EY survey offers insights into future of reporting
EY has published the results of its ‘2020 EY Global Financial Accounting and Advisory Services (FAAS) corporate reporting survey,’ with a number of interesting insights into how the reporting landscape is changing. It is based on responses from more than 1,000 CFOs, financial controllers and other senior finance leaders.
The survey found that requirements for different types of data and insight are growing rapidly, fed by the uncertainties of the pandemic era. Most respondents felt that demand from stakeholders had increased in the past year in a wide range of areas, including forward-looking financial analyses and forecasts and near-real-time financial performance reporting; customer, competitor and geopolitical information; and governance, risk and compliance insight and non-financial or ESG [Environmental, Social and Governance] performance information. As the survey report observes, “while demand for different types of insight may have accelerated as a result of the COVID-19 pandemic, it is unlikely to decline once the COVID-19 pandemic is over.”
The need to better reflect non-financial intangibles in reporting was highlighted, with 65% of respondents saying “there is significant value for our organization that is not measured or communicated using traditional financial KPIs, such as brand value and human capital.” Almost one-in-five (17%) respondents said that the most important challenge in capturing long-term value was “the absence of formal reporting frameworks that show how the connection between tangible and intangible assets contributes to long-term value creation.”
The pandemic has also hastened operational and technological shifts, with smart data analytics, blockchain, and artificial intelligence (AI) playing an increasing role that finance leaders will need to navigate. 53% of respondents think it likely that more than half of the finance and reporting tasks currently performed by people will be performed by AI over the next three years. {Ed — Really?} A majority have concerns about the risks of using AI, and believe that governance, controls, and ethical frameworks need to be developed. {Ed — Well, quite!}
Roles are likely to change significantly, with two-thirds of respondents believing that “CFOs will spend less time on traditional finance responsibilities and more time on driving enterprise-wide digital transformation and growth.” The survey report concludes that finance leaders need to look ahead to provide the long-term value insight that stakeholders want, including a range of non-financial information. As Tim Gordon, EY Global Financial Accounting Advisory Services Leader, says: “If finance fails to meet the changing expectations of investors, regulators and other stakeholders, reporting could lose relevance.”
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