Contemporary Business Issues
Module 1: Future Accounting Skills
Part A: A Strategic Adviser and Decision Partner
1.1: Drivers of Change (p.4)
1. Technology-enabled innovation
2. Innovative business and finance models
3. Transforming workforce
4. Natural resource management
5. Stakeholder management
1.2: The Accountant as Strategic Adviser (p.7):
Accountants will continue to be information providers, but their most valued skills are likely
to be insights, options and decisions derived from that information.
Key requirements for accountants include:
become a long-term partner in the strategic management of the business
understand that the purpose of looking at the past and present is to predict and
shape the future
communicate clearly
can access expertise from a network of contacts
respond in real time
Developing the skills of an adviser:
Going forward, a successful accountant need understanding and skills beyond their
specialisation, as they are frequently required to collaborate across the organisation and to
communicate with other specialists.
To provide strategic advice, accountants need a range of business, behavioural and
leadership skills, including business acumen, the ability to communicate, influence and
negotiate, and the ability to help shape organisational culture.
2 key expectations are that professional accountants:
Make the right decisions about the services that they perform
Deliver services with professional competence and due care.
Providing and Implementing Advice:
, Organisations may also require advice on issues such as business efficiency and productivity
(through business process redesign), management information systems (for improved
reporting and decision making), as well as risk management and internal controls (including
fraud analysis and prevention).
At a strategic level, advice is also required on selecting appropriate growth strategies (based
on acquisition or on organic, internally generated growth), identifying new products and
markets, and establishing a market position
The ability to identify key stakeholders, determine their position and develop a plan to
engage actively with these stakeholders is essential in turning advice into successful action
1.3: Transforming the Client Relationship (p.13)
The reality is that the accountant or firm needs to build up their client base — through sales
and marketing.
To expand the service offering, accountants need to be able to communicate the new
services that they can provide, explain why these services are useful to the client, and
demonstrate that the pricing is appropriate.
Marketing skills and non-billable time building client relationships become essential, and
these skills need to be developed and refined
Understanding what SME clients want
, The opportunities to add value through advice are not only beneficial to clients, but also to
the provider, offering more interesting engagements and the ability to earn greater returns.
Traditionally, accountants have billed based on the time it takes to do something, rather
than on the value of the answers or advice provided.
Clients, however, are only interested in the value of the information and advice their
accountants provide in terms of helping the business succeed (E.g. Value based billing)
Aligning Strategic Advice to Client Behaviour:
Strategic advice should, however, have the longer-term objectives of the organisation in
mind, while focusing on the various steps and initiatives that are required to achieve those
objectives.
An accountant can add value by evaluating the financial consequences and strategic
outcomes of capital investments.
Supporting Entrepreneurial Activity
The purpose of entrepreneurial activity is to generate new ways of doing things, which can
include starting up a new business venture, changing how a product is produced or sold, and
creating new services for customers
This requires a very different type of support from accountants, with less focus on control
and more focus on the successful implementation of new ideas and change
Turning Advice into Results
The recommendations contained in the advice need to be properly executed and deliver
results (E.g. Cash flow collection)
1.4: The Future Finance Function (p.20)
To ensure the investment in data and analytics leads to better-informed decisions, company
accountants need to help align the analytics work with the company’s business priorities.
The Future-Focused Company Accountant’s Skills
The accountant as an internal employee provides a huge range of advisory roles from
creating strategy to costing analysis and restructuring, and from new product development
to pricing and revenue models for mature products.
, Part B: Business Skills (p.25)
1.5: Customer Focus (p.25)
Business acumen: The ability to understand how a firm works and how to make it work
effectively to achieve the business’s goals
For accountants, customers include:
Clients
Others within the firm that rely on information and advice from the Finance team
The firm’s customers
Customer Focus: Every aspect of the business’s operations considers its role in providing
customer satisfaction and the business culture supports this
Steps to understand customer’s needs and embed that focus into the culture and action of
the accountant’s work:
1. Work with the client to create a service plan
2. Meet with clients regularly to discuss what services or products the client wants
changed, improved, removed or added
3. Set up a formal feedback mechanism to measure client satisfaction
4. Continue to develop your skills and network with other professionals to enable you
to collaborate with experts and specialists outside the profession
1.6: Business Planning (p.26)
A business plan is a comprehensive written document that explains and analyses a business
and its entire operations by explaining its goals, how it will operate and the likely outcomes
of the business
It allows management and employees of the firm to work towards a set of clearly defined
goals, thus enhancing the likelihood of the goals being reached and allows the business to
take the initiative, rather than just reacting to events that occur in the outside environment.
