Sunday Dec 15, 2024
Sunday Dec 15, 2024
Tuesday, 28 July 2015 02:24 - - {{hitsCtrl.values.hits}}
The inaugural Global Management Accounting Summit 2015 organised by the Institute of Certified Management Accountants (CMA) kicked off yesterday at a special ceremony attended by President Maithripala Sirisena, President of the International Federation of Accountants (IFAC) Olivia Kirtley and Canadian High Commissioner in Sri Lanka Shelley Whiting, among others. Companies were recognised for integrated reporting of their accounts in a colourful presentation, with Diesel and Motor Engineering PLC emerging the overall winner, and LB Finance PLC and Mercantile Investments and Finance PLC winning first and second runner up respectively.
Delivering the key note address at the event, IFAC President Kirtely said that CMA Sri Lanka was a valuable addition to the global IFAC family, and that she was happy to continue the long standing strong relationship between IFAC and the Sri Lanka accountancy profession.
“Sri Lanka’s desire for a strong accountancy profession is commendable. The country is not home to not one but three IFAC member bodies, representing more than 200 management accountants and some 3500 students, and CMA Sri Lanka has become a valuable addition the IFAC family,” she said.
This is not Kirtley’s first visit to Sri Lanka, having already visited the island in a personal capacity to help victims of the December 2004 tsunami to get their livelihoods back in order.
“I came here almost exactly ten years ago in a private capacity, but very much using my skills and experience gained as an accountant in business. Following the tsunami in 2004, my local community in Kentucky, USA, raised over a million dollars. Our goal was to raise funds for people to rebuild businesses and get the economy going again. We volunteered to assist in a responsible and accountable way. There were very experience accountants on our board. We arrived in October 2005 and spent over a week here, evaluating their business values in determining how we could help,” she explained.
Accountancy contributes to a better society
This cemented her belief in the value of accountancy as a profession, she added.
“It was rewarding to see how our profession, using our knowledge and experience help so many who did not often know how to even help themselves. We were also able to ensure monies received were properly managed. During this time of crisis our profession acted in public interest and provided leadership for transparency, accountability and good governance. That is what our profession does. Not in just times of crisis to help our neighbours, but every day, all year round,” she said.
Fast forward 10 years, and on her second visit to the island, many good things had happened here, the formation of CMA Sri Lanka being one of them.
“I want to talk about the tremendous value that management accountants can bring to the economy.
Let’s start with CMA Sri Lanka’s initiative. It is to train and develop management accounting professionals who are innovative, socially responsible, knowledgeable and capable of sustainable value creation. These are simple words, but very wise. CMA Sri Lanka is an excellent example of the way in which professional accountancy organizations improve national prosperity. When we take just a brief look at its education activities, it is easy to see both why and how accountancy professionals add value. CMA graduates have three years of practical training to back up their studies. They have an opportunity to complete tiered education at foundation level, managerial level, strategic level and integrated case study programmes, and they have close cooperation with CA Sri Lanka, clear pathways to CA certifications if they so choose,” she explained.
Diverse roles
All this work ensures that CMA graduates are equipped with outstanding foundations from the moment they enter the workplace.
“Our profession can only achieve its full potential when it harnesses all the talent available to it, with the inclusion of the entire talent pool of men and women from all backgrounds and ethnic groups, for organizational success,” said Kurtley.
Commending CMA’s commitment to taking accountancy studies to the provinces, Kurtley said that encouraging prgrammes around the country in Sinhala and Tamil was essential and timely.
“CMA graduates are bound to act in public interest, following a code of ethics based on international ethics code. They are highly trained, ethical and diverse. These are just some of the hallmarks of CMA Sri Lanka graduates that make them outstanding hires and great contributors to society,” she added.
Kirtley further stated that accountants in business work in a wide variety of roles across all industry sectors and that means our perspective extends far beyond the numbers. CMA Sri Lanka has risen to the challenge of a new business century, she said, in which the old measure of success, valuation, has been superseded by a far better measure: value creation.
“Accountants in business play a fundamental role in value creation. Few other professionals have as diverse and as significant a role in day to day organizational operations or have the skills or the experience to better understand business value,” she added.
What reports don’t say
Consultant Strategy and Integrated Thinking Graham Terry who was on the panel of judges for the integrated report awards highlighted several shortcomings he had noted in some reports submitted for consideration.
The judges, he said, identified some areas that needed to be enhanced, which need improvement so that overall standards can be lifted to an even higher level.
“Integrated reporting takes many attempts before one gets anywhere near perfection. Perhaps the main disappointment for us was the length of the reports. Immense work must’ve gone into preparing them. However, many had over 400 pages. oNly a few were under 300 pages. Most reports contained huge amounts of data that could’ve been placed in other reports such as the sustainability report or displayed on the website,” he explained.
It is a very difficult for a stakeholder to read and appreciate a report with so much data, said Terry, adding that, in truth, once a report exceeds a 100 pages, it begins to lose its impact, as an integrated report is meant to present material and important information in a way that readers can appreciate and make assessments about future prospects.
“For example, in many reports describing governance and other processes. Overly long profiles of directors and management, sustainability information that were not important in the context of the company. Detailed analysis, lengthy demographics analysis, etc., detailed financial statements. Some of these may be part of the culture, but the fact remains that it affects integrated reporting,” he explained.
As a self confessed skeptic, Terry said he is curious about what a report doesn’t tell him. Most reports have progressive and encouraging information. In fact, some might have been written by PR experts. However, few outlined new challenges or negative circumstances.
“An integrated report needs to present both positive and negative issues in a balanced manner. We felt that some companies were just following what others had done. As number of companies had spelt processes in much detail, describing how they were managing business for the benefit of all concerned. But they gave few outcomes. Few examples of the outcome of employee satisfaction; nor did we see much evidence of the stakeholder relations,” he said.
Also missing from some of the reports were details on executive remuneration.
“As a stakeholder I want to know how executives are incentivised. Ensure that executives are managing the business effectively,” he said.
Referring to the mentions made with regard to social and environmental concerns, Terry said it should’ve given more priority.
“Other companies treated these as Corporate Social Responsibility, which came across as rather paternalistic,” he said.
Pix by Upul Abayasekara
