The importance of Data Governance

Data describes the facts and figures that a company processes, it only becomes valuable information after it has been processed to add relevance. Data governance is the overall management of information available, it provides context for using the correct data, defines policies and standards for the proper use of data, and ensures that data management is aligned to the strategy of the entity concerned. It is important to develop a policy that specifies who is accountable for the various portions of data within a business and how accurate it is. A set standard and procedure must be followed, so as to ensure ongoing compliance with governance regulations.

Previously, data was managed solely by technologists. However, business intelligence is fast advancing, key decision makers are now required to have sufficient and accurate business data to make logical and profitable decisions. The interpretation of business assets, liabilities and equity is key information to a prolific business. A Data Governance programme is designed to shape the corporate philosophy of data acquisition, management and archiving. Business advances now require both business and IT components of the business to syndicate in order to define data elements. New data-orientated business functions and roles will emerge, and this should present accountants with a good opportunity, as they are well placed to fulfill some of these functions and roles.

Read more  http://bit.ly/2q9WO9e

 

Taking care of the future CFO

Every finance leader knows predicting the future of finance is not an exact science. What is certain though is the speed of change and how this change is altering expectations on what the future CFO may look like. There is an incredible value, as a CFO, in understanding what the finance sector may look like, but the greater value is in knowing what future skills to garner.

This type of insight will further help re-shape educational institutes and curriculum ensuring today’s students can be tomorrow’s leaders. The Association of Chartered Certified Accountants (ACCA), recently released a future gazing in-depth report on the future of finance titled; Professional Accountants – the future. This report synthesises the results of this qualitative and quantitative global and national research. The report deals with two main elements; firstly the drivers of change that will have the most impact, and secondly the future skills required of professional accountants to respond to those changes. Outlining these possible future outcomes, pitfalls, skills requirements ensures that as a world leading association, ACCA is driving educational changes in order to build a better finance sector.

EDUCATION EMPOWERMENT THROUGH COMPETITIVENESS

One of the platforms ACCA has chosen to drive change is through education empowerment. This alignment with some of the top education institutes in Africa will ensure success for future finance leaders. Such an alignment is the CFO Case Study Competition – an international, annual multi-round business management competition, hosted by Charter Quest. It challenges young people who aspire to be top CFOs and/or Global Business Leaders to demonstrate their potential by competing to solve a set of real-life complex finance, managerial and strategic problems that beset a “hypothetical” African company. As an endorser of this event, ACCA is passionate about ensuring its future members are well armed with educational and experience tools to navigate successfully through their journey as future leaders.

ACCA seeks to bring added value to the evolving finance role in a number of ways, namely, through engagement with employers and aligning our qualification to complement strategic business acumen. “ Patience Semenya, Head: ACCA South Africa

The CFO Case Study Competition is currently in its second round – the public voting stage – where the public has the opportunity to vote for the best videos submitted by the top 6 teams.

The semi-finals and finals will be held on the 13th and 14th of October respectively. The team finalists will be asset by the following criteria’s:

  • Finance & Technical
  • Diversity & Business
  • Ethics & People
  • Presentation, Question & Answers
  • Decisiveness & Leadership
  • Innovation & Integration

To view more details on the competition visit: http://bit.ly/1SWgm4O

Learnings from investigating financial statement fraud

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This article comments not only on what has happened in corporate failures elsewhere in the world but also accurately describes the circumstances of many corporate failures in South Africa.

Although little has been recorded of the fraudulent activity that contributed to or resulted in the corporate failures in South Africa, KPMG had the opportunity to be involved in a number of those investigations to a larger or lesser extent.

Although greed, ambitious corporate growth, excessive interest in maintaining stock prices, stock market expectations and weak independent directors and audit committees, were definitely a common theme, these were not the only reasons that contributed to the frauds.

