When I look at the year ahead I see many challenges for the accounting profession. This is neither due to superstition nor pessimism. Challenges always exist and provide opportunities for development and improvement. But we are facing a particularly turbulent economic, social and climatic environment.
Three critical issues are:
- The state of the economy – the global uncertainty continues. We see the economic crises in the West affecting not only the GDP but they are changing and challenging societies. Trust in our markets and ideals are shaken, while the purpose and means of corporate activity is increasingly questioned. Our profession, which has the paramount responsibility to act in the public interest, is fundamental in helping restore trust and transparency. How the profession deals with its actual and perceived obligations is likely to define its future.
- Regulation – the quantity and complexity of regulation is increasing. This is not unusual following financial crises and scandals. But frequently we seem to have little evidence that additional regulation will achieve its stated objectives. Regulation is not an end in itself. Ensuring the efficacy of introduced and proposed regulation is necessary to prevent regulation overload and the inefficiencies associated with it. Regulators need to clearly identify the causes of the problems they are trying to fix before the right solution can be found. They also have the difficult task of identifying and dealing with the unintended and unforeseen consequences of regulation in a timely manner.
- Regulatory conflict – the need for legal and regulatory global convergence is becoming evident in our profession. The legal boundaries of our interconnected world create challenges for the enforcement of the law and for an ever increasing segment of our profession that has to work across them. Regulatory conflict not only affects our profession it also creates risks for companies when they do what is legal in a particular context when it is not legal in another.
These challenges are not independent of each other and are not the only ones we face, but they are significant for us and can define our future. While they are largely beyond our control they require our heightened attention and appropriate response.