An effective plan demarcates responsibilities — spelling out the roles of key personnel; it
also helps clarify job expectations and improves the accountability of staff to the owner–
manager.
, There is a significant positive correlation between business planning and business success,
but it is important to ensure the business plan is reviewed regularly to integrate the
changing environment in which the business operates.
The Accountant’s Input to the Business Plan (p.27):
Financial Projections:
The formal financial content of the business plan will include financial documents, forecasts
and analyses, background notes, and other information that help decision makers make
sense of the financial forecasts.
Basic Assumptions and Information:
The accountant will need to explain the assumptions made in estimating income and
expenses and in calculating the various figures and any unusual items, significant omissions
or unusual variations in the figures need to be justified.
It may be useful to provide details about the bank accounts that the business operates —
what financial institution they are with, what type of accounts are they (savings, cheque or
cash management), and what fees are charged.
The accountant should also provide an assessment of how well the financial institution’s
facilities meet the business’s needs
If money is to be borrowed, information should be provided about the proposed lender,
total amount sought, date required, monthly repayments due, interest rate, loan conditions
and term of the loan.
Financial Forecasts:
The required financial forecasts include the following.
Sales mix forecast
Cash flow forecast.
Projected profit and loss statement
Balance sheet reports
Personal expenses, assets and liabilities
Using the above data, one may perform ratio analysis including break-even point, fixed and
variable costs, contribution margins, mark-ups and margins, projected impact upon the
value of the business and ROI impacts
Beyond the Financial Projections:
, If properly done, preparation of a business plan will foster skill development during the
process of balanced and objective data collection, systematic analysis of the positive and
negative results revealed by the research, and the development of a comprehensive
business response strategy that integrates all activities of the proposed venture with its
internal and external environment.
1.7: Performance Measurement (p.30):
Organisational performance measurement includes developing goals to support the
achievement of the entity’s mission, transforming those goals into strategies and then
measuring performance.
The performance evaluation of the efficiency and effectiveness of the entity’s strategies,
structures and processes is integral to the achievement of the entity’s mission and provides
feedback for future action.
Performance measurement systems could include measures to evaluate the performance of
the entity, organisational divisions or segments, individual managers and employees,
customers, products or services, environmental and social performance, suppliers, or
processes
The Integrated Report:
The emphasis of the integrated report is on communicating the entity’s value creation over
time by communicating relevant organisations of financial, environmental and social, risk,
and governance items
Reporting on the integrating aspects of financial capital, manufacturing capital, intellectual
capital, human capital, natural capital, social capital and relationship capital will help
management assess the value created by the organisation and the trade-offs made
1.8: Regulatory Environment (p.31)
The contemporary regulatory environment is a formidable challenge arising from:
Different regulatory regimes when operating or transacting across national borders
A lack of clarity or stability around regulation of emerging business models and
technologies such as the sharing economy and cryptocurrency
The evolution of standardisation across national boundaries
Changing regulatory environments as governments try to keep up with rapidly
changing technology, business models and an increasingly globalised economy.
For a business to be across all the relevant regulations and laws, and how to respond to
them, will likely require more than one specialist but accountants are well-placed to provide
advice on several areas, including, record-keeping requirements, tax rules and reporting
requirements
One of the biggest challenges is being prepared for possible regulatory changes and how
they might impact on the business which should be an element of the business’s risk
management approach
1.9: Project Management (p.33)
Organisations perform work through operations and projects:
Operations involve ongoing, relatively routine work, such as preparing tax returns or
helping a client establish accounts.
, Projects are one-off efforts to achieve specific goals, such as moving a business’s
accounting platform from company servers to a cloud-based provider.
Project management is planning, organising and controlling the activities of human
resources to achieve a specific project to a predetermined schedule and budget.
