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ISCA PAIB CONFERENCE 2020

GEARING UP TO REBOOT IN A NEW WORLD

THERESA TAN

ISCA PAIB VIRTUAL CONFERENCE

These unprecedented times call for innovative ways to upkeep traditions, and ISCA endeavoured to provide a complete and rewarding experience for the more-than-1,000 registered attendees of its very first virtual PAIB Conference.

The five-hour ISCA PAIB Conference on August 25 featured 13 speakers, who shared their expert views on overcoming the challenges faced by finance professionals that Covid-19 has brought about. The conference was conducted live via a virtual conference platform.

ISCA President Kon Yin Tong introducing the theme of the ISCA PAIB Conference

ISCA President Kon Yin Tong introduced the theme, “Gearing Up To Reboot In A New World”, in his welcome address. He emphasised the importance of upskilling and reskilling in order to adapt to these volatile times. Through the conference, the Institute sought to support accountants in navigating the challenging environment, and work towards a post-pandemic recovery.

A TIME OF OPPORTUNITY

“Our world has been upended by Covid-19,” said Ms Indranee Rajah, Minister in the Prime Minister’s Office and Second Minister of Finance and National Development in her keynote address. And while the road to recovery looks to be long and tough, she stressed that new opportunities await the proactive and the agile.

Minister in the Prime Minister’s Office and Second Minister of Finance and National Development Indranee Rajah spoke about seizing new opportunities to pave the way for recovery 

In her speech, Minister Indranee outlined the roadmap to recovery, which is to be ready to seize new opportunities that arise out of crisis. She cited examples such as Alibaba, which learned during the 2003 SARS epidemic to transform its business model from B2B to B2C — a move that turned it into one of the world’s biggest companies today. In today’s challenging climate, Minister Indranee said she was encouraged by the many instances of businesses innovating in response to Covid-19, such as accountancy firms that have introduced robotic process automation (RPA) to streamline and speed up their audit processes. She encouraged accountants to reskill and upskill in order to “chart a new path” in their careers, citing the example of an accountancy-trained homemaker who decided to leverage the Professional Conversion Programme for Internal Auditors, and eventually joined wealth management company Portcullis Pte Ltd.

Two qualities are needed to get ahead on the road to recovery, said Minister Indranee, who identified these as adaptability and partnership management. Digital adoption by consumers and businesses has been fast-forwarded five years due to the pandemic, estimates management consulting firm McKinsey. “Competitive advantage in tomorrow’s business environment will be determined by one’s use of digital assets,” she noted, adding that accountants need to be aware of this and to evolve to continue providing value to businesses. The second quality is the increased need for more cross-functional partnerships and collaborations, and even cross-sectoral partnerships, because of new opportunities in adjacencies between sectors. For example, some legal service firms have been expanding their suite of services to cover intellectual property and environmental and social governance.

The Minister ended by encouraging accountants to look to the refreshed Skills Framework for Accountancy to acquire new skills for the new needs that will arise in the industry, and to leverage the Professional Conversion Programmes for Management Accountants and Internal Auditors to upskill, reskill and position themselves to seize exciting new opportunities.

“It is imperative that you stay adaptable in order to provide value to businesses. This means three things. One, keeping your skills primed and your knowledge up-to-date with the latest changes in the markets. Two, becoming ‘business translators’, meaning people who understand innovation and who can inform businesses on ‘the benefits of automation and find ways to foster growth while minimising disruption’. And three, keeping the accountancy function up-to-date with the latest technologies in the market, for example, by using artificial intelligence to supplement business judgements in financial forecasting.”

Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister of Finance and National Development

NAVIGATING A NEW WORLD

Post-Covid-19 recovery begins now, not later. That is the mindset lauded by Stuart Chaplin as he painted what the future looks like for accountants. Mr Chaplin is Deputy Chair of International Federation of Accountants (IFAC) Professional Accountants in Business Advisory Group.