Another aspect that has always come up during these investigations into corporate failures and extensive financial statement fraud is the role the financial manager played in assisting management in concealing the true nature of the fraudulent activity going on. In many of these instances, the financial manager was not even directly benefiting from the fraudulent activity. However, their evasiveness during the audit or inability to answer probing questions, even during the forensic investigations, have made it impossible or very difficult to uncover the full extent of the financial statement frauds. The response of these financial managers differ from case-to-case, but trends that emerged were the following:

  • Pride in their ability to record the transaction in such a manner that the auditors did not pick it up
  • A belief that as long as they did not answer the auditor’s question, but referred him/her to management, they were not party to the fraud or the cover up
  • A belief that they are not to question their boss and therefore have to do what he/she says they should do
  • Rationalisation of their conduct and role in the transaction, to the extent that the financial managers do not believe that they did anything wrong.
  • Only recently, in a matter ongoing now since 1999, did the financial manager finally accept that although he may have an accounting explanation for the transactions he processed, legally, he is unable to substantiate the transactions. This distinction, in the mind of the financial manager, is something that can be definitely noted in future investigations to come.

Only recently, in a matter ongoing now since 1999, did the financial manager finally accept that although he may have an accounting explanation for the transactions he processed, legally, he is unable to substantiate the transactions. This distinction, in the mind of the financial manager, is something that can be definitely noted in future investigations to come.

This article was taken from KMPG’s South African blog, to visit the blog click here 

Generation Y Changes Finance Stereotypes

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If change is inevitable, then the ability to adapt to it is paramount. Gen Y is suited up and ready to enter the office to take up their roles as finance professionals. But what should be expected by corporates as they set up a platform for this generation.

The image that comes to mind when the words ‘finance professional’ are mention is of a strict gentleman or woman in a black suit that smells of strong black coffee with shiny black shoes. The walls of their offices are decorated with certificates that attest to the achievements of the professional. A thinker that loves silence, meetings and charts that outline plans spanning 20 years. Generation Y brings a different image though. The ACCA report titled Generation Y: Realising the potential, highlights the fact that the pool of talent for HR personnel has changed, Gen Y forms the majority of the talent and HR personnel and CFOs cannot use the same barometer to gauge the potential of this new generation.

The ‘selfie’ generation has a different outlook on life and they require that this outlook be married to all their activities including their work life. Barrie Bramley, Curious Disruptor at Calidascope, points out that unlike baby boomers, this generation place value in freedom. This can be seen in their attachment to their mobile devices like laptops, smartphones and tablets. They do not believe that they should be in the office to do their work, they believe that technology allows them to work from anywhere at any time. “It is not uncommon for this Gen Y to ask their managers for flexible business hours, or to go work on a project outside the office”, said Bramley. “It is managers that will be willing to negotiate such terms with this cohort that will get the best out of this generation”.

Gen Y does not put much value on titles, they believe in adding value. “In this age when you know enough, you are qualified enough”, said Bramley, “this generation is very informed and they have a peculiar ability to absorb information that serves them well in business. They are also colourful, they are loud and believe that this should work together in expressing themselves in their roles at work. In her book, Knowing Y: Engage the Next Generation Now, marketing and media expert Sarah Sladek lists 5 motivations that drive this generation and make them so different from the previous generations:

  • 92 percent believe that business success should be measured by more than salary
  • 80 percent prefer on-the-spot recognition over formal reviews
  • 61 percent feel personally responsible to make a difference in the world
  • 50 percent want to start their own business, or have already done so
  • 2 years is their average employment tenure

Bramley suggests that there is a shift in wisdom in the corporate world, that while Baby Boomers were able to take us to where we are now, Gen Y will be able help reach greater heights. “This is the case of ‘two rights’ that need to be amalgamated, it is not that Baby Boomers were doing it wrong, and it is not that Gen Y is juvenile and should silence their voices”, commented Bramley on the different approaches to business Gen Y and Baby Boomers have in the office.

It is HR managers and CFOs that can be willing to invest in knowing the motivations of this generation that most benefit from it. Personnel is the business’ most valuable asset, the right candidate will do wonders for the business’ bottom-line.

