22 July 2005
MEDIA RELEASE
ICPAS STATES ITS VIEWS ON THE ROLES & RESPONSIBILITIES OF A CFO
In the light of recent press articles on smaller listed companies hiring younger chief financial officers (CFOs), the Institute of Certified Public Accountants of Singapore (ICPAS) would like to share its views and offer some insights into the responsibilities and qualities expected of CFOs.
The Institute of Certified Public Accountants of Singapore understands the public’s concerns on the capability of young CFOs in fulfilling their job and responsibilities that are by no means easy, given today’s complex and changing global business environment, sweeping changes in the accounting and auditing standards, and increasing demands from the public and stakeholders to conform with corporate governance guidelines and maintain transparency in its operations. However, the Institute is of the view that the emphasis of the selection of a CFO should be on the candidate’s qualities, experience, accomplishments, track record, integrity, professional training and membership of a professional body.
A CFO is often involved in the preparation and reporting of information that may either be made public or used by others inside or outside the employing organisation. Such information may include financial or management information, for example, forecasts and budgets, financial statements, management discussion and analysis, and the management letter of representation provided to the auditors as part of an audit of financial statements. The CFO should prepare or present such information fairly, honestly and in accordance with relevant professional standards so that the information will be understood in its context.
Qualities of Today’s CFO
The modern day CFO needs to possess the following qualities:
· Strong leadership
· Professionalism
· Superior relationship skills to communicate with the Board
· Integrity and solid moral conduct
· Strong conflict resolution skills
· Superior change and strategic management skills
The CFO of today must be willing and have the courage to stand up against the sometimes over-ambitious CEO, the Board and audit committee when necessary. He should not succumb to pressure to please the bosses and conform with them just to keep his job. The CFO of today should never be intimidated in performing his duties. Tension in the board room can be beneficial for the company, so long as the CFO is using his professional judgement to add value to either the entire decision making process, or in adverse environments.
The CFO of today should exhibit the best ethical behaviour and inculcate the same corporate culture top down, across all levels, and emphasise the importance that senior management places on ethical behaviour. Based on his seniority and position in the company, the CFO has the ability to influence and encourage best practices and ethics to both rank and file staff.
In this regard, the Institute of Certified Public Accountants of Singapore requires its members to observe strictly the Code of Professional Conduct & Ethics and pronouncements on professional and ethical matters. The Code contains principles that govern its members’ practice and conduct in areas such as integrity, independence, competence and confidentiality.
Professional Qualifications & Continual Professional Development
The appropriate professional qualification is an important selection criterion of a CFO, for example, a recognised accountancy degree and membership with a relevant professional body, such as ICPAS. The professional designation, “Certified Public Accountant Singapore” or “CPA Singapore”, gives ICPAS members an identity instantly associated with integrity and professionalism in the accountancy profession. The “CPA Singapore” designation indicates commitment to true professionalism, a commitment employers appreciate.
With the ever-changing business landscape and increasing pressures placed on CFOs, having a sound support framework in place is vital to a CFO in keeping up with times. Such a support can be in the form of ongoing professional development. The modern CFO should be prepared to continually learn new skills and keep abreast of the latest developments in the accounting standards and corporate governance issues.
The Institute has in place a Continuing Professional Education (CPE) programme, which is conducted by its training arm, the Singapore Accountancy Academy. It is designed to keep the Institute’s members up-to-date with technical skills and knowledge, as well as provide training on soft skills and non-technical areas, such as interpersonal skills, creative thinking and leadership skills.
In conclusion, the Institute believes that the modern day CFOs should possess integrity, the necessary skills and capabilities, have the spirit and energy to take on new challenges and be fast and results driven. The role of a CFO in today’s context is more than just number crunching. CFOs should demonstrate Integrity, Commitment, Professionalism, Authority in their field and Superiority, the five acronyms that represent “ICPAS”.
The Institute of Certified Public Accountants of Singapore (ICPAS) is the national organisation for the accountancy profession in Singapore. With a membership of more than 17,000 members, ICPAS’ mission is to develop, support and enhance the integrity, status and interests of the accountancy profession in Singapore.
For further information, please call:
Ms Rosalind Wong
Institute of Certified Public Accountants of Singapore
Tel: 6749 8060 ext. 813
Fax: 6749 8061
Email: rosalind.wong@icpas.org.sg