Deputy Chair of IFAC Professional Accountants in Business Advisory Group Stuart Chaplin urged participants to embark on post-pandemic recovery now 

Mr Chaplin shared that the thought processes for this evolution began more than a year ago within IFAC, and these processes were subsequently captured in a series titled “Future Fit”. Although they were set out pre-Covid-19, they are proving relevant in these current times. They centre on:

  • Connectivity between the finance function, and the needs of internal and external stakeholders and partners need to increase: finance functions need to be less siloed and more connected with customers and external stakeholders;
  • Digitalisation of business and finance processes: how will it transform business? How will the role of the accountant change? What skills are required for the future?
  • A growth and change mindset: how to go from being inward-looking to embracing change and uncertainty;
  • Talent management and the acquisition of relevant skills: what skills does one have? How to continually reskill and reinvent oneself?

Mr Chaplin then involved his audience in a live poll that asked the question, “How well do you think your finance and accounting teams are doing in meeting the needs of your organisation today?” Only 1.8% of the respondents felt they were doing extremely well, while 26% said they were doing a good job. The majority of 37% fell into “somewhat well” and 26% were “neutral”, while around 10% felt they were not meeting these needs at all. “That shows you we have a long way to go (and) I think that is a good representation of how finance functions generally feel,” he said. “This is the opportunity (to) reinvent the profession. We can accelerate and build on the strengths that we have, to position ourselves for the future. It’s not an option, it’s an obligation – we have to do it.”

He went on to detail the four areas of change needed for any accountant and finance organisation to be future-ready:

  1. It must be outward-looking and responsive to customers’ expectation and need;
  2. It must partner with the business to embrace digitisation and maximise the value and protection of data;
  3. It must establish a culture that encourages behaviours and actions to embrace growth, change and innovation, and
  4. It must employ talent management and development to deliver value-added activities and fulfil new roles.

In closing, Mr Chaplin issued this thought-provoking challenge, “How are you reinventing yourself? Because what has made you successful in your career is probably not going to be enough to make you successful in the future.”

“Reinvent, reinvent, reinvent. You cannot rest on your laurels in the future.”

Stuart Chaplin, Deputy Chair, International Federation of Accountants (IFAC) Professional Accountants in Business Advisory Group

JOB REDESIGN: WHY, WHAT, WHO, HOW

The topic of job redesign made up a large part of the conference agenda. Samir Bedi, Partner, Ernst & Young Advisory, EY ASEAN Workforce Advisory Leader Singapore, and Poon King Wang, Director of the Lee Kuan Yew Centre for Innovative Cities at the Singapore University of Technology and Design, co-presented the findings of a study, “Redefining The Finance Function With Job Redesign”. This was followed by a panel discussion on “Job Redesign – The New Work Order”.

(From left) Partner of Ernst & Young Advisory and EY ASEAN Workforce Advisory Leader Singapore Samir Bedi, and Director of Lee Kuan Yew Centre for Innovative Cities at the Singapore University of Technology and Design Poon King Wang, presented the findings of a collaborative research study on job redesign for the finance function

Mr Bedi commenced the presentation by noting that the world is changing rapidly, which underlies the aim of the study to look at the level of technology transformation required in financial accounting and management accounting jobs of the future. In particular, the research examines how job roles in finance functions could be redesigned due to technology and potential job mobility, the skills gap to be bridged, and emerging skills which accountancy and finance professionals need to be equipped with to meet changing job requirements.

He explained that “redesigning jobs” is really a move towards protecting jobs and saving livelihoods, and that was the purpose of this report. He delved into the impact of technology on 11 job roles, condensed from over 100 genres, in the study. The four digital enablers studied were RPA, blockchain, big data and artificial intelligence (AI).

“The world is changing very fast yet... this pace of change is likely going to continue and going to accelerate at a faster pace. As financial accounting and management accounting professionals, we have the opportunity to challenge ourselves and transform even faster than this pace of change.”

Samir Bedi, Partner, Ernst & Young Advisory, EY ASEAN Workforce Advisory Leader Singapore

The study covered three degrees of change in jobs: a high degree meant that the individual’s role was likely to be converged with another role or displaced by automation within three to five years. The medium impact group faced exposure to data analytics and automation and would have to take on additional duties in time. The last group are those that have to change incrementally but surely. Illustrating his points, Mr Bedi showed how, for example, an accounts executive who faced the risk of displacement would have to reskill for a problem-solving and sense-making role. The probability of current finance functions merging or being totally replaced would be a key concern for finance leaders.