The Role of Fraud in the Economy

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According to various reports, fraud is South Africa’s number one economic crime and considering that fraud accounts for 7% of company revenue worldwide, any further increases in this figure could prove detrimental to an organisation in these difficult economic times. In South Africa alone, it is estimated that fraud costs the economy in excess of R2 billion a year. There are a number of reasons why people fall victim to the pressures of fraud. In the economic state that we find ourselves in there is scarcity of jobs and this has resulted in people using unethical methods for financial gain. On the other hand, in an attempt to reduce costs, companies usually resort to measures like retrenching staff (which may affect the segregation of duties doctrine), reduced training, abandoning cheques and balances which may be in place, or cutting back on internal audits, amongst various other things. In such conditions, an organisation is susceptible to fraudulent behaviour from its employees both internally, as well as externally in transactions binding the firm. Ever since the 2008 downturn the relationship between the finance industry and consumers has changed. According to an ACCA report titled Culture vs regulation: what is needed to improve ethics in finance, “the crisis shattered the public’s trust in the banking system and as the examination of financial institutions continues the relationship between the bank and the public continues to deteriorate as ever more scandals are announced”. A number of policies have been drafted to aid this situation, but policies and regulations can only go so far. Regulations and policies alone will not be able to combat fraud in business. Regulation failed to prevent the 2008 crisis; risk was constantly discounted. In some instances it was considered non-existent. Technological developments and complex products can be created rapidly, which means that the regulator will always be playing “catch-up”. So maybe in highlighting the impacts of fraud on the economy and how these affect each of us directly there might be some improvements that emerge. Below are some of the impacts of fraud on the country:

  • Corrupt activity hinders development
  • Contributes to the depletion of the public purse and distorts markets
  • Hinders local and foreign direct investment.

Countless studies around the world show how corruption can interrupt investment, restrict trade, reduce economic growth and distort the facts and figures associated with government expenditure. But the most alarming studies are the ones directly linking corruption in certain countries to increasing levels of poverty and income inequality. The issue of ethics comes to play, and these are determined by the culture of an organisation. The ACCA report looks at the culture of tolerance in an organisation, for instance, is profit valued more than the means. Does an organisation promote a culture of high risk overlooking regulations and policies? It is important that business managers realise that these “insignificant” hints lay foundations to bad or good behaviour. Over-reliance on regulators has been found wanting in days of old when dealing with fraud and corruption, it is therefore important that business managers understand that the most power lies in the culture of the organisation and they have the most influence on this than external regulators.

Entrepreneurial Activity in Africa: Mentorship

As South Africa celebrates youth month, it is only relevant to look at the development of these “future leaders”. Entrepreneurship has had positive results for countries that found themselves in negative economic rubble, it was through the encouragement of this spirit that most of them emerged from this. The same medicine has been prescribed for the African continent, our country has erected the Small Business Ministry with this in mind. But what can the corporate world do to offer the correct resources to bring us to our desired end?

“Never have I seen further than when I stood on the shoulders of giants”, this old-age adage takes form in Ashish J Thakkar’s words (the founder of Mara Group and Mara Foundation) when commenting on the African youth’s activity in entrepreneurship, “I frequently meet with entrepreneurs all over Africa, and my first question is always, “Look, what can I do for you?” They never tell me that money is their primary need—what they are really looking for is guidance. Many young African entrepreneurs are the children of civil servants or farmers. They don’t come from business backgrounds, so where can they turn for advice?”

Although the lack of funds and limited education are often noted as barriers by the youth looking to venture into entrepreneurship, it seems that mentorship and guidance are demanded more. But how should CFOs and business managers approach mentorship?

www.chronus.com offer the following steps as a guideline to setting up a mentoring programme:

  • Design Your Mentoring Program

The starting point for any mentoring program begins with two important questions:

  • Why are you starting this program?
  • What does success look like for participants and the organization?

To answer these questions you will need to dive deep to understand your target audience. Make sure you understand who they are, where they are, their development needs, and their key motivations to participate. Translate your vision into SMART objectives: specific, measurable, attainable, relevant and time-bound

  • Attract Participants for Your Mentoring Program

The best designed mentoring programs won’t get far without effective program promotion, mentor recruitment, and training.

