Drivers of change in the UK - ACCA

21 Pages·2013·5.55 MB·English

Drivers of change in the UK
ACCA DRIVERS OF CHANGE IN THE UK INTRODUCTION
Introduction
This report outlines the UK-relevant findings from a global survey
conducted in 2012 by ACCA and IMA across their membership on CONTENTS
drivers of change for the accountancy profession. It presents the
UK’s key drivers of change in the short, medium and long term for About the survey 3
a variety of businesses. By identifying and exploring emerging
Key findings: drivers and their impact 4
trends, it can help accountants and business leaders prepare for
an uncertain tomorrow.
Key findings: short term 5
This report goes further than simply identifying critical drivers Analysis: by size and sector 6
across various time frames: it explores the extent of their impact
Analysis: by role of respondents 8
according to a firm’s size and activity.
Key findings: medium term 9
What is most telling from the analysis is that accountants share
similar lines of thought with senior executives. For instance, both Analysis: by size and sector 10
accountants and senior executives highlight a need for more use Analysis: by role of respondents 12
of non-financial and integrated reporting, as well as the need for
Key findings: long term 13
accountants to have a more strategic role.
Analysis: by size and sector 14
Analysis: by role of respondents 16
Drivers and how they relate to each other 17
Five imperatives for the accountancy profession 18
Five imperatives for business 19
Methodology 20
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ACCA DRIVERS OF CHANGE IN THE UK ABOUT THE SURVEY
About the survey
In 2012, ACCA and IMA conducted a global survey
to identify future drivers of change that will affect FURTHER READING
businesses and the global accountancy profession
Other reports related to ACCA’s global Drivers of Change survey are also available:
across three time frames: the short term (up to three
years into the future), the medium term (4–9 years) • Drivers of Change in the US (ACCA and IMA, February 2013)
and the long term (10+ years).
• Drivers of Change in Asia-Pacific (ACCA and IMA, February 2013)
Over 550 professional accountants and business
• Drivers of Change: Global Perspective (ACCA and IMA, February 2013)
leaders from different sectors of the UK economy
offered their insights. • 100 Drivers of Change for the Global Accountancy Profession
(ACCA and IMA, September 2012)
Respondents were asked to rate each of the
drivers on a scale of 1 to 7 (where 1 = no impact
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and 7 = significant impact).
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: DRIVERS AND THEIR IMPACT
Key findings: drivers and their impact
In the immediate future, businesses and
accountancy professionals in the UK are most TOP THREE DRIVERS IN THE SHORT, MEDIUM AND LONG TERM
concerned, by far, with rises in fuel and energy
prices. In the more distant future, however, trends
related directly to the profession, the economy or
ENVIRONMENT – Increased fuel and energy prices 5.49
politics will take precedent. TM
R
OR
SCIENCE AND TECHNOLOGY – Cyber security challenges for business 5.01
Accountants will be expected to play a far greater HE
role in everything from strategic decision making ST
SCIENCE AND TECHNOLOGY – Ease of internet access for the general population 4.78
to the design of new revenue models, while
maintaining a balance between financial
stewardship and entrepreneurism in a global
economy where businesses are operating in a M ACCOUNTANCY – Increased focus on the accountant’s role as business
5.00
volatile, uncertain and competitive environment. partner and the broader skill sets required
M
U
IR ACCOUNTANCY – A requirement for businesses to provide increased non-financial
D 4.92
E information and the continued emergence of integrated reporting models
E
T
M ECONOMY – The impact of businesses from BRIC economies (Brazil,
4.75
Russia, India and China) on businesses from developed nations
ECONOMY – Changes in the global reserve currency
4.59
G M from the US dollar to a different currency
N
R
POLITICS – A change in the focus of global governance institutions 4.52
OE
LT
ECONOMY – In an electronic world, a radical alteration of the system
4.45
of using money as the basis of a system of exchange
0 1 2 3 4 5 6 7
Mean score
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: SHORT TERM
Key findings: short term
UK respondents reported that the rise in energy
and fuel prices will be the most pressing issue TOP THREE DRIVERS (SHORT TERM)
facing businesses in the immediate future.
‘High cost of fuel and
ENVIRONMENT – Increased fuel and energy prices 5.49
T
M
energy reducing overall R
OR
business profits’ SCIENCE AND TECHNOLOGY – Cyber security challenges for business 5.01
HE
T
S
SCIENCE AND TECHNOLOGY – Ease of internet access for the general population 4.78
‘Operating costs driven
by energy scarcity’
0 1 2 3 4 5 6 7
Mean score
On the other hand, the second and third most
critical drivers that are expected to have significant
impact relate to science and technology.