Mr Poon followed up with what the study revealed about lateral transition in increasingly complex environments. “Jobs are being changed task by task,” he explained. “We should get a very good idea how to make the target interventions to make your company and your employees more resilient and robust.” By breaking down each job by task, Mr Poon showed that by identifying the risk profile of each task – and reskilling according to task – accountants can build on new skills and capabilities and remain relevant to the evolved needs of a company.

“Successful job redesign requires both hard skills and soft skills. It’s multifaceted, you need to plan ahead.”

Poon King Wang, Director, Lee Kuan Yew Centre for Innovative Cities, Singapore University of Technology and Design

Mr Bedi and Mr Poon’s presentations were followed by a panel discussion facilitated by the latter on “Job Redesign – The New Work Order”. Panellists Max Loh, Managing Partner of Ernst & Young, Singapore and Brunei; Judy Ng, Managing Director of DBS Bank, and Shia Yew Peck, Chief Financial Officer of YCH Group Pte Ltd, engaged in a lively discourse about the journey that each of their organisations has taken to effect the four digital enablers.

(From left) Moderator Mr Poon with panellists, Managing Partner of Ernst & Young, Singapore and Brunei Max Loh; Managing Director of DBS Bank Judy Ng, and CFO of YCH Group Shia Yew Peck, led a lively discussion on “Joh Redesign – The New Work Order” 

Ms Ng explained how DBS has, in the last seven years, given its staff room to experiment with using technology to automate tasks. Some failed, such as using RPA to automate routine tasks like extraction – they came up against firewalls; others proved very successful, such as using a data visualisation tool to distribute data to 1,000 employees, removing the tedium of churning out reports, and transforming their roles to discussing and explaining what the data reveals.

At Ernst and Young, intelligent automation is the focus, although these are still early days. “The hope is that one day, with machine learning and also with artificial intelligence, Finance will really have what they call a real-time control centre for finance operations, which will identify issues and flag risks,” explained Mr Loh, adding that Finance can then go from being reactive to being proactive.

“In DBS, we have a saying: business equals technology and technology equals business. Today, in doing business, technology is no longer just an enabler – it’s at the forefront. (But it’s also) about the talent and the organisational knowledge: you can have the best of technology but if you don't understand the organisational data, you can’t really be effective.”

Judy Ng, Managing Director, DBS Bank

“Our people need to be at the forefront of things because if not, we cease to be relevant. If you look at practical recommendations, the first point is, you shouldn’t just look at job redesign or change per se, but view it as part of an overall agile business or digital transformation; I think that that’s the most important thing. Because if you ask people to change the way they do things, but your own processes are not revamped, what will happen is that you’ve got trained and redesigned workers going back and doing exactly the same thing.”

Max Loh, Managing Partner, Ernst & Young, Singapore and Brunei

Mr Shia shared how, from the time he was studying Information Systems in university, he had gone from organisation to organisation, each time expanding his understanding and knowledge of data transformation. He explained that data sitting in the system doesn’t offer any information. Instead, data should be brought out, processed using tools like Tableau, and it will provide great insight. “You’ll find that you can do a lot with data,” he added.

“If we all have the common aspiration that we really would prefer to be going home to our families (than working late), then how can technology enable that? That could be a different narrative than saying, ‘Please upgrade otherwise you lose your job.’ I think that’s more empowering.”

Shia Yew Peck, Chief Financial Officer, YCH Group Pte Ltd

The panellists took questions from the conference participants, who submitted questions electronically. One attendee asked for recommendations on how to get staff to move out of their comfort zones and embrace job redesign. Mr Loh pointed out that change should not be the prerogative of employees; rather, organisations need to catalyse change. Ms Ng added that change begins with the right mindset – the willingness to try new things and the ability to overcome fear and inertia. She shared how DBS encouraged “standups” – short, casual meetings between staff of different departments – where people can ask questions and benefit from peer-to-peer learning.

