6 Key Business Issues for 2020

6 Key Business Issues for 2020

This article was first published in The CA magazine, the magazine for members and students of ICAS. You can read the original version here.

Chartered accountants will play a key role in both rebuilding business trust and redefining success in a new Gen Z-led decade. Bruce Cartwright CA, Chief Executive Officer of ICAS, reveals the key issues for all CAs to keep in mind, from cyber security to shouting louder…

The last decade or so has been bruising for business – from the repercussions of the earlier financial crisis to the recent collapse of established companies such as Carillion and Patisserie Valerie, from the fallout from the BHS implosion to reported cases of corporate fraud. Business has come under the spotlight from media, shareholders, consumers and politicians. Increasingly, stakeholders, including investors and employees, are looking beyond the profit line: articulated purpose is key. Chartered accountants have a large part to play in reshaping the future by learning lessons from the past and helping not just to put a value to high agenda topics such as sustainability and employee happiness, but proving their importance and getting the message to land. Here are six things to consider as the new year beds in . . .

1. From Climate Change to Climate Crisis

We talk of saving the planet but in reality we are talking about saving mankind – that puts it in sharp focus and places it above my other five. What we do in the coming decade to tackle the climate crisis will define us all. In November 2020, the UN Climate Change summit is in Glasgow. Sustainability will be a key focus for ICAS as we lead up to that summit, and beyond. We want our members to understand they have an important role to play in bringing about positive change. They can help to create sustainable business models, supporting organisations to account for value beyond the balance sheet and finding ways to reduce carbon footprints. I hope that the next generation will see that accountants, across numerous roles, were a powerful force for good in meeting the key challenge of the decade.

2. Trust and How to Regain It

There’s no doubt the profession is being challenged on trust. This is not a passing fad but part of a wider picture that reveals a breakdown that goes far beyond the financial sector. It’s there at government level, at a macro level, and where people are looking, rightly or wrongly, for alternative forms of leadership, because how we operate as a society relies on trusting the established system. Accountants gain trust by demonstrating that we serve the wider society, not just an elite bubble. We ourselves believe the accountancy profession acts in the public interest – it’s up to us to show it. We have full control over our own professional ethics. Thinking and acting ethically is a demonstrable imperative.

The recent Brydon report is comprehensive and thought provoking. Back to that word “purpose” – Brydon has put several cards on the table, including setting out his definition of the purpose of audit. The audit profession, a cornerstone of accountancy, needs to build on this card. It’s the key to restoring trust in the audit process. With this and the earlier Kingman review we now have the platform for change – the profession will be judged on our actions.

3. Authentic Provenance

We are now in an era where people want provenance – they want to know where the food on their plate came from; where the jumper was made and what the conditions in the factory were. Accountants can play their part in good governance, and help businesses demonstrate their ethics, by tracking down and authenticating processes and origins. This forensic analysis of supply chains goes back to our traditional roles and should be natural territory for accountants. We should grasp the opportunity.

4. AI, Data Analytics and Owning the ‘Final Mile’

AI and data analytics give us an increasing ability to amass degrees of information never seen before. But once collected, the data still needs to be interpreted. So what does this mean to us? The accountant doesn’t need to be able to code the machines that produce the data, but they need to understand where it comes from, how it was designed, how it was thought through, and what its provenance is. After all, what’s the point of having piles of data if you don’t know what it means for the business? That’s the so-called “final mile”. The accountancy profession can own and articulate that final mile if we are up to speed and competent with what data can do.

5. Internationalism and Cyber Security

Although traditional areas of accountancy are still bound by national legislation, accountancy entails evermore international collaboration as everything becomes more global. Technology is taking us to a place without boundaries. So the opportunity for the accountant is wider than ever before.

For example, cyber attacks don’t respect borders – they can come from anywhere and cyber security is an issue for us all. National boundaries may be of diminishing importance, but corporate borders and the integrity of data within must be secured.

6. Demonstrate Our Value

Our profession has to get better at demonstrating its worth beyond producing the numbers. In practice, we do – but it’s not always visible to outsiders. Just as most business people do a job without crowing about it, your average accountant takes great pride in their work and hopes those around them respect what they do. But if we don’t articulate the value of our community, that message can get lost. Again it comes back to “purpose.” What part will you play in demonstrating the purpose and value of the profession?