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29 March 2024

Taking finance beyond realm of numbers

Aubrey Joachim President, Cima. (SUPPLIED)

Published
By Shveta Pathak

Finance professionals shared much of the blame for the global financial crisis that was termed as one of the worst in the past 70 years. Their role in the present economic environment has undergone a significant change and is expected to be much diverse, said Aubrey Joachim, President of Chartered Institute of Management Accountants (Cima).

Management accountants will no longer be restricted to end numbers but with continuously relating these numbers to an organisation's goals. Factoring in risk is gradually becoming a major part of their function, Joachim told Emirates Business during an interview.

"We are calling it the transformation of finance – transforming the finance role from that of mere policemen and scorekeepers to one that adds value to a business on a continuous basis and ensures sustainable development in business," he said. Enlightened organisations are also focusing on upgrading the financial skills of their employees. This shift is occurring in the UAE as well and CIMA is more active in the region now, he added.

 

What is the role of management accountants in the present economic scenario especially with finance professionals finding themselves on the wrong side of the picture during the economic crisis?

We need accountants who are aware of what is happening in the business and who can add value to it. Financial accounting comes in after what happens in the business. Management accounting is the exciting side of accounting – making an organisation deliver desired results instead of looking back. The accounting profession has lost a lot of credibility, especially after corporate collapses. Organisations collapsed because of performance failures. We are trying to tell young professionals that they are not just auditors preparing financial reports but need to be involved in influencing the performance of an organisation. Additional functions that come into play include performance management, identification of risks, compilation of risk registers and identifying the cost of mitigation of risk.

How do you take initiatives to diversify their roles in the absence of structural changes?

That is what is happening today, because the management accountant's role comes with the responsibilities that no other role does. We are not satisfied with merely the end numbers but need to relate these on a continuous basis to what is happening. That's the information that management accountants provide to strategists in any organisation.

Is the crisis bringing on that change?

True. We are calling it the transformation of finance. [This means] transforming the finance role from that of mere policemen and scorekeepers to a role that adds value to a business on a continuous basis and ensures its sustainable development.

Does this mean you have begun to factor in risks?

You have hit the nail on the head. Until now, risk was thought of in the context of operational or catastrophic risk. Now, we see big organisations advertising for risk management positions and the qualifications they are looking for are in finance. Why? Because at the end of the day, there is a positive or negative financial risk.

People don't know how to identify positive or negative risks. When you are in business, you are in the business of risk. An analytical view is needed even in a risk position, that is the change we are looking for – to move traditional accountants from the comfort zone of merely looking at numbers to now being able to understand business first and then proferring advice. This is where management accounting has begun changing.

Have you witnessed this change in companies hiring in the UAE?

They have begun to make corrections. You talk of the UAE as a country and also of people doing business here. They have realised they have to change their strategies. Key changes are bringing in that entire risk understanding – any kind of failure driven by tangible failures, projects that are too big, lack of income streams to feed projects that are too big, these are the analytical aspects. When we look at job advertisements, you see some perspective coming in but I don't think it is enough as yet.

Are employers also focusing on upgrading skills of their employees in the finance sector?

Yes. We increasingly find big employers sending their people into management accounting. The UAE is a different market. The crisis could lead UAE-based organisations to look at this aspect. Organisations need to recognise the need to train people, this is the shift that is taking place.

Is Cima also attempting to bring changes in its curriculum?

Yes, the entire curriculum is based on adding management competence, strategic insight and operational side. At CIMA, we update our curriculum at least once every four years.

What are Cima's plans for the region?

We have hired more people. Over the past three to four years, we have been very active in this region. Even people with other accounting qualifications are looking for CIMA certification. We are reaching out to universities, encouraging them to be different. One of our slogans is 'CIMA accountants are financially qualified business leaders'.

PROFILE: Aubrey Joachim President, Cima

Starting his career as an accountant with a leading export garment manufacturing organisation in Sri Lanka, Joachim joined the Dubai (UAE) operations of McDermott International as an asset accountant and rose to the post of senior finance manager for the Middle East and South-east Asia. He has also worked with the firm's European operations in London and with the Sydney Water Corporation. In 2005, he set up his own boutique consultancy.

Joachim gained his Cima certification in Dubai in 1984 and was admitted to the Fellowship of Cima two years later. In 1988, he led a McDermott team to win the finals of the Benson & Hedges Middle East Management Challenge and won the Cima/Reed Global Management Accounting Competition in 1991. He holds an MBA from the Sydney Graduate School of Management and is a graduate of the Australian Institute of Company Directors.