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Coping with technological changes key issue for CFOs globally: survey
MORE chief financial officers (CFOs) in the world are left exposed as the rising volume and pace of data impacts their ability to quickly and accurately provide insights to boards.
A 2016 report by EY Financial Accounting and Advisory Services (FAAS) found that 66 per cent of those polled say the issue greatly impacts the effectiveness of corporate reporting, up from 57 per cent in 2015.
The survey, titled "How can reporting catch up with an accelerating world?", polled 1,000 CFOs or heads of reporting of large organisations across 25 countries, which included 40 from Singapore, as well as organisations with revenue of over US$500 million.
Coping with technological changes such as cloud-based systems, data analytics, robotic process automation and artificial intelligence is the top issue for 35 per cent of emerging-market respondents. It is also the No 2 issue for those in Europe.
Said Joon-Arn Chiang, EY Asia-Pacific FAAS managing partner, Ernst & Young LLP: "Many are encumbered by legacy systems that do not allow reporting teams to extract forward-looking insight from large, fast-changing data sets. The result is an increasing expectation gap between what boards now look for from corporate reporting and what CFOs can deliver. Until reporting catches up with technological advancements it will continue to be compromised."
Here in Singapore, CFOs grapple with changing stakeholder expectations, with 32 per cent saying this is a top external challenge, compared with the global average of 18 per cent.
Frequency of reporting requirements is another.
About a third and 40 per cent of global and Singapore respondents respectively rank their reporting operating model as "average".
And 56 per cent from Singapore and 37 per cent of global participants say transforming their model is a major focus of their role.
Among Singapore CFOs, more than half (55 per cent) expect to see a higher use in outsourcing, followed by captive shared services - offshore (45 per cent), onshore or near-shore captive shared services (43 per cent), managed services (35 per cent) and centralised centres of excellence (25 per cent).
Today, the dominant organising principle for corporate reporting is one that is led by the head office, but decentralisation is expected, with local markets taking on more responsibilities, the survey showed.
Those polled were split across the Americas, the Asia-Pacific, Europe, the Middle East, India and Africa and Japan, and covered 14 main industry sectors.