The cyber security challenges posed by an array of access for the general population. Low-cost
threats constituted the second most likely driver to smartphones offer the potential to take the
‘Increasing role of technology
have an impact in the short term. As the world has internet to almost every citizen in the next few
to streamline businesses, become ever more reliant on computers, the years, and the true potential of the Web has yet to
continued digitisation of financial services has reveal itself. The internet is transforming industry
give market advantages and
opened up individuals and organisations to threats supply chains in many sectors and threatening to
change the way we work’
from cyberspace, and new forms of cyberterrorism, reinvent completely some industries, such as
cybercrime and cyberfraud will continue to emerge. publishing. At the same time, social media are
creating new opportunities to engage the public
The third critical driver that is expected to play a and expand individual social spheres in a manner
role in the immediate future is the ease of internet unthinkable before.
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: SHORT TERM
Analysis: by size and sector
The rise in energy and fuel prices and cyber security
issues were the challenges most reported by TOP THREE DRIVERS: BY SIZE OF ORGANISATION
companies, irrespective of their size. It is no
surprise, however, that small and medium-sized
ENVIRONMENT – 5.28
enterprises (SMEs) reported higher levels of Increased fuel and energy prices Large organisation 5.01
concern about rising fuel prices and energy costs TM SCIENCE AND TECHNOLOGY – (≥250 employees) 4.84
R Cyber security challenges
as, on average, these costs represent a heavier
OR for business
burden for them than for larger organisations. HE SCIENCE AND TECHNOLOGY –
T Business impact of social media 5.77
S SME 5.03
SCIENCE AND TECHNOLOGY –
Large organisations (with more than 249 employees)
Ease of internet access for the (0 to 249 employees)
placed ‘the business impact of social media’ in third general population 4.89
place in their list of concerns while SMEs gave more
0 1 2 3 4 5 6 7
importance to the ‘ease of internet access for the Mean score
general population’.
From a sectoral perspective, UK businesses
identified a further increase in the volume and
TOP THREE DRIVERS:
complexity of regulation as a critical short-term
ACCOUNTANCY PRACTICES COMPARED WITH CORPORATE SECTOR
driver likely to dampen growth while accountancy
practices highlighted the impact of social media
on business. ENVIRONMENT – 5.66
Increased fuel and energy prices Accountancy 5.04
TM SCIENCE AND TECHNOLOGY – practices 4.98
R Business impact of social media
OR
SCIENCE AND TECHNOLOGY –
HE Cyber security challenges
T for business 5.41
S
LEGAL – Corporate sector
A further increase in the volume 4.95
and complexity of legal regulation 4.82
0 1 2 3 4 5 6 7
Mean score
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: SHORT TERM
Unlike their overseas peers, respondents in the UK
corporate sector tended to be more worried about TOP THREE DRIVERS:
the complexity of regulation and less concerned COMPARISON OF UK AND GLOBAL CORPORATE SECTORS
about the potential strengthening of corporate
governance regulation and practice globally.
ENVIRONMENT –
5.41
Increased fuel and energy prices
UK 4.95
TM SCIENCE AND TECHNOLOGY – 4.82
R Cyber security challenges for business
OR LEGAL –
HE Aco fmurpthleexri tiny corfe laesgea iln r ethgeu lvaotilounme and
T 5.34
S BUSINESS – 5.05
The potential strengthening of Global
corporate governance regulation
4.92
and practice globally
0 1 2 3 4 5 6 7
Mean score
TOP THREE DRIVERS:
COMPARISON OF UK AND GLOBAL ACCOUNTANCY PRACTICES
5.66
ENVIRONMENT – UK 5.04
TM Increased fuel and energy prices 4.98
R SCIENCE AND TECHNOLOGY –
OR Business impact of social media
HE SCIENCE AND TECHNOLOGY –
T Cyber security challenges for business 5.39
S
SCIENCE AND TECHNOLOGY –
Ease of internet access for the general population Global 4.86
4.87
0 1 2 3 4 5 6 7
Mean score
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: SHORT TERM
Analysis: by role of respondents
Increases in energy and fuel prices were cited by
accountants and senior executives alike as the most INCREASE IN FUEL AND ENERGY PRICES
important driver in the immediate future.
REPORTED BY 88%
UK senior executives and managers identified cyber
security challenges facing businesses as the second
critical driver while accountants gave more senior executives: 78%
importance to the increasing cost and accessibility
of higher education, mentioned by 68% of these accountants:
respondents. Accountants ranked cyber security
challenges as their third critical driver.
The impact of social media in creating new
CYBER SECURITY CHALLENGES
mechanisms for engagement with customers and
business partners was highlighted as the third most
CITED BY
important driver by senior executives while
managers felt that the strengthening of corporate
governance regulation and practice globally would
play a greater role.
