The function of the comptroller has continuously evolved over the past 20 old ages. Likewise the challenges faced by the profession have evolved and go on to. This is in portion to a great extent influenced by the altering demands and outlooks of investors and other stakeholders sing corporate administration issues ( Starks 2009 ) .
Changing function and challenges
Information engineering and accounting package such as Quickbooks has made the comptroller ‘s occupation simpler as it can collate informations and make fiscal statements. Accountants spend less clip making statements but have more clip to pass analyzing them particularly with the outgrowth of Enterprise Resource Planning systems ( ERP ) ( O’Mahony and Doran 2008 ) . Accountants have become more of fiscal advisers than merely being stuck in a closed office with reckoners. The other side of this nevertheless is that the function of comptrollers as figure crunchers has been taken over by the IT and this has resulted in the comptroller ‘s function evolving. The cyberspace has besides resulted in accounting package being widely available and accessible. As such one does n’t needfully necessitate an accounting background in order to fix fiscal statements and execute a casual analysis of the information. The handiness of such information has resulted in the function of fiscal comptrollers being slightly eroded. Harmonizing to a survey commissioned by the American Institute of Certified Public Accountants ( AICPA ) cited by Kirby and Romine 2010, “ the mean cost of the finance map has dropped from 2.2 per centum of grosss in 1988 to 1.4 per centum of grosss in 1996. ” At my administration for illustration, the bookkeeper station has been removed from the paysheet after geting accounting package that could execute the same undertakings, cheaper and quicker ; the administrative helper with no formal accounting preparation handles this duty.
As direction accountants go more of concern spouses and non merely dealing processors and conformity directors ( Bhattachrya 2009 ) , demands from them now go beyond roll uping informations and collating it and bring forthing fiscal statements. The comptroller ‘s function has become more concerned with heightening the fight of the administration and driving organizational success by understanding and right construing fiscal information. It has become incumbent upon them to widen their accomplishments base to include tendency analysis and understanding both non-financial and fiscal indexs. Kirby and Romine 2010 and Bhattacharya 2009 insist that direction comptrollers have become more of strategic advisers and spouses and execute more sophisticated analysis and determination support services in an administration and have therefore evolved from being at the lower terminal of the information hierarchy within an administration to the higher terminal, which makes them portion of a more indispensable concern map.
Kirby and Romine ( 2010 ) intent that in fiscal accounting, “ cost direction continues to turn in importance ” through activities such as ABC, mark costing, value concatenation analysis, life rhythm bing taking centre phase. Fiscal comptrollers hence require more in-depth cognition of an administration ‘s scheme, production and service bringing system in order to manage countries where resources are non being good managed and costs are inexcusably high. Other activities such as Cost Volume Net income Analysis and Activity Based Management are besides falling within the portfolios of Management and Financial comptrollers. Accordingly direction and fiscal comptrollers are positioning themselves as information specializers and functioning as alteration agents ( Kirby and Romine 2010 ) .
Harmonizing to Starks ( 2009 ) investors should care more about hazard factors such as regulative hazard, supply concatenation hazard, merchandise & A ; engineering hazard, judicial proceeding hazard, reputational hazard, and physical hazard and how these affect their investings. This may good be a underdeveloped tendency and comptrollers will hence be challenged to beef up their hazard direction accomplishments in order to expect and extenuate such hazards.
Accounting dirts such as the Enron and Worldcom fiascos have resulted in stricter accounting guidelines and changeless regulative alterations to seek and restrict unethical accounting patterns every bit good as protect investor involvements for illustration alterations in voting policies on common financess instituted by the Securities and Equities Commission ( Starks 2009 ) . In add-on, the accounting profession suffered a deficiency of trust and answerability. As such transparence and trust have become cardinal factors in what investors and stakeholders expect every bit good as the quality and dependability of the accounting information produced. Furthermore investors and other stakeholders are demanding more comprehensive information every bit good as increased revelation and are more likely to size up company information and operations. Starks ( 2009 ) asserts that investors care about corporate administration issues such as transparence and operations direction because these affect a house ‘s value. Investors are speedy to walk off if there is lost trust and the accounting house ‘s name is in bend tarnished. Accounting patterns now reflect on the full administration every bit good as the profession.
Globalisation, which has caused increased flow of financess across international boundary lines has resulted in the demand for comparison and standardization of accounting patterns, systems and criterions ( Kolk et al 2009 ) . However the outgrowth of IT has besides brought approximately legion package versions and systems. Differences between systems and versions can be rather complex and different information assemblage techniques used by different companies further complicate comparison of fiscal information across concerns.
The cyberspace and IT has besides resulted in information overload ( Vecchio 2006 ) . Management comptrollers hence have to construe, study and analyse information that affects concern operations and fiscal standing of an administration from many different beginnings in a succinct and apprehensible mode which can be rather ambitious.
The planetary economic system is going more service oriented. This in bend is increasing intangible assets to be accounted for eg human capital, rational belongings, trade name value etc. Harmonizing to Starks ( 2009 ) “ trade names and company repute present greater troubles, … cardinal human capital assets including employee competency, experience and expertness, leading accomplishments, capacity for ingeniousness, or structural capital assets such as organizational civilization, cognition webs and direction sequence programmes, ” which are all important to concern success but are non clearly reflected in fiscal statements. Human Capital Accounting and ways of accounting for intangible assets are hence taking centre phase in the accounting profession ( Chen and Lin 2004 ) .
In visible radiation of altering and germinating accounting functions, Kirby and Romine ( 2010 ) study that AICPA has established a Centre to assist comptrollers in concern and industry to fix for the hereafter because “ comptrollers who view their occupations as historical information gatherers and newsmans of fiscal information may happen themselves victims of organizational re-engineering and restructuring. ”