Many organisations have become more project-based, and management accountants are
likely to find themselves frequently working on projects (E.g. Achieving compliance with new
regulations, applying new technology, and undertaking a business acquisition)
Project Methodologies (p.34):
Traditional Project Management:
A project charter should be created at the start of each project identifying the objectives of
the project and forms a contract between the project team and the rest of the organisation.
Prince2:
PRINCE2 is a project management methodology based on dividing projects into substages to
help better manage and control aspects of the project.
To keep each factor within the established tolerance level, PRINCE2 imposes 7 principles on
the project management approach
1. The business case for the project must be revised at each stage and the project should
only continue while the business case remains.
2. The experiences of the project team and other projects teams are recorded and studied
to ensure the project team and future projects learn from previous experience.
3. Roles and responsibilities are defined separately from the individuals in the project
team.
4. The project is broken into stages to facilitate management and control.
5. Variations outside the established tolerances are escalated to higher levels of
management.
6. The project focuses on the quality of the product delivered.
7. The method is customised to the needs of the individual project
,An Agile Approach (p.35):
Traditional project management follows a waterfall approach which has many advantages,
including comprehensive planning and effective use of resources but it is not suitable for all
projects as some of them require greater flexibility
An agile approach de-emphasises methodology and instead emphasises flexibility,
particularly the ability to adapt to change with the focus squarely on the product, and risk
management and levels of governance are secondary.
Downsides to agile projects include that they require a relatively open timeline and
unrestricted budget and because the project’s goals and needs are constantly adjusted, it is
not possible to fully establish resource needs ahead of implementation
The PRINCE2 Agile-to-accommodate agile approach enables risk management and formal
decision making to be applied over the top of an agile project approach
Project Management Tools (p.36):
Gantt charts: These provide a linear representation of the timing of each task in a project
Critical Path Method (CPM): This method identifies interdependencies between tasks to
determine which tasks can be done in parallel and which will require the completion of
other tasks first
Project evaluation and review technique (PERT): This is a tool that identifies the tasks,
durations and dependencies in a project, but also builds in uncertainties and contingencies.
A work breakdown structure which breaks the project into elemental tasks, is particularly
useful for project accounting as it enables costs and risks to be attached to each aspect of
the project which can then be monitored to ensure the project resources are being used
efficiently and are adding value
1.10: Other Business Skills (p.36)
Leveraging Technology (p.36):
To make utilise opportunities and manage the threats provided by technological
developments, firms will need to acquire people with new skills, like data technologists.
Risk Management (p.36)
Risk management is the ongoing process of identifying and evaluating the likelihood of
potential adverse events, and the development of plans to reduce, transfer, avoid or accept
the effects of these events.
Risk identification produces a comprehensive list of financial, operational, strategic and
compliance risks which are then prioritised by performing a risk assessment.
Once risks are assessed, a risk response plan is prepared, including contingency plans that
identify the actions to take should a risk eventuate.
Sustainable Business Development (p.39)
Sustainability is the use of resources in a way that satisfies society’s current needs without
compromising the ability of future generations to meet their needs
Perhaps the biggest challenge in achieving sustainability is that while many organisations are
increasingly engaged with the concept, those same organisations are fundamentally built
around more traditional conceptions of economic growth.
Part C: Behavioural Skills (p.42)
,1.11: Future Focus (p.42):
A future focused accountant must understand how they contribute to the business’s overall
strategy and appreciate that this will constantly change, due to external factors, internal
factors and the decisions of the accountant themselves.
Adaptive Mindset (p.42):
An adaptive mindset refers to a state of mind that welcomes opportunities to improve and
responds well to change and feedback.
Reflective Practice (p.43):
Reflective practice is when a person to actively reflect on experiences to learn and improve
(E.g. Seeking feedback, analysing experiences and planning behaviour)
A person’s professional development occurs through a mix of formal education and
professional development activities that provide structured learning opportunities and
reflective practice, which is a behavioural trait that facilitates learning that occurs outside
formal education.
1.12: Problem Solving and Decision Making (p.44)
Accountants should take every opportunity to develop their critical and creative thinking to
support their problem-solving abilities.
