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2012 Finance Priorities SurveyBalancing core transactional responsibilities with a greater focus on strategic capabilities to build value in the finance function
1 2012 Finance Priorities Survey
INTRODUCTION
Corporate finance functions continue to tear down walls – those surrounding organizational silos as well as the company’s outer partitions. But make no mistake: These efforts are highly constructive. In response to ongoing macroeconomic and marketplace volatility, leading finance functions identify, analyze and share information with their organizations about innovation, customers, competitors, government actions and other aspects of the external environment to help maximize market opportunities while minimizing the risk that strategic assumptions will become invalid.
In addition to building this “competitive intelligence” capability,1 more finance executives and professionals appear eager to take on greater responsibility for analyzing and reporting key operational metrics to enterprises that grow increasingly hungry for more precise and actionable intelligence. Of course, these executives and professionals also must continue to sharpen their financial performance management activities while improving the efficiency and effectiveness of the broad range of financial processes, transactions and analyses they traditionally have performed. Strengthening these long-established, predominantly transactional activities (while also contending with an ever-increasing risk and compliance management workload) still qualifies as necessary work for finance functions, but the results of Protiviti’s latest finance survey indicate more strategic work is necessary.
Protiviti’s 2012 Finance Priorities Survey, through assessing the self-reported skill levels of finance executives and professionals along with areas they cite for improvement, identifies top priorities and key areas of focus for today’s finance functions. The finance executives and professionals who participated in our survey include chief financial officers, vice presidents and directors of finance, and controllers, and they represent virtually all industry sectors. The most-represented industries include financial services and manufacturing. In terms of size, they represent a diverse group of organizations, with more than 40 percent from companies with US$1 billion or more in annual revenues. We take a closer look at the responses from this group throughout our report. (We may be able to provide additional insights by company size and industry – please contact us for more information.).
Respondents answered more than 100 questions in three categories: Process Capabilities (which include a) Financial Transaction activities and b) Financial Analysis activities), Technical Capabilities (including competencies related to regulatory compliance) and Organizational Capabilities (personal skills).
The study’s most notable findings include the following insights:
1. While finance executives and professionals are focusing more and more on strategic activities, complex transactional issues also rate as top priorities, placing increased pressure on finance functions to make traditional, transaction-heavy processes as efficient as possible, thus freeing up more time for high-value contributions such as financial analysis and business decision-support activities.
2. Competitive intelligence and financial risk management represent top priorities across all sizes of companies and among all levels of the finance function (finance executives, managers and professionals).
3. Finance functions appear intent on moving their shared services organizations beyond a “lift and shift” approach to mature proficiency, enhancing the scope of business services and increasing overall efficiency.
4. Survey respondents are targeting improvement in personal and organizational skills such as negotiation, Six Sigma and dealing with confrontation to help them successfully address functional priorities.
1 The concept of competitive intelligence is addressed more comprehensively in Protiviti’s white paper, “Maximizing the Value of Competitive Intelligence,” available at www.protiviti.com/earlymover.
2 2012 Finance Priorities Survey
Throughout the survey findings, it is clear that respondents have prioritized strategic capabilities – including those related to operational metrics, competitive intelligence, customer profitability analysis and reporting, among others – over more transactional activities. That said, highly complex transactional activities, such as complying with international/transfer pricing, also represent key concerns. Combined, these priorities place growing pressure on all finance functions to make transactional work, such as transaction processing and performance of account reconciliations, as standardized, automated and well-governed as possible. Doing so frees up finance resources to concentrate more on adding strategic value to the organization.
Please note that this year’s Finance Priorities Survey includes the addition of a number of new competencies and skill areas. Last year’s survey was the first of this research series. We made adjustments based on feedback and suggestions from the market. Additionally, we revised our 2012 survey instrument to reflect current market conditions, specifically in the areas of financial transactions and analysis.
We are confident the results from our Finance Priorities Survey will be of interest to chief financial officers and other finance executives as well as the finance community at large. In addition, we anticipate a high level of interest in the survey among board members and other C-level executives seeking to understand the strengths of finance functions and areas of priority in terms of growth and development. We are very appreciative and grateful for the time spent by the finance executives and professionals who participated in our survey.
Protiviti July 2012
ACKNOWLEDGEMENTSWe would like to express our thanks to True Partners Consulting and WTAS for their insights and contributions to this study.
3 2012 Finance Priorities Survey
RESULTS AND ANALYSIS
Process Capabilities (Financial Transactions)
Key Findings – 2012 • Strengthening financial risk management capabilities is a top priority in 2012 amid ongoing
macroeconomic uncertainty (this also was a top concern in the 2011 survey).
• Another clear priority is ensuring tax compliance while lessening the organization’s overall tax burden.
• Chargeback allocation methodology, overall shared services governance and performance management/operating metrics rank as top priorities, suggesting that finance functions are seeking to increase overall performance and generate as much value as possible from shared services centers while also increasing the support levels they provide to operational partners/internal customers.
• Although survey respondents generally rate their competency at performing highly transactional activities, such as account reconciliations, higher than more strategic activities (such as mergers and divestitures), the findings suggest that increasing the efficiency of transactional activities remains critical, as doing so can free up finance resources to devote to higher-value and more strategic concerns.