When new mentoring programs are introduced in organizations, there is generally natural enthusiasm. Yet this enthusiasm doesn’t always translate into high participation rates. A common reason is the absence of effective promotion. Don’t assume potential mentors and mentees understand the benefits. For many, this will be their first opportunity to participate in mentoring. You will need to convince them that participating is worth their time and effort.

  • Connect Mentors and Mentees

A productive mentoring relationship depends on a good match.

Matching is often one of the most challenging aspects of a program. Participants will bring various competencies, backgrounds, learning styles and needs. A great match for one person may be a bad match for another.

Matching starts by deciding which type of matching you’ll offer in your program: self-matching or admin-matching. Consider giving mentees a say in the matching process by allowing them to select a particular mentor or submit their top three choices. Self-matching is administrative light, which in larger programs can be a huge plus.

  • Guide Mentoring Relationships

Now that your participants are enrolled, trained, and matched, the real action begins.

It is also where mentoring can get stuck. Left to themselves, many mentorships will take off and thrive. But some may not. Why? Because mentoring is not typically part of one’s daily routine. Without direction and a plan, the mentoring relationship is vulnerable to losing focus and momentum. That is why providing some structure and guidance throughout the mentorship is vital to a successful mentoring program

  • Measure Your Mentoring Program

Understanding how your program measures up to expectations may well be the most important phase of all.

Mentoring programs should be tracked, measured, and assessed at three altitudes: the program, the mentoring connection, and the individual. To be effective you need the ability to capture metrics and feedback throughout the program lifecycle.

Companies that set-up mentorship programmes will reap a myriad of rewards, one of them is that they are guaranteed that skills are trickled down to new personnel and this will ensure the retention of proper skills in the company. The second benefit that relates to entrepreneurship is that more youth will have the opportunity to impact positively the economy of the country.

Employees’ Personal Projects

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In our previous blog posting we discussed crowdfunding as a way CFOs and team leaders can use to finance employee projects. Crowdfunding is a web-based funding platform that allows project owners to showcase their projects and raise small amounts of money from a pool of prospective investors. But should CFOs and companies allow employees to engage in personal projects?

A business’s most valuable asset is no doubt its personnel, so it is important that the most investment is made in these. Managers everywhere are always coming up with ways to get the best out of their employees. In the current age, mutualism seems to be the way to go if any company desires to meet its objectives. The daily routine can be draining overtime for employees and some can be left feeling burnt out. So it is very important for managers to lookout for ways to keep their employees motivated.

Encouraging employees to take part in personal projects is a great way to help them stay motivated. More and more companies are allowing employees to chase their own dreams. Apple Inc. recently launch a program called Blue Sky where employees can use their time off work to engage in projects that are close to their hearts. The initiative gives some employees 2 weeks out of their normal work schedule to work on special projects.

Google has long offered a version of this called ‘20% time’ which allows workers to devote 20% of their work time to their own projects or hacks. Many of those have turned into full-on products like YouTube for Good.

It is only natural for some form of resistance to emerge from business managers in adapting such systems. Many fear that they might lose good employees should these personal projects become successful. But those that have been running with this systems have a different thinking. “Promoting intrapreneurship, or entrepreneurship within a company, keeps ambitious employees happy”, says Matt Britton, the founder and CEO of MRY, which has close to 500 staff members. “And for employees who like the security of working for a larger corporation, giving them the opportunity to venture outside of the routine of their day-to-day activities to experiment with entrepreneurship is a talent draw and keeps the company as a whole competitive and hungry”.

Konstantinos Konstantinides says that there two types of projects employees can engage in:

Work related: These are projects you think your employer should be doing, but does not. So, you need to prove a proof of concept, do a small prototype, etc., so you can prove to management that these are projects worth pursuing.

Non-work related: A new start-up or invention.

While this trend has boomed in more developed countries like the USA and UK, it might take a little longer for it to find fame in South Africa. It is only after CFOs and managers are exposed to its benefits that their reservations will thaw. However long it will take though, this is an innovative way to keep employees motivated. For CFOs and team leaders that wish to expand their knowledge on the subject of crowdfunding or peer-to-peer finance, ACCA has released a report that goes deeper into the subject called Technical Factsheet 186 Alternative forms of finance