The value of professional accountancy qualifications

Why should businesses in the Czech Republic encourage their employees to study for the ACCA qualification?

Given the influence of changing regulatory environments on the economic, banking and financial sectors, businesses both large and small are facing a tough and unpredictable time.

What role can accountants play to help to ensure that the risks associated with such changes  can not only be assessed effectively but also enable growth and more sustainable value creation for European business sectors?

One of the hallmarks of sustainable enterprise is a strong finance function. Organizations, whether in public or private sectors, benefit strongly from the discipline that comes with financial management, and the embedding of financial awareness within the organization from the most senior, board level, down to the most junior employees. In these organizations, financial management is not seen as an imposition; it is considered a necessary part of the culture of the organization; and such changing trends can be increasingly observed amongst international organizations in the Czech Republic.

The ACCA (Association of Chartered Certified Accountants) has itself long embraced the need for financial discipline as a cornerstone of the corporate sector, and the developing profession in the Czech Republic has led to an increased perception of the value of accountants by both international and local businesses.

It is notable that financial skills are particularly needed at times when difficult economic conditions lead to situations of unpredictable business risk. Recent surveys by the ACCA show that demand is currently high for accounting skills in Europe, particularly amongst international business organizations interacting with both developed and developing nations. The CFO has become more important in recent years as a guardian not only of financial performance but also as a key player in creating long-term value and ensuring regulatory adherence. It is no accident that professional accountants are found on the boards of listed companies around the world, including the CEE region.

The outward-facing role of CFOs has also broadened. It is no longer just the shareholders who seek to understand and analyse company performance. Wider stakeholder groups are now scrutinizing the broader supply chain, ethical business practices. and the company’s corporate social responsibility (CSR) and environmental record. The CFO is increasingly the “guardian” of the brand, ensuring that the company adheres to good sustainable practices. Accountants are no longer reporting to the shareholders alone and ensuring that businesses comply with regulation. They must play their part in maintaining and building the reputation of the company, and rebuilding public trust.

Small and medium-sized enterprises (SMEs) form a major tranche of the economy in Central and Eastern Europe. From a macroeconomic perspective they contribute to the diversification and reduction of concentration risks. They can help to alleviate the effects of a recession on productivity, the employment market and growth. For example, a stronger local economy – vitally supported by the SME sector – can begin to make up the shortfall provided by falling investment and lower exports, and lessen the impact of a global recession. The growth of the small business sector in the Czech Republic and their increasing business activities that expose them to EU and international trading means that accountants are essential to supporting the small business sector, estimated by the OECD to represent 95% of all enterprises.

SMEs make a positive contribution to economic growth, requiring well-rounded finance managers and advisers to ensure small businesses survive and grow. The total number of SMEs in the Czech Republic represent a substantial proportion of businesses, and have long been recognized as a key driver for economic growth, innovation, employment and social integration. The European Commission rightly assists the Czech Republic and seeks to promote successful entrepreneurship and to improve the business environment for SMEs, to allow them to realise their full potential in today’s global economy.

In light of their contribution to the dynamics of the European economy, entrepreneurs and the SME sector in Czech Republic must be recognized as key drivers of future economic development, no longer the forgotten sector. At the macro level, entrepreneurial activity, especially of an innovative nature, is a leading indicator of the broader economic cycle, and a key component of the current upturn experienced in the Czech economy.

And accountants are playing an ever-increasing role in providing trusted, professional guidance to SMEs on a wide range of issues.

With this in mind, the ACCA creates the “complete finance professional”, with the skills required for financial reporting, management accounting, compliance with tax and other regimes, risk management and performance analysis, grounded in professional governance principles and ethical practices and with the knowledge appropriate to provide well-rounded advice to company owners and managers.

In addition, with the development of information technologies, the functions and skills that comprise a modern finance professional are changing rapidly. The recruitment and retention of talented people with the right skills - and able to make the right decisions - is key to any business’s success. As the CEE region grows, demand for high quality, dynamic, professional staff will rise quickly and competition for the best and most capable individuals will intensify. Professional accountancy bodies like the ACCA are therefore working directly with employers and policymakers, to ensure that they continue to develop finance professionals, locally, from within local markets, with the range of skills and knowledge required to help business along the path towards sustainable long-term success.

The growth in capacity in key professions is also creating opportunity for a wide range of individuals, both in their local economies, and through a recognized qualification as an international passport, enhancing social mobility. The ACCA report “Climbing the Ladder: ACCA and Social Mobility” examines the benefits of widening access to the finance professions, and highlights the need for all those involved in the process of qualifying professionals to adopt strategies that seek to break down barriers to entry.

At the same time, ensuring that professionals’ skills and qualifications meet the future needs of employers and clients, are key goals for professional bodies across a wide spectrum of sectors. There has never been a more appropriate moment to introduce the teaching of the professional ACCA qualification at both Foundation and Fundamentals levels to businesses in the Czech Republic and the wider region.

Bruce Gahir sits on the Global Ethics forum of the ACCA, and heads the ACCA examination programme at Prague College, the only university in the region to prepare students for the complete ACCA qualification.