Information (p.44):
One of the most critical steps in problem solving is to ensure the problem itself has been
properly identified and then information must be gathered
Ideas (p.46):
Some problems in business are relatively routine and will occur again and again, and they
have well-tested solutions or responses called programmed decisions.
Strategic decision makers, however, are almost always focused on complex problems
situated in varying degrees of uncertainty and risk, and these problems require unique
responses through a combination of critical and creative thinking.
, Critical and Creative Thinking:
Critical thinking involves evaluating which information is relevant, questioning information
where required, interpreting information and formulating a recommendation or decision
based on logic without bias
Creative thinking involves generating new ideas, thinking about something from a new
perspective and making new connections between ideas.
Innovative thinking is a closely related concept that goes beyond idea generation to also
address issues of implementation.
Solutions (p.47):
Once possible courses of action have been developed, decision makers need to assess the
relative pros and cons associated with each and how to implement it.
1.13: Communication (p.48):
Communication is central to all personal and professional relationships and is used to
inform, instruct, persuade, exert influence, change behaviour, interact, build rapport and
affinity and includes interpersonal and group communication
A Model for Understanding Communication (p.48):
The creator is the person who wishes to communicate a business message which will be
created for the purpose of instructing or directing the activities of staff or suppliers,
providing information to staff, management, customers or shareholders, or requesting
information from them, or promoting products or services to the market.
To effectively communicate a message, the creator needs to encode the message (E.g.
Choosing language, graphics, tone, location, colours etc) and choose an appropriate channel
or medium (E.g. Email, poster, letter, online etc)
The consumer is the intended recipient of a message and to receive a message, they must
interpret the meaning of its contents which is dependent on their perspective as well as
their relationship and opinion of the creator.
The model also identifies noise, which is anything that can interfere with the intended
message, ranging from a poor phone connection to the cultural context
Power distance: These are differences in the organisational or social status of the sender and
receiver and the nature of the relationship between them
Communicating with Clients and Colleagues (p.51):
As a future-focused accountant, you will collaborate with your clients, seek feedback,
nurture interaction and respond to questions in an easy to understand manner
The overarching aim is to make people feel comfortable so that they will ask questions,
understand and act on your messages (E.g. Avoid technical terms and jargon)
Module 1: Future Accounting Skills
Part A: A Strategic Adviser and Decision Partner
1.1: Drivers of Change (p.4)
1. Technology-enabled innovation
2. Innovative business and finance models
3. Transforming workforce
4. Natural resource management
5. Stakeholder management
1.2: The Accountant as Strategic Adviser (p.7):
Accountants will continue to be information providers, but their most valued skills are likely
to be insights, options and decisions derived from that information.
Key requirements for accountants include:
become a long-term partner in the strategic management of the business
understand that the purpose of looking at the past and present is to predict and
shape the future
communicate clearly
can access expertise from a network of contacts
respond in real time
Developing the skills of an adviser:
Going forward, a successful accountant need understanding and skills beyond their
specialisation, as they are frequently required to collaborate across the organisation and to
communicate with other specialists.
To provide strategic advice, accountants need a range of business, behavioural and
leadership skills, including business acumen, the ability to communicate, influence and
negotiate, and the ability to help shape organisational culture.
2 key expectations are that professional accountants:
Make the right decisions about the services that they perform
Deliver services with professional competence and due care.
Providing and Implementing Advice:
, Organisations may also require advice on issues such as business efficiency and productivity
(through business process redesign), management information systems (for improved
reporting and decision making), as well as risk management and internal controls (including
fraud analysis and prevention).
At a strategic level, advice is also required on selecting appropriate growth strategies (based
on acquisition or on organic, internally generated growth), identifying new products and
markets, and establishing a market position
The ability to identify key stakeholders, determine their position and develop a plan to
engage actively with these stakeholders is essential in turning advice into successful action
1.3: Transforming the Client Relationship (p.13)
The reality is that the accountant or firm needs to build up their client base — through sales
and marketing.
To expand the service offering, accountants need to be able to communicate the new
services that they can provide, explain why these services are useful to the client, and
demonstrate that the pricing is appropriate.
Marketing skills and non-billable time building client relationships become essential, and
these skills need to be developed and refined
Understanding what SME clients want
, The opportunities to add value through advice are not only beneficial to clients, but also to
the provider, offering more interesting engagements and the ability to earn greater returns.