5 7 5 8
out of out of
senior executives accountants
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: MEDIUM TERM
Key findings: medium term
The global economy is underpinned by a complex
infrastructure that allows it to function. In this TOP THREE DRIVERS (MEDIUM TERM, 4–10 YEARS): UK
infrastructure, the accountancy profession plays a
crucial role.
M ACCOUNTANCY – Increased focus on the accountant’s role as business
5.00
In the UK, the driver that is expected to have the partner and the broader skill sets required
M
U
most impact in the medium term, 2016 to 2022, is
IR ACCOUNTANCY – A requirement for businesses to provide increased non-financial
the increasing importance of the accountant as a D 4.92
E information and the continued emergence of integrated reporting models
E
business partner and the need for accountants to T
M ECONOMY – The impact of businesses from BRIC economies (Brazil,
have a broader skill set. This is not surprising. Owing 4.75
Russia, India and China) on businesses from developed nations
to the sheer breadth of economic, commercial and
regulatory challenges and changes on the horizon,
0 1 2 3 4 5 6 7
the CFO and the accountancy function will play an
Mean score
increasingly central role in business. Three particular
aspects of this enlarged remit were emphasised:
accountants’ enhanced strategic responsibility; the
broadening of audit and compliance; and the as important as financial information as a driver own right and as sources of future competition
importance of an assessment of ‘total sustainability’. of business value and risk. Also, in response to for the traditionally dominant economies. These
demands for a holistic picture of organisational nations, and India and China in particular, represent
‘Change the way accounting is
health, models of integrated reporting are being the fastest growing of the world’s emerging large
viewed. Accountants becoming increasingly adopted. economies. They are becoming increasingly similar,
a more integral part of the in terms of economic power, to the older industrial
The impact of emerging economies in Brazil, Russia,
economies with which they are now competing. For
decision-making process’
India and China (BRIC) on businesses in other parts
example, in 2012, Brazil overtook the UK to become
of the world ranked third. As the global economy
the sixth-largest economy, globally, in GDP terms.
The second critical driver is the requirement for re-balances, traditional markets and zones of
businesses to provide increased non-financial economic and political power are experiencing ‘Effect of emerging economies on
information coupled with the emergence of considerable turbulence, while new centres of
how and where we do business’
integrated reporting models. Non-financial influence are emerging. The BRIC economies are
information is increasingly recognised as being becoming increasingly important as markets in their
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ACCA DRIVERS OF CHANGE IN THE UK KEY FINDINGS: MEDIUM TERM
Analysis: by size and sector
Differences can be found between organisations
of different sizes. Large enterprises highlight the TOP THREE DRIVERS: BY SIZE OF ORGANISATION
increased focus on the accountant’s role as business
partner and the broader skill sets required as the
most important driver. ACCOUNTANCY – Increased focus on the Large 5.28
M accountant’s role as business partner and organisation 5.16
the broader skill sets required
M (≥250 4.89
U
On the other hand, SMEs highlight that the main ACCOUNTANCY – A requirement for businesses to employees)
IR provide increased non-financial information and the
driver in the medium term is the increased global D continued emergence of integrated reporting models
E
competition for limited natural resources such as ET ACCOUNTANCY – Greater harmonisation of 4.63
M global accounting and business standards SME 4.60
fossil fuels and water. It is no surprise, however, that (0 to 249
ENVIRONMENT – Increased global
SMEs reported higher levels of concern for natural competition for limited natural resources employees) 4.65
resources, as any incremental rise in fuel prices and
0 1 2 3 4 5 6 7
energy costs tends to represent a heavier burden Mean score
for them than for larger organisations.
Accountancy practices and the corporate sector
(including financial services) share similarities in that
TOP THREE DRIVERS:
both rate the broader, strategic role of the
ACCOUNTANCY PRACTICES COMPARED WITH THE CORPORATE SECTOR
accountant and the requirement for businesses to
provide increased non-financial information as the
top two drivers. Accountancy practices, however, ACCOUNTANCY – Increased focus on the Accountancy 4.75
identified the adoption of cloud computing by M aacncdo tuhnet abnrot’as droelre s kaisl lb suestisn reesqsu piraerdtner practices 4.72
M 4.68
businesses as the third driver that will affect U SCIENCE AND TECHNOLOGY –
IR Adoption of cloud computing by business
businesses while the corporate sector gave more D
E ACCOUNTANCY – A requirement for businesses to
importance to the increasing role of BRIC economies. ET provide increased non-financial information and the 5.08
M continued emergence of integrated reporting models Corporate
ECONOMY – The impact of businesses from sector 5.03

BRIC economies 4.99
0 1 2 3 4 5 6 7
Mean score
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