Businesses will find it tougher to raise finance, be less likely to give credit and will place greater demands on qualified accountants in five years’ time as a result of the current global economic downturn, new research by ACCA (the Association of Chartered Certified Accountants) has shown.
An increased focus on risk management means that accountants will need to demonstrate complex business and managerial skills, claims the survey of 750 business executives across eight countries.
ACCA and research company the BPRI Group asked chief financial officers, partners and senior accountants in Europe, Africa and Asia how business will have changed in five years’ time as a result of the global economic downturn; what demand they saw for qualified accountants in 2014 and what skills will be in demand.
The resulting report, Accountancy: The future outlook shows that Chief Financial Officers, partners and senior accountants around the world are very concerned about the future financial stability of clients and customers, with 87% believing that businesses will be cautious in giving credit. They expect the sub-prime mortgage crisis and the ensuing global economic downturn will have far-reaching repercussions, with 84% believing business will be more wary of risk taking and 76% strongly believing that raising funds will be more difficult as a result.
Nearly 70% believe that executive pay and bonuses will be much more closely aligned to long-term performance as a result of the current situation, with the same percentage also believing that complex funding will be more common. If raising finance is more difficult, the report suggests that accountants will need to be more resourceful in coming up with solutions.
Globally, 63% of respondents expected to see an increase in demand for accountants, not only because they saw an upturn in business, but also because many felt accountants were essential for business to deal with a long term tougher trading climate.
The research also uncovers a growing global expectation that accountants will fill relatively complex roles – with financial professionals being expected to have skills in enterprise risk management, strategic scenario planning and improving use of data. At the same time, basic accounting skills, such as financial audit, financial narrative reports and budget planning which will be in demand in many emerging economies will be taken for granted in many others – with accountants expected to have the full range of skills. Where basic skills are not outsourced, senior business people take it as a ‘given’ that those accounting activities will form part of the qualified accountant’s ‘technical toolkit’.
The survey is part of a series of research and commentary aimed at understanding the impact of the global economic conditions on the accountancy profession, with the aim of helping finance professionals to add value to clients and customers. Details of the research are available on here, ACCA’s dedicated site which looks at the current global economic conditions.
ACCA Chief Executive Helen Brand said: “The results of our research show that the current global economic downturn is expected to have a significant impact on global business for the foreseeable future, and will create challenges and opportunities for our profession. We are committed to continue working with business to ensure ACCA qualified accountants can add considerable value to business by accessing finance, identifying drivers of value and profitability and driving down costs.”