Traditionally, accountants have billed based on the time it takes to do something, rather
than on the value of the answers or advice provided.
Clients, however, are only interested in the value of the information and advice their
accountants provide in terms of helping the business succeed (E.g. Value based billing)
Aligning Strategic Advice to Client Behaviour:
Strategic advice should, however, have the longer-term objectives of the organisation in
mind, while focusing on the various steps and initiatives that are required to achieve those
objectives.
An accountant can add value by evaluating the financial consequences and strategic
outcomes of capital investments.
Supporting Entrepreneurial Activity
The purpose of entrepreneurial activity is to generate new ways of doing things, which can
include starting up a new business venture, changing how a product is produced or sold, and
creating new services for customers
This requires a very different type of support from accountants, with less focus on control
and more focus on the successful implementation of new ideas and change
Turning Advice into Results
The recommendations contained in the advice need to be properly executed and deliver
results (E.g. Cash flow collection)
1.4: The Future Finance Function (p.20)
To ensure the investment in data and analytics leads to better-informed decisions, company
accountants need to help align the analytics work with the company’s business priorities.
The Future-Focused Company Accountant’s Skills
The accountant as an internal employee provides a huge range of advisory roles from
creating strategy to costing analysis and restructuring, and from new product development
to pricing and revenue models for mature products.
, Part B: Business Skills (p.25)
1.5: Customer Focus (p.25)
Business acumen: The ability to understand how a firm works and how to make it work
effectively to achieve the business’s goals
For accountants, customers include:
Clients
Others within the firm that rely on information and advice from the Finance team
The firm’s customers
Customer Focus: Every aspect of the business’s operations considers its role in providing
customer satisfaction and the business culture supports this
Steps to understand customer’s needs and embed that focus into the culture and action of
the accountant’s work:
1. Work with the client to create a service plan
2. Meet with clients regularly to discuss what services or products the client wants
changed, improved, removed or added
3. Set up a formal feedback mechanism to measure client satisfaction
4. Continue to develop your skills and network with other professionals to enable you
to collaborate with experts and specialists outside the profession
1.6: Business Planning (p.26)
A business plan is a comprehensive written document that explains and analyses a business
and its entire operations by explaining its goals, how it will operate and the likely outcomes
of the business
It allows management and employees of the firm to work towards a set of clearly defined
goals, thus enhancing the likelihood of the goals being reached and allows the business to
take the initiative, rather than just reacting to events that occur in the outside environment.
An effective plan demarcates responsibilities — spelling out the roles of key personnel; it
also helps clarify job expectations and improves the accountability of staff to the owner–
manager.
, There is a significant positive correlation between business planning and business success,
but it is important to ensure the business plan is reviewed regularly to integrate the
changing environment in which the business operates.
The Accountant’s Input to the Business Plan (p.27):
Financial Projections:
The formal financial content of the business plan will include financial documents, forecasts
and analyses, background notes, and other information that help decision makers make
sense of the financial forecasts.
Basic Assumptions and Information:
The accountant will need to explain the assumptions made in estimating income and
expenses and in calculating the various figures and any unusual items, significant omissions
or unusual variations in the figures need to be justified.
It may be useful to provide details about the bank accounts that the business operates —
what financial institution they are with, what type of accounts are they (savings, cheque or
cash management), and what fees are charged.
The accountant should also provide an assessment of how well the financial institution’s
facilities meet the business’s needs
If money is to be borrowed, information should be provided about the proposed lender,
total amount sought, date required, monthly repayments due, interest rate, loan conditions
and term of the loan.
Financial Forecasts:
The required financial forecasts include the following.
Sales mix forecast
Cash flow forecast.
Projected profit and loss statement
Balance sheet reports
Personal expenses, assets and liabilities
Using the above data, one may perform ratio analysis including break-even point, fixed and
variable costs, contribution margins, mark-ups and margins, projected impact upon the
value of the business and ROI impacts
Beyond the Financial Projections:
, If properly done, preparation of a business plan will foster skill development during the
process of balanced and objective data collection, systematic analysis of the positive and
negative results revealed by the research, and the development of a comprehensive
business response strategy that integrates all activities of the proposed venture with its
internal and external environment.
