up, dust yourself down, get back on and give it another go. It is essential that you don’t lose your enthusiasm; failing is a part of life and it makes us stronger and wiser.

4. Gain work experience and keep a record of it There’s more to qualifying as an international accountant than sitting the exams, and you’re not fully qualified until you have also gained three years’ work experience, or what we call Initial Professional Development (IPD).

You can gain your work experience before, during or after studying for the exams, but if you can it’s a good idea to be working in accountancy while you’re studying, as this will help you to apply what you’re learning in practice.

For a complete overview on IPD go to: www.aiaworldwide.com/ipd. Follow these top tips and enjoy a smooth and highly rewarding journey to becoming a qualifi ed international accountant. And always remember that we have a friendly Membership Services team on hand to assist you throughout... ●

Nick Bettes Nick Bettes Consulting

Recent reports, including from the IoD (bit.ly/2QLiF1j) and the House of Commons (bit.ly/2AUgbYf), refer to the “long tail” of lowproductivity small businesses. The Bank of England estimates that this gap is depressing UK GDP (and the income of business owners) by £270bn (bit.ly/2MnyDNj). This article argues that the main reason for low productivity is poor leadership. The owners of small businesses often have no formal management training and are unaware of the principles and advantages of good leadership. Many are also oblivious to the problem; the IoD reports that 80% of business owners rate themselves as average or above average managers, a result that has echoes of similar surveys about sex and driving.

Depressingly, 37% of UK business owners are “too busy” to measure the productivity of their company (bit.ly/2krkvpG). In my experience, this ignorance of basic management concepts is widespread amongst the owners of small businesses in the UK.

This article describes leadership behaviours that can help businesses to become more productive.

Small business productivity is a leadership problem Suggested causes for poor productivity include difficulty in accessing finance, lack of innovation and sluggish adoption of technology.

Since the opportunities to take advantage of these things are the same for all businesses, good or bad, the underlying cause must be some internal factor common to unproductive businesses. My advisory work with this type of business leads me to conclude that the root cause is simple; the quality of leadership.

Whilst some of the papers referenced above identify poor leadership as a factor, they do not see it as the root cause; that is, the key to taking advantage of new technology, accessible finance and so on.

It is usual to differentiate between “leadership” and “management”; the former being the sexy business of vision, motivation and innovation, whilst the latter is the mundane task of organising things. My experience is that successful leaders are good at both. I have worked with visionaries who have never completed anything, whilst reducing their employees to charred embers. I have worked with business owners whose employees, whilst organised like the Brigade of Guards, had no clue where the organisation was going or why.

“Leadership” in the rest of this article includes management.

What do effective leaders of small businesses do? The short answer is: “Not much”. The slightly longer answer is: ● They help employees to define the purpose of the organisation. ● They help employees to decide how to achieve that purpose. ● They help employees to become accountable f or results. ● They let go. ● They share the rewards.

Author bio Nick provides business coaching, consultancy and training, with a flexible, straightforward approach to helping business owners.

In the last issue of International Accountant, we started the conversation around the impact that the new International Code of Ethics for Professional Accountants (which was published last year and came into force in June 2019) may have in practice by exploring the changes and developments to the Conceptual Framework.

But if you are working as an accountant in business, preparing reports and supporting your organisation, or if you are providing accountancy and assurance services to smaller entities not classed as public interest, what else do you need to know? And what practical steps might you need to be taking?

This second article will explore the new provisions in the Code which envisage the role of the accountant as an ethical leader.

This key section considers the role of the practising accounting as an ethical leader.

Section 200.5 A3 Professional accountants are expected to promote an ethical based culture in the organisation. This may include the introduction and oversight of: ● ethics education and training programmes; ● ethics and whistleblowing policies; and ● policies and procedures designed to prevent non-compliance with law and regulation.

This may cause some raised eyebrows amongst those of you working in smaller companies. This requirement fi rmly places the role of ethical leadership within any organisation with the professionally qualifi ed accountant. Whilst this may at fi rst fi ll some of us with some trepidation – another set of meetings and documents to be responsible for – it could be considered to really enhance the role and position of the professional within the business.

Practical approaches Gagnon and Gould (2019) published a very useful overview of the practical ways which one professional body in the Netherlands has found to support the ethical development of its practitioners. This starts with the clear rationale supporting the ethical practice for all accountants, saying:

“Regardless of their job roles, professional accountants have a primary accountability to the public. In their ethical capacity, the more than 3 million professional accountants around the world play a critical role in building trust in business and the public sector. This means that throughout all activities, professional accountants must be anchored by their fundamental ethical principles of integrity, objectivity, professional competence and due care, confi dentiality and professional behaviour.”

Professional accountants are expected to promote an ethical-based culture in the workplace, enhancing the role of the professional within the business.”

This article emphasises that for accountants to be a key force in ensuring responsible business, they will fi nd themselves standing up against improper ethical practice and dealing with ethical dilemmas. This may also come at some personal discomfort, as the practitioner may well disagree with a consensus and be looking at business decisions from a wider ethical perspective beyond just economic gain.