Another salient question posed revolved around the feasibility of instituting protected time for staff to learn. Mr Loh shared how Ernst & Young encourages learning through the deployment of “Digital Badges” that staff can collect, which then leads to accreditation and ultimately even a “Tech MBA”.

The robust discussion revealed the overall push towards automation and big data in finance functions, and how current roles and mindsets will need to change in order to meet the new skill sets required for digital transformation in the work environment.

THE NEW CODE OF ETHICS

Tan Seng Choon, Chairman of the ISCA Ethics Committee, provided key updates to the Ethics Pronouncement (EP) 100 Code of Professional Conduct and Ethics revised on 14 August 2020. They include an enhanced conceptual framework, new and revised sections dedicated to PAIBs relating to preparing and presenting information, pressure to breach the fundamental principles, and strengthened provisions pertaining to offering or accepting of inducements, including gifts and hospitality.

Chairman of ISCA Ethics Committee Tan Seng Choon provided salient updates on the latest revisions to EP 100

He explained that applying the three-step approach to the enhanced conceptual framework would entail the following:

  1. Identify threats to compliance with fundamental principles;
  2. Evaluate whether identified threats are at an acceptable level using the reasonable and informed third party (RITP) test, and
  3. Address threats that are not at an acceptable level through one of three ways: eliminating circumstances creating the threats, applying safeguards, or declining/ending the professional activity.

He followed on with a segment on inducements as he reinforced what constitutes bribery and corruption, highlighting that a small $1 inducement to promote improper behaviour is still a bribe, and it might constitute an offence.

Mr Tan then provided an overview of Responding to Non-Compliance with Laws and Regulations (NOCLAR), which guides professional accountants in dealing with situations involving NOCLAR and in deciding how best to act in the public interest. He ended his presentation with an illustration of NOCLAR application and sharing some resources that ISCA has developed.

“The new Code of Ethics... is essentially a set of moral principles that professional accountants are expected to follow. This is an opportune time to remind professional accountants in business what this new code entails as we are in very trying times, and this code would lend some guidance and expectations of how we should behave.”

Tan Seng Choon, Chairman, ISCA Ethics Committee

RENEWABLE ENERGY FINANCING, RISK AND CHALLENGES

The second half of the conference offered attendees important updates on both opportunities and challenges that have arisen during Covid-19.

Kelvin Wong, Managing Director, Project Finance, DBS Bank, presented a study on the growth of renewable energy financing in Asia, primarily referencing wind energy offshore farms in Taiwan. He expressed confidence that energy infrastructure financing could lead economic recovery after the pandemic. While Covid-19 has hit many industries hard, renewable energy appears to be attracting investments, due in part to more companies committing to use renewable energy in the face of climate change as a long-term issue. DBS has been appointed Joint Financial Advisor in a multibank financing arrangement for Taipower, described as “the world’s largest floating solar project deployed in such conditions”; it is scheduled for completion at the end of 2020.

Managing Director of Project Finance at DBS Bank Kelvin Wong expressed confidence that energy infrastructure financing can lead in the economic recovery post-pandemic

Covid-19 has impacted a host of processes including risk management and governance. In her presentation, Cheryl Lim, Executive Director of Risk Advisory, Deloitte Singapore, stated that the “next normal” involved trends that have accelerated due to the pandemic, such as working from home and digitalisation. She pointed out that many vulnerabilities have been exposed during this period, but the upside to this is that organisations are forced to make improvements to their productivity, performance and resilience for the future. The downside includes a rise in cybersecurity incidents and fraud, which may include pressure to falsify financial figures to hide the full impact of Covid-19.

“At the height of our circuit breaker in Singapore, we actually closed the financing (for) the largest floating solar project in Taiwan. The impact of a global lockdown is currently being felt: manufacturing activities and supply chains are severely affected. Travel restrictions have also impacted construction and project development, and will mean delays in projects and so on. However, in Taiwan, because of the excellent work done by the Taiwanese authorities, combined with the fact that its supply chain is not disrupted, construction is ongoing. And what we have seen is Singaporean companies including DBS actually participating in, say, a market like Taiwan.” 

