Changing regulatory landscape biggest challenge: KPMG

NEW DELHI: Changing regulatory landscape, efficient service delivery, lack of reliable data and analytics, working capital management and key people management are the primary challenges for chief financial officers (CFOs), according to the ICC-KPMG report on the role of CFOs in today's environment, which was released in Kolkata this morning.

According to the survey conducted by KPMG in India, a large majority of those surveyed (90%) believe that changing regulatory landscape is the biggest challenge facing the finance function.

"A CFO's role is way beyond managing traditional functions in the domain of finance and accounting. Being a core decision-maker, his execution of strategies, which impact both organic and inorganic growth of a firm, is more relevant than ever," Viral Thakker, partner, KPMG said in a statement. "Today's CFO not only bears responsibility for operations but also acts as a strategist and business lead, thereby walking a fine line. He meets ambitious profit targets while ensuring regulatory compliance. All this, while moving towards the company's long-term sustainable business model," he added.

The ICC-KPMG report also evaluates changes likemandatory consolidation of financial statements, audit rotation, simplified mergers and acquisitions and corporate social responsibility, that would need to be incorporated during the implementation of the New Companies Act. These propositions in the Act impose additional responsibility on the directors, chief financial officers and auditors, according to the report.

Data mining and business intelligence will become a key weapon for CFOs to make sense out of seemingly unrelated data and predicting future business scenarios through regressing, correlating and forecasting, according to the report. In the near future, advanced data analytics will become invaluable in making business decisions.

The key obstacles in the successful implementation of the extended role of the CFO in the report were outlined as unrealistic expectations,lack of proper planning, differing stakeholder views, lack of commitment, neglecting change management, cost and time overrun and lack of quality resources.

"A CFO's forte lies in identifying core financial risks and effectively converting them from a possible threat to opportunity which calls for framing a proactive risk management policy. By developing a more strategic vision and approach, the CFO can assist the organisation in taking the right risks," says Ambarish Dasgupta, head, management consulting at KPMG.