1.7: Performance Measurement (p.30):
Organisational performance measurement includes developing goals to support the
achievement of the entity’s mission, transforming those goals into strategies and then
measuring performance.
The performance evaluation of the efficiency and effectiveness of the entity’s strategies,
structures and processes is integral to the achievement of the entity’s mission and provides
feedback for future action.
Performance measurement systems could include measures to evaluate the performance of
the entity, organisational divisions or segments, individual managers and employees,
customers, products or services, environmental and social performance, suppliers, or
processes
The Integrated Report:
The emphasis of the integrated report is on communicating the entity’s value creation over
time by communicating relevant organisations of financial, environmental and social, risk,
and governance items
Reporting on the integrating aspects of financial capital, manufacturing capital, intellectual
capital, human capital, natural capital, social capital and relationship capital will help
management assess the value created by the organisation and the trade-offs made
1.8: Regulatory Environment (p.31)
The contemporary regulatory environment is a formidable challenge arising from:
Different regulatory regimes when operating or transacting across national borders
A lack of clarity or stability around regulation of emerging business models and
technologies such as the sharing economy and cryptocurrency
The evolution of standardisation across national boundaries
Changing regulatory environments as governments try to keep up with rapidly
changing technology, business models and an increasingly globalised economy.
For a business to be across all the relevant regulations and laws, and how to respond to
them, will likely require more than one specialist but accountants are well-placed to provide
advice on several areas, including, record-keeping requirements, tax rules and reporting
requirements
One of the biggest challenges is being prepared for possible regulatory changes and how
they might impact on the business which should be an element of the business’s risk
management approach
1.9: Project Management (p.33)
Organisations perform work through operations and projects:
Operations involve ongoing, relatively routine work, such as preparing tax returns or
helping a client establish accounts.
, Projects are one-off efforts to achieve specific goals, such as moving a business’s
accounting platform from company servers to a cloud-based provider.
Project management is planning, organising and controlling the activities of human
resources to achieve a specific project to a predetermined schedule and budget.
Many organisations have become more project-based, and management accountants are
likely to find themselves frequently working on projects (E.g. Achieving compliance with new
regulations, applying new technology, and undertaking a business acquisition)
Project Methodologies (p.34):
Traditional Project Management:
A project charter should be created at the start of each project identifying the objectives of
the project and forms a contract between the project team and the rest of the organisation.
Prince2:
PRINCE2 is a project management methodology based on dividing projects into substages to
help better manage and control aspects of the project.
To keep each factor within the established tolerance level, PRINCE2 imposes 7 principles on
the project management approach
1. The business case for the project must be revised at each stage and the project should
only continue while the business case remains.
2. The experiences of the project team and other projects teams are recorded and studied
to ensure the project team and future projects learn from previous experience.
3. Roles and responsibilities are defined separately from the individuals in the project
team.
4. The project is broken into stages to facilitate management and control.
5. Variations outside the established tolerances are escalated to higher levels of
management.
6. The project focuses on the quality of the product delivered.
7. The method is customised to the needs of the individual project
,An Agile Approach (p.35):
Traditional project management follows a waterfall approach which has many advantages,
including comprehensive planning and effective use of resources but it is not suitable for all
projects as some of them require greater flexibility
An agile approach de-emphasises methodology and instead emphasises flexibility,
particularly the ability to adapt to change with the focus squarely on the product, and risk
management and levels of governance are secondary.
Downsides to agile projects include that they require a relatively open timeline and
unrestricted budget and because the project’s goals and needs are constantly adjusted, it is
not possible to fully establish resource needs ahead of implementation
The PRINCE2 Agile-to-accommodate agile approach enables risk management and formal
decision making to be applied over the top of an agile project approach
Project Management Tools (p.36):
Gantt charts: These provide a linear representation of the timing of each task in a project
Critical Path Method (CPM): This method identifies interdependencies between tasks to
determine which tasks can be done in parallel and which will require the completion of
other tasks first
Project evaluation and review technique (PERT): This is a tool that identifies the tasks,
durations and dependencies in a project, but also builds in uncertainties and contingencies.
