A professional accountant is a member of an accountancy profession body that prepares its members to perform the role of a professional accountant. For one to become a member has to go through a set standard of education and training as specified by the accountancy professional body. Professional accountants are also expected to abide by the strict codes of ethical conduct as specified by the professional accountancy body/ies they belong to. A professional accountant has also to ensure that he or she attains continuous professional development (CPD) hours as specified by the professional body as one of the conditions to remain members.
A professional accountant is a person who practices accounting or accountancy and is involved in the accounting system, internal control, budgeting and strategy formulation among other things. Most people know the accountant from a narrow angle of scorekeeping which involves collecting, recording, analyzing and presentation of information which gives assurance about the performance of the organization to its stakeholders. A professional accountant’s training enables him or her to handle a wide range of activities including the following;
The chief finance officer (CFO) is a member of the management team responsible for the financial operations of an organization. In this role he or she is responsible for the following;
- Internal control
- Risk management
- Management and financial accounting
Provision of information to stakeholders
The accountant also provides update information on the performance of an organization to its key stakeholders who include management and staff, board of directors, shareholders, investors, banks, revenue authorities and regulatory bodies among others to facilitate them in decision making.
Setting the ethical behaviour tone
The accountants are expected to abide by the code of ethical behavior of their professional bodies and are subject to disciplinary action if they breache the code of ethical behavior. Therefore it is the responsibility of an accountant to ensure the organization is complying with the law especially when it comes to financial reporting. Since an accountant is a key member of the team, his or her ethical behavior is expected to positively impact the behavior of his colleagues within the organization. His or her colleagues will not engage in malpractices if they know very well the accountant will not go along with them.
Advice on various matters
As a result of his or her training background, the accountant has the capacity to advice on various matters including the following;
- Sourcing of capital including the cost and form of capital
- Tax compliance and tax planning
- Compliance with law and regulations of regulatory authorities
- Risk management including insurance
- The impact of management actions on the performance of the organization
- Presentation of information to stakeholders
The chief finance officer (CFO) who is a professional accountant is part of the management team of an organisation and therefore he or she takes part in the strategic and business plan formulation process. The CFO is also tasked to regularly report on the performance of the organization against the approved budget.
The accountant does not prepare a budget for the organization except for his or her own section. He or she acts as the chief coordinator in the budget preparation process. He prepares budgeting guidelines and discusses them with the departmental heads. He also advises the departmental heads during the budgeting process. He finally prepares one budget for the organization from the departmental budgets but has to ensure that the budget is in line with mission of the organization. The accountant also helps in the implementation of strategies for both revenue generation and cost savings.
The accountant takes part in decisions relating to strategy formulation, planning of how to achieve the strategy and the monitoring of performance against plan. The regular monitoring against plan ensures the organization is still on course. In the process, the accountant performs the three important roles of problem solving, scorekeeping and attention directing. In attention directing the accountant highlights both opportunities and challenges which the organization has to exploit in order to achieve its goals.
The above is just intended to draw the attention of the Chief Executive Officers and Chairpersons of boards of directors to the role of their CFOs. Are you getting maximum value out of your CFO and his or her team? If no then do something about it. I have interacted with a number of CFOs who are highly underutilized at the detriment of the organization.
John Muhaise Bikalemesa
Director: Big Drum Advisory Services Limited