The challenge for accountants in the current crisis times is to ‘look’ beyond the numbers, a top accounting professional said. “Accountants are really good at interpreting the numbers and saying what is beyond the numbers. They should move beyond the numbers, and help boards understand the risks and the advantages and returns,” Peter Nash, Australian Chairman KPMG who was here to attend KPMG’s 115th anniversary celebrations, told the Business Times.
Stressing that accountants could do more, he noted that boards (of companies) should be asking ‘more’ from their auditors. “Then they can give insight to the risks of volatility,” he added.
Highlighting the local post war scenario he noted that most ‘capital’ is extremely mobile. “In the post-war era returns are available, which is why capital (investment) will find its way to Sri Lanka,” he explained. He added that in this context the accounting profession is crucial in growing economies. “This enhances economies such as Singapore to attract foreign capital," he explained.
He added that auditors need to have a strong relationship with corporate boards. Auditors must be open (candid) in communicating with the board and its audit committee and may have to say things the client does not want to hear. He said that they may have to stand up to the client, stressing that accountants should do much more than just record transactions and passively generate documents-they actively analyze, interpret and convert that data into actionable business intelligence.
“Based on where you want to go with your business, they should be able to tell you how to get there. If your accountant is just showing you the financial tracks of where you have been, you've made a bad choice and you're missing out on a great opportunity to receive good business advice,” he further said.
When investors are trying to invest in a country, they’ll look for streamlined processes. In this regard, the IFRS (International Financial Reporting Standards) is a streamlined process, he added.
“Companies that use the same standards to prepare their financial statements can be compared to each other more accurately,” he explained, adding that this is especially important when comparing companies located in different countries, as they might otherwise be using different rules and methodologies to prepare their statements. This increase in comparability has helped investors better determine where their investment dollars should go.