Financial system redesigning

When looking at reviewing financial data you need to consider the financial processes. In the diagram below (produced as part of a conference paper in May 2007), Gabriel F. Sékaly from the Institute of Public Administration of Canada looked at the key competences of the new chief finance officer (CFO). Traditionally, the way to ensure reliability in financial data had been to emphasise the controls and concentrate on centralised transaction processing. Sékaly, however, suggests that the better way to achieve this end is by inverting the triangle. The processing can be reduced by allowing data entry at point of responsibility and the control function can be reduced by process redesign. Inverting the triangle will have a two-fold benefit for organisations:

 a reduction in data-entry errors

 increased time for management accountants to work on decision support and risk management in order to benefit managers and the organisation.

Management accountants will effectively become internal consultants providing the financial information to support management decisions, adding the appropriate voice of caution and doing ‘what-if’ analyses to look at how risky the decisions may be.