ICAS President, Indy Singh Hothi CA: The key issues facing CAs in 2023
Confidence has taken a hit in 2022, but Indy Singh Hothi CA outlines the ways in which CAs can help to dispel the gloom
As we approach the end of 2022 we find ourselves living in an uncertain and economically volatile world. There are significant challenges brought by recession, not least here in the UK. The contribution of CAs in steering their businesses, organisations and clients through will be vital.
From our perspective, ICAS will be launching our 2030 strategy in 2023, to make sure we are in the right place for our profession and our members to help to educate, influence and regulate. With all this in mind, for my final column of 2022 I’ve chosen six key themes that I believe will shape the next 12 months.
We are still championing audit reform and encouraging the UK government to remain committed to the plans laid out in the Queen’s Speech earlier this year. We need to update and maintain a robust governance system and support ethics within the accountancy profession. Ultimately, this is about making sure the corporate ecosystem is working in the interests of all stakeholders, ensuring the regulatory environment is respected and the UK is a place where people want to do business. This is key for our profession, and we need the government, regardless of all the changes at the top, to see the process through.
The Bank of England has warned that the UK is heading for the longest recession on record. Inflation is at a 40-year high. Rising interest rates are putting a strain on household budgets and giving businesses and government less room to manoeuvre when it comes to borrowing for investment. Businesses will need to plan for different scenarios, which will again bring the work of CAs to the fore – they will be on hand to provide judgement, experience and hard-earned technical skills.
The world is waking up to the near certainty that we are going to overshoot the 1.5°C global warming limit laid out in the 2015 Paris Agreement. That is likely to have significant ramifications. It means the spotlight on sustainability, and what we can do to mitigate the impact of the climate crisis, will be even stronger.
Our profession must take the lead in supporting high-quality reporting that enables companies to measure their carbon emissions. That will provide vital information for capital markets and customers alike when deciding where to invest and spend their money.
The collaboration of the International Sustainability Standards Board and Global Reporting Initiative in creating frameworks for standard-setting on sustainability was a hugely important milestone that should help accelerate the development of climate reporting. We’ve already seen two drafts of new international standards. We need support from government to make disclosures mandatory.
Wellbeing and mental fitness
One upside of the pandemic is the growing realisation that workplace wellbeing is not an optional extra. The stigma in discussing mental fitness is breaking down. And there is a clear economic case for firms to support the wellbeing agenda, which will in turn boost the resilience and productivity of the workforce. Expect this to rise even higher up the business agenda in 2023.
In a recessionary environment, the focus on customer and client experience increases greatly. Consider how things have changed in the way accountancy firms operate. Clients now expect advice when and where they need it – and many are looking beyond mere accountancy, and at wider business support. Our members in practice are now often expected to fill the role of trusted advisers, providing insight and judgement. Businesses will need to focus on a strong value proposition for their products and services, and ensure they deliver a good customer experience.
Finding and retaining talent is crucial. The current shortage is creating strain and could harm the long-term prospects for our profession. We need to forge new pathways into accounting for young people. More social mobility and a stronger emphasis on equality, diversity and inclusion would increase the breadth and depth of talent drawn to a career in finance. The wider importance of CAs is often underestimated. As a CA, you can influence both business and society to make the system work better for us all. People don’t yet know what we mean by “carbon accountants”. We haven’t got that messaging right – but it will come.
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