Kelvin Wong, Managing Director, Project Finance, DBS Bank

“Organisations should not take their foot off the ‘corporate governance and enterprise risk management agenda’ pedal, which has to be modified for the Covid world. The organisation should continuously identify, monitor and address new or heightened risk.”

Cheryl Lim, Executive Director, Risk Advisory, Deloitte Singapore

Executive Director of Risk Advisory at Deloitte Singapore Cheryl Lim emphasised that the “next normal” would involve trends that had accelerated due to the pandemic

Ms Lim emphasised that there is no going back – organisations must journey through this difficult period and recover. Her recommendation is for the triple bottom line of people, planet and profit to be factored into every organisation’s thinking for the steps ahead. Mindsets must shift now, led by management and the board, so that the changes necessary for recovery – digital transformation, managing stakeholder expectation, etc – can take place.

Co-Chairman of the ISCA Covid-19 Working Group and Chairman of ISCA Financial Reporting Committee Reinhard Klemmer shared insights into financial reporting, in light of the relief measures from the government and assessing for impairment

Covid-19’s impact on the accountancy profession is being felt on many levels. Reinhard Klemmer, Co-Chairman, ISCA Covid-19 Working Group and Chairman, ISCA Financial Reporting Committee, spoke on the challenges and implications for financial reporting, taking into account relief measures from the government and looking at how to assess impairment for financial reporting for this year. The Financial Reporting Committee and Audit Assurance Committee, in collaboration with ACRA, had formed the ISCA Covid-19 Working Group to react swiftly to the challenges faced by practitioners with the aim to maintain consistency in accounting practice across industries.

Mr Klemmer paved the way for Hans Koopmans, Co-Chairman of the ISCA Covid-19 Working Group and Chairman of the ISCA Auditing and Assurance Standards Committee. Mr Koopmans closed the conference with a roundup of the Technical FAQs available on the ISCA Covid microsite which cover the areas impacted by Covid-19, such as property valuation reports and going concern assessments.

“We live in a new world where past data may not be a good prediction of future developments, where historic experience may not be relevant going forward. The way I speak to you now (virtually),  past experience is no longer relevant; how I deal with a live audience is no longer relevant. And the same applies to a lot of reporting issues that preparers and auditors are facing.”

Reinhard Klemmer, Co-Chairman, ISCA Covid-19 Working Group and Chairman, ISCA Financial Reporting Committee


“I’m afraid that uncertainty will continue for some time to come. But I’m also mindful that working together in our respective roles as accountants and auditors, we are able to deal with these significant professional challenges, and ultimately able to produce high-quality financial information, which is what is expected by your shareholders and our regulators and, indeed, other interested parties.”

Hans Koopmans, Co-Chairman, ISCA Covid-19 Working Group and Chairman, ISCA Auditing and Assurance Standards Committee

Co-Chairman of the ISCA Covid-19 Working Group and Chairman of ISCA Auditing and Assurance Standards Committee Hans Koopmans urged participants to refer to the ISCA Covid microsite, where many resources are available

He encouraged PAIBs to look at the auditing FAQs on the microsite and see what might affect them, think about the changes in their working environment and how they impact the way controls are executed, and how to be prepared for the effort required to support the going concern assumption in financial statements. Mr Koopmans emphasised that the “new normal” has caused changes in processes and working arrangements, and that PAIBs need to watch for risks arising from changes in the control environment. Going concern – and even viability – have to be key considerations for management, he said.

The ISCA PAIB Conference 2020 presented PAIBs a basket of solutions, practical and cautionary measures, and a hope for the future where quality financial information is produced and upheld in a technology-driven environment. As Minister Indranee said, “I urge accountants to leverage on the (government and industry) support and stay committed to this journey of transformation… We must use this time to prepare for recovery. Press on with innovation and growth. Use this crisis to spark transformation and renewal. Plan well for the future, and position yourselves to seize the opportunities that are already there, and the many more to come.”


Theresa Tan is a contributing writer.