Accountants 'key to business performance' - IFAC
A new review of global research has shown a clear link between the use of professional accountants and positive business performance.
The report, commissioned by the International Federation of Accountants (IFAC) and carried out by researchers at the Bucharest University of Economic Studies, compiles the evidence of existing literature to assess the impact of accounting expertise on businesses around the world.
What was most apparent from the overall conclusions was that organised businesses with a focus on development made the fullest use of advice from professional accountants.
Those businesses in turn experienced a higher performance level than those who did not use accountants.
Studies were taken from more than 90 academic papers, including research originating in the UK, the US, Australia, Japan and France.
SMEs were shown to traditionally rely on accountants as a main source of business advice. One study identified an 8.1% average increase in sales growth and a 29% decrease in likelihood of failure for businesses using an external accountant.
Another reported that 75% of SMEs with detailed budgets experienced better sales.
Earlier this month, the Association of Accounting Technicians (AAT) also released research suggesting that 19% of small business owners simply turn to Google for financial advice.
IFAC CEO Fayez Choudhury said: “It has long been assumed that taking advantage of the breadth and depth of experience and expertise of professional accountants helps organisations optimise performance, efficiencies, and more.
"It is heartening to see robust global evidence in support of this relationship.
“The report finds that organisational development and performance lead to increased use of accountancy expertise, and accountancy expertise leads to superior performance and development.”
Business performance improves in those organisations where accountancy takes on a prominent strategic role, the report found. However, it noted that larger entities have the capacity to support both internal and external accountancy sources.
Professional accountants, according to the paper, are well-suited to play various roles in organizations that directly and indirectly impact business performance, including data analysis, decision making, risk management, and creating sustainable value.
A survey of 588 professional accountants and 570 external stakeholders commented on the evolving identity of management accountants and stated that such individuals contribute to cost efficiency and value creation.