All of this needs moral awareness, competence and courage – daunting but critical if accountants are to retain their professional standing in the business community and be able to infl uence practice for the better, rebuilding and retaining public trust in a meaningful way. If we add to this the idea that we will be taking a strong ethical leadership in any organisation, then the importance of support for practitioners becomes more essential.

Gagnon and Gould go on to observe that: “The biggest challenge is that moral courage usually comes at a price. In some situations, the price might appear too high, especially if it means resigning or facing personal threats. Alternatively, in some cases, a fundamental lack of ethical awareness and competence can lead to important ethical issues not being addressed, ultimately serving to compromise the reputation of the organisation and accountant.”

Withstanding pressure to breach ethics These observations link naturally into Section 270 of the Code; namely, the Pressure to Breach Fundamental Principles.

Digital transformation. First it was a buzzword, then it was a trend, and now it’s a day to day reality. Accountants are now facing the imperative to move their operations onto digital systems, to reinvent the way they do things for the information age, and to provide more streamlined, data-driven and personalised client services. And it’s not a one-time deal – technology moves at the speed of sound, so as soon as you’re up and running in your new environment, guess what? You’ve got to keep moving forward.

There are two ways of responding to that challenge: with fear, or with a resilient can-do attitude. The former isn’t very productive; the latter can help you to make a success of digital transformation. Going digital doesn’t have to be scary, if you take the most logical steps for your business.

Jules Carman Head of Digital Transformation, Accountancy, Sage

22 Think people, not tech So where should accountants begin? The answer is: with their people. Digital transformation projects mustn’t exist in a vacuum. They should tend to a purpose, aiming to solve a real-world problem or improve a real-world service in a way that benefits employees. If you do it backwards and try to foist tech onto people without considering their needs, the effect will be negative both for internal culture and for external client service.

With that in mind, any transformation project needs to start with an in-depth cultural assessment. Who are you as a practice? What do your accountants value? What keeps them up at night? What are they willing to change, and what are they keen to retain? These issues will help practices to identify the “gaps” in their systems that should in turn guide digital transformation. Start with the “why”, not the “what”.

We’ve all had the experience of having a new IT system land without any reference to what the direct benefi t will be. If you don’t include people in the planning process and fi nd out the answers to these questions, you’ll pay the price in the form of a lengthy education process helping employees to get up to speed and understand the value of new IT.

For accountants, it’s not just about their own people, either. It’s about their clients, and your employees know what they need better than

anyone. Digital transformation projects need to be rooted in their needs. How is your new technology going to make their lives more fulfi lling? That’s the goal.

Here are the three key phases of an eff ective cultural assessment to help you achieve it.

1. Involve everybody That means everybody, from senior management and HR, down to frontline teams. When you’re planning who to talk to, consider the wider impact of the technology you’re looking to implement. In an ideal world, your practice will be joined up and working as one, so don’t throw a new software into the mix without thinking how it’s going to impact other functions. Will finance have to change the way they chase

Digital transformation projects mustn’t exist in a vacuum. They should tend to a purpose, aiming to solve a realworld problem in a way that benefi ts employees.”

invoices? Will client-facing teams have to provide inductions for their customers to help them work with new processes?

If you bring representatives from the various teams involved into a room together at the start of the process, you stand the best chance of picking up these chain-reaction points early. Not only that, but involving diff erent business units helps them to develop a sense of ownership over the project which will in turn encourage them to commit to its success. Don’t only focus on the business unit closest to the project – treat your practice as a unifi ed whole and ask for input from everyone.

2. What are their pressure points? When conducting the consultation phase, avoid the temptation to come into the room with a ready-made proposal and effectively ask: “Any problems?” Give your employees a blank page to present their needs and concerns. What do their clients and customers want from them, and what do their stakeholders always ask for? How could technology help with those issues? You can’t always get what you want, but at the same time, the chances of anyone getting what they want are much lower if you don’t ask.

The aim of this process is to uncover the unknown – the things that keep your team up at night (and the things that they never want to change) which the digital transformation lead might not be aware of. No-one can be fully aware of the situation in all parts of the business – the only way to fi nd out is to ask.

Author bio Jules Carman has had an expansive career building growth strategies for leading technology organisations.

3. Aim for a bespoke project, not a playbook The consultation process can only be of any use, however, if the practice is committed to developing a bespoke project, rather than buying an off-the-shelf system. It’s no good finding out exactly what your staff and clients need if you’re then going to implement a pre-packaged system that doesn’t have the flexibility and adaptability required to meet those needs. Such systems are often cheaper in the short term, as they require less consultancy time, but it’s a false economy. An off-the-shelf system is much more likely to end up being a white elephant, whereas an agile, bespoke project runs much higher odds of meeting the needs of the practice and its clients. As a result, the fi nal consideration of the consultation phase in a digital transformation project should involve an experienced partner that can help you to plan your project. In-house teams shouldn’t feel like they own the entire process from top to bottom. If they run their consultation phase properly, they should be able to bring a deep, nuanced understanding of the company’s needs to the table.

The bottom line is that digital transformation should be led by people, not technology. Companies that work that way around will fi nd the path to success is much smoother than it otherwise might be. ●