A work breakdown structure which breaks the project into elemental tasks, is particularly
useful for project accounting as it enables costs and risks to be attached to each aspect of
the project which can then be monitored to ensure the project resources are being used
efficiently and are adding value
1.10: Other Business Skills (p.36)
Leveraging Technology (p.36):
To make utilise opportunities and manage the threats provided by technological
developments, firms will need to acquire people with new skills, like data technologists.
Risk Management (p.36)
Risk management is the ongoing process of identifying and evaluating the likelihood of
potential adverse events, and the development of plans to reduce, transfer, avoid or accept
the effects of these events.
Risk identification produces a comprehensive list of financial, operational, strategic and
compliance risks which are then prioritised by performing a risk assessment.
Once risks are assessed, a risk response plan is prepared, including contingency plans that
identify the actions to take should a risk eventuate.
Sustainable Business Development (p.39)
Sustainability is the use of resources in a way that satisfies society’s current needs without
compromising the ability of future generations to meet their needs
Perhaps the biggest challenge in achieving sustainability is that while many organisations are
increasingly engaged with the concept, those same organisations are fundamentally built
around more traditional conceptions of economic growth.
Part C: Behavioural Skills (p.42)
,1.11: Future Focus (p.42):
A future focused accountant must understand how they contribute to the business’s overall
strategy and appreciate that this will constantly change, due to external factors, internal
factors and the decisions of the accountant themselves.
Adaptive Mindset (p.42):
An adaptive mindset refers to a state of mind that welcomes opportunities to improve and
responds well to change and feedback.
Reflective Practice (p.43):
Reflective practice is when a person to actively reflect on experiences to learn and improve
(E.g. Seeking feedback, analysing experiences and planning behaviour)
A person’s professional development occurs through a mix of formal education and
professional development activities that provide structured learning opportunities and
reflective practice, which is a behavioural trait that facilitates learning that occurs outside
formal education.
1.12: Problem Solving and Decision Making (p.44)
Accountants should take every opportunity to develop their critical and creative thinking to
support their problem-solving abilities.
Information (p.44):
One of the most critical steps in problem solving is to ensure the problem itself has been
properly identified and then information must be gathered
Ideas (p.46):
Some problems in business are relatively routine and will occur again and again, and they
have well-tested solutions or responses called programmed decisions.
Strategic decision makers, however, are almost always focused on complex problems
situated in varying degrees of uncertainty and risk, and these problems require unique
responses through a combination of critical and creative thinking.
, Critical and Creative Thinking:
Critical thinking involves evaluating which information is relevant, questioning information
where required, interpreting information and formulating a recommendation or decision
based on logic without bias
Creative thinking involves generating new ideas, thinking about something from a new
perspective and making new connections between ideas.
Innovative thinking is a closely related concept that goes beyond idea generation to also
address issues of implementation.
Solutions (p.47):
Once possible courses of action have been developed, decision makers need to assess the
relative pros and cons associated with each and how to implement it.
1.13: Communication (p.48):
Communication is central to all personal and professional relationships and is used to
inform, instruct, persuade, exert influence, change behaviour, interact, build rapport and
affinity and includes interpersonal and group communication
A Model for Understanding Communication (p.48):
The creator is the person who wishes to communicate a business message which will be
created for the purpose of instructing or directing the activities of staff or suppliers,
providing information to staff, management, customers or shareholders, or requesting
information from them, or promoting products or services to the market.
To effectively communicate a message, the creator needs to encode the message (E.g.
Choosing language, graphics, tone, location, colours etc) and choose an appropriate channel
or medium (E.g. Email, poster, letter, online etc)
The consumer is the intended recipient of a message and to receive a message, they must
interpret the meaning of its contents which is dependent on their perspective as well as
their relationship and opinion of the creator.
The model also identifies noise, which is anything that can interfere with the intended
message, ranging from a poor phone connection to the cultural context
Power distance: These are differences in the organisational or social status of the sender and
receiver and the nature of the relationship between them
Communicating with Clients and Colleagues (p.51):
As a future-focused accountant, you will collaborate with your clients, seek feedback,
nurture interaction and respond to questions in an easy to understand manner
The overarching aim is to make people feel comfortable so that they will ask questions,
understand and act on your messages (E.g. Avoid technical terms and jargon)
