The CFO 411: Building the Finance Team of the Future

Motion Blur Of Train Moving

The rapid pace of change. Greater business complexity. An onslaught of data. For companies looking to stay competitive amid so many business challenges, innovation must be embraced and nurtured across the organization—and new research says the finance team is crucial to that growth. Elsewhere this week, new regulations and shareholder pressures drew more attention to the long-entrenched gender wage gap. And U.S. business leaders are bracing for a rough earnings season, as corporate earnings topple for the fourth quarter in a row.

4 need-to-know headlines

1. Finance integral to company growth, survey shows

Roughly 85% of financial professionals report that their companies’ success over the next five years will increasingly depend on the finance team’s ability to adapt to new changes and to translate data into swift, decisive action, according to a CFO Research survey. That’s fueling a subtle but fundamental shift in how finance departments are viewed internally, with forward-thinking companies relying on these teams as collaborators and analysts rather than merely data shepherds. One hurdle that’s stopping firms from attracting and retaining top talent, the survey shows, is automated finance tools that aren’t up to snuff. Nearly three-fourths of respondents feel that enterprise technology must be raised on par with consumer-facing IT products in order to attract the best candidates. (via CFO.com)

2. Late-game reporting errors hard to stamp out

First, the good news: The overall number of financial revisions or restatements has dropped by 60 percent compared with 10 years ago. So overall, accounting books have fewer errors. Yet the bad news is that the top three areas for reporting missteps—debt and equity, cash flows, and taxes—have each seen an uptick in corrections. More than half of the corrections made in 2015 involved one of these three areas, and their frequency has surged more than 100 percent since 2002. “These areas are complex, and they happen late in the financial-reporting process,” said one national managing partner. “I think that you were always going to see these three issues very high up.” (via WSJ.com [log-in required])

3. Accounting board proposes new rules for outside audit work

How close of an eye do you need to keep on accountants and auditors who handle your outsourced work? If the Public Company Accounting Oversight Board’s new rules go into effect, the answer may change. The proposed rules call for lead auditors to be more transparent about exactly what work is outsourced and to whom, including naming the parties responsible for planning, supervising and evaluating those third-party accounting teams. (via AccountingToday.com)

4. More firms feeling wage gap pressures

Investment firms and activist shareholders alike are pressing major corporations for more pay transparency. And new regulations could help drive even more pressure to close the gender wage gap. President Obama proposed new rules earlier this year that would require large companies to report salary data on gender to the Equal Employment Opportunity Commission, and in California the recent Fair Pay Act requires that companies pay men and women equally—and be able to prove they do so. On the eve of Equal Pay Day, April 12th, Facebook and Microsoft joined a growing number of firms that released statistics about their own salaries based on gender. (via WashingtonPost.com)

The stat: 9.8%

That’s the average year-on-year drop in earnings for Standard & Poor’s 500 index companies in the first quarter—the fourth consecutive quarter of contraction. Business leaders are bracing for what’s expected to be the worst earnings season in more than six years. (via Bloomberg.com)

Sound bite of the week

“After the Panama Papers, there must not be a single hesitation from anybody that we need a public country-by-country reporting.” —Pierre Moscovici, the EU’s taxation commissioner. The discovery of thousands of offshore accounts could have far-reaching impacts on all multinational corporations. The EU is expected to propose legislation requiring all companies with more than $856 million in annual revenue (and their medium and small subsidiaries operating within the EU) to publicly publish their profits and tax bills on a country-by-country basis. (via WSJ.com [log-in required])

 

4 Top Stories + 1 Key Statistic + 1 Industry Quote = The CFO 411

The CFO 411 is our weekly news roundup that brings you top headlines, data points, and sound bites to keep you in the know. Follow our updates on LinkedIn for more finance must-reads.

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