Keynote Address by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and Education, at ISCA's Professional Accountants in Business (PAIB) Conference on 17 July 201917 Jul 2019
Relevance and Importance of the Accountant’s D.N.A.
in the New Phase of Globalisation
Ms Yvonne Chan, Vice President of ISCA
Ladies and gentlemen
1. Good morning. Thank you for inviting me here today to speak at the ISCA PAIB Conference.
2. The theme for today’s Conference is “Opportunities Amidst Transformation”. This is an apt topic given where we are now.
a. As DPM Heng, or the Minister for Finance said in his Budget speech 2019, we are in a different phase of globalisation.
b. There are four shifts affecting the global landscape:
i. First, shifting global weight to Asia;
ii. Second, rapid technological advancements;
iii. Third, changing demographic patterns; and
iv. Fourth, the decline in support for globalisation.3. In tandem with the changing global landscape, accountants’ ways of working are evolving. With new technologies increasingly automating the process of balancing trial balances, there is a need to evolve, and to find new ways of working.
4. Accountants’ roles and responsibilities are also changing.
a. In 2018 McKinsey Global Survey, they conducted a survey involving about 200 CFOs.
b. They found that the CFO role is becoming increasingly broader and more complex.
c. The number of functional areas reporting to the CFO is increasing.
d. The accountants’ role in an organisation is also evolving.5. But with change, there will also be new opportunities for accountants.
a. Accountants will have new opportunities to redesign your roles in organisations.
i. Besides being book- and gatekeepers, accountants will have opportunities to capture new functional areas in organisations and to become valued business partners.
b. Accountants will also have new opportunities to partner with professionals from other sectors to capture value in new and high growth areas, and go regional.
i. These include areas such as business valuation, infrastructure, and project financing, as well as intellectual property financing.
ii. So take infrastructure and project financing, for example.
1. According to G20 Global Infrastructure Outlook estimates, the amount of investment needed in infrastructure will grow to US$94 trillion by 2040.
2. In Asia alone, infrastructure investment needs are expected to grow to US$51 trillion by 2040.
3. To keep pace with the growing needs in the infrastructure space, more project financing specialists will be needed.
4. Accountants are well placed to capture the opportunities in this space, given your familiarity with risk management, financial modelling, and financial forecasting concepts.6. So I was actually very happy today to see that on your tables you have the new Infrastructure and Project Financing modules, because that’s a way of upskilling, that’s a way of gaining new opportunities and opening to new opportunities – high value-add, higher fees, and growth in business. I just came back from Luxembourg last week. In Luxembourg, we had the AIIB (Asian Infrastructure Investment Bank) Conference, and it’s very clear that there is a huge demand in Asia for infrastructure. This is a space in which accountants from Singapore can play in.
7. Many of the topics in today’s Conference will cover the new opportunities for accountants in greater depth.
8. That said, even as you set your sights at new horizons, it is important to hold on firmly to the qualities that you, as accountants, are valued for.
a. So in my view, there are three important qualities that should be part of an accountant’s D.N.A. These are:
ii. Nimbleness; and
b. D.N.A. So let me touch on each in turn.The Accountant’s D.N.A.
9. First, Dependability.
a. There are two aspects to this:
i. First, depth of technical accounting knowledge – that’s something which you cannot optimise; and
ii. Second, breadth of understanding about businesses.
b. Together, these ensure that accountants have the expertise to impart insightful advice to businesses. In turn, an accountant’s advice helps businesses improve performance.
c. The link between accounting expertise and business performance is well documented.
i. For example, in 2016, the International Federation of Accountants worked with researchers at the Bucharest University of Economic Studies to review 90 academic research papers on the link between accounting expertise and business performance.
ii. Among others, the researchers found that the existing literature supported a positive association between a business’ access to accounting expertise and business’ performance.
d. With dependability, accountants can value-add to businesses. But what it also means is, as accountants, if you can strengthen business performane, you are also contributing to Singapore’s reputation as a trusted business hub. Indirectly, you are upholding the standards for which Singapore is known. And you do this by the advice that you provide to businesses.10. Second, Nimbleness.
a. This is about responding quickly to new challenges, capturing new opportunities quickly, and adapting to the latest best practices.
b. Nimbleness underpins the business acumen that guides the accountant’s advice to organisations.
i. It also ensures that accountants have their pulse on the changing landscape and business drivers, and are quick to respond and help shape business strategy.
c. So for example, I recall the apprehension that some accountants had, when new technologies like Robotic Process Automation and blockchain first emerged.
d. But what do we see now? Accountants and accounting entities are already evolving and doing so deftly.
i. In audit and advisory services, accounting entities have been creating new solutions for businesses.
1. Precursor, which the Minister for Finance mentioned in his Budget 2019 speech, is one example.
ii. In corporates and organisations, accountants are also changing the way that things are being done.
1. In the public service, the Accountants-General’s Department created a FI@Gov platform in 2016.
2. FI@Gov allows Government entities to conduct financial analytics to monitor financial health and performance.11. Let me turn to the last quality, Accountability.
a. Accountability simply refers to the integrity and ethics that underpin all aspects of the accountant’s work.
b. With accountability, businesses and the general public can place trust in the work of accountants. That’s a very important quality.
i. They need to be assured that the accountant has exercised proper judgement when reporting on the financial health of a business.
ii. They also need to be assured of the accountant’s independence and objectivity.12. How can these three qualities help provide value in the changing world?
a. Well, they provide a beacon of light to guide the accountant in times of uncertainty and change. They also provide an impetus for change.
b. I recall the uncertainty surrounding the global accounting profession following the fall of Enron in the early 2000s.
i. There were news reports that “accounting [was in] in a crisis”.
ii. However, the global accounting profession pulled through and has come through stronger than ever.
iii. So in my view:
1. The accountant’s dependability helped the profession to bounce back;
2. The accountant’s nimbleness helped the profession to evolve to become stronger; and
3. The accountant’s accountability helped the profession to regain the public’s trust in accountants.
c. As in the past, the accountant’s D.N.A. remains important in this new phase of globalisation.13. There are various things that you can do to enhance your D.N.A.
a. To enhance your dependability, consider sharpening your core accounting skills. Embark on the Singapore Chartered Accountant Qualification journey, if you have not already done so.
b. To enhance nimbleness, consider gaining new skills and knowledge in accounting.
i. The new ISCA Infrastructure Finance Pathway and Qualification which I mentioned earlier is a good start.
1. This specialisation has been developed with the support of Infrastructure Asia.
2. The specialisation is another exciting development in the infrastructure space.
3. I am confident that the specialisation will equip accounting professionals with the skills and knowledge needed to capture growth in the infrastructure space.
c. To enhance your accountability, I urge you to remain committed to, and abide by ISCA’s Code of Professional Conduct & Ethics.
d. Finally, I would also like to urge accountants to explore greater collaborations with other professions – lawyers, engineers and architects. You can leverage off each other’s contacts and networks, and open new doors to business opportunities simply by partnering together.
e. In Government, we have set up the Professional Services Programme Office (PSPO) to grow the professional services sector and help it to capture high value-add work. Do feel free to contact PSPO if you wish to find out more.Conclusion
14. Let me conclude.
a. Henry Ford once said: “If you always do what you’ve always done, you’ll always get what you’ve always got”.
b. With the world changing rapidly, accountants will need to evolve and step up to be trusted business advisors to your companies.
c. The three qualities in your D.N.A. – dependability, nimbleness and accountability – remain relevant and important, as you chart new waters with your companies.15. With this in mind, I wish all of you a fruitful and transformational conference. Thank you very much.