Table 1: Overall Results, Process Capabilities (Financial Transactions)
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1Financial risk management (hedging, credit risk, FX risk, interest rate risk,
etc.) 2.9
2 Chargeback allocation methodology 2.9
3 Overall shared services governance 2.9
4 Performance management/operating metrics 3.2
5 Foreign taxes 2.2
6(tie)
Tax processing (sales and use tax, 1099, T&E tax coding, etc.) 3.3
Service-level agreements 3.0
8(tie)
Tax planning/forecasting 2.6
State or jurisdiction taxes 2.6
Mergers and divestitures 2.9
Customer management (internal and external) 3.1
4 2012 Finance Priorities Survey
NEED TO IMPROVELOWER HIGHER
COM
PETE
NCY
LOW
ERHI
GHER
4
32 1
5
6
710
11
12
13
1415
1718
19
20
21
22
24
2326
27
282930
31
323334
3536
37
38
25
89
16
Number Process Capabilities (Financial Transactions) Number Process Capabilities (Financial Transactions)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Financial risk management (hedging, credit risk, FX risk, interest rate risk, etc.)
Chargeback allocation methodology
Overall shared services governance
Performance management/operating metrics
Foreign taxes
Tax processing (sales & use tax, 1099, T&E tax coding, etc.)
Service-level agreements
Tax planning/forecasting
State or jurisdiction taxes
Mergers and divestitures
Customer management (internal and external)
Cash forecasting
In-country taxes
Working capital management
Debt and other investments
Non-conformance
Issue escalation
Contract management
Overall customer service
Fixed asset accounting
Activity-based costing
Cost allocation
Banking relationships
Month-end close
Quarterly close
Project accounting
Pricing
Travel and entertainment reimbursement
Annual close
Account reconciliations
Standard costing
Time capture and reporting
Payroll tax processing
Payroll processing
Invoicing/billing
Accounts receivable
Accounts payable
Variance analysis
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
Figure 1: Process Capabilities (Financial Transactions) – Perceptual Map
5 2012 Finance Priorities Survey
Respondents were asked to assess, on a scale of one to five, their competency in 38 areas of process capabilities focusing on financial transactions, with one being the lowest level of competency and five being the highest. They were then asked to indicate whether they believe they possess an adequate level of competency or if they need to improve, taking into account the circumstances of their organization and industry. (For the Financial Transaction Process Capabilities under consideration, see page 4.) Figure 1 depicts a comparison of “Need to Improve” versus “Competency” ratings in a Process Capabilities (Financial Transactions) landscape.
Financial risk management (FRM) stands out as a top priority in this year’s survey, just as it was in the 2011 study. The sustained importance of FRM reflects ongoing macroeconomic volatility that frequently causes intense uncertainty regarding credit risk, liquidity risk and market risk.
FRM represents a highly strategic and complex activity. Throughout the survey, in fact, respondents consistently rated activities that are more strategic and complex in nature as higher priorities than transactional activities such as accounts payable, accounts receivable and payroll processing. For example, survey respondents place a relatively high priority on improving their management of mergers and divestitures as well as the finance function’s work in developing operating metrics to manage performance. However, the issue still remains that several organizations have yet to fully adopt a strategy focused on automating pure transactional processes and thus driving manual activity around business processes like accounts payable, month-end activities and accounts receivable. Organizations may reflect positively on the overall effectiveness of these processes, but the efficiency and effort to make them effective dramatically increase the cost of these functions compared to implementing some level of automation.
While this weighting makes sense – finance functions contribute the greatest value to the organization through their strategic capabilities – it should not diminish the importance of continuously improving transactional processes. It is notable, for example, that account reconciliations as well as the closing process (month-end, quarter-end and annual) figure as priorities even though survey respondents indicated their finance functions perform these processes with a relatively high level of competency. By further standardizing and automating account reconciliation and other transactional processes, finance functions not only drive greater efficiency, but can also devote more resources, time and attention to FRM and other strategic activities.
Also, foreign taxes, tax processing and tax planning/forecasting rank as higher priorities given the complex and fluid nature of tax policy, as well as the growing global footprint of most companies.
Lastly, finance executives and professionals identified several shared-services-related activities as key priorities, including chargeback allocation methodology, overall shared service governance and better management around service-level agreements. These findings suggest finance organizations that have existing shared services in place are now committed to improving these capabilities and implementing a stronger service management framework. Doing so means increased utilization of performance metrics, implementing simplified service-level agreements that ensure these metrics are better managed, and a transparent costing methodology driving consistent and fair economics. Likewise, as shared service capabilities mature, eliminating “shadow process activity” in the field where duplicate processing typically occurs will be vital for continuous improvement and achieving full maturation within a shared services model.
Key Questions to Consider:• How knowledgeable of, and comfortable with, the organization’s FRM capability is the board of directors?
How can the company’s FRM capability become more forward-looking and responsive?
• How can internal tax policies and the procedures that translate those policies into practice be improved to address frequent changes by relevant tax authorities as well as the company’s entrance into new markets?
• How can we continue to drive greater efficiency (via standardization, automation and additional process improvements) among the finance function’s highly transactional processes?
6 2012 Finance Priorities Survey
• How can finance shared services move beyond a “lift and shift” process centralization approach and deliver greater value through a “true” shared services model managed by performance and governed via service-level agreements?
Table 2: Overall Results, Process Capabilities (Financial Transactions) – Two-Year Comparison*
2012 2011
Financial risk management Financial risk management
Chargeback allocation methodology Foreign taxes
Overall shared services governance Tax planning
Performance management/operating metrics Project accounting time tracking
Foreign taxes Tax processing
Tax processing In-country taxes
Service-level agreements State or jurisdiction taxes
Tax planning/forecasting Cash forecasting
State or jurisdiction taxes Debt and other investments
Mergers and divestitures Project budget to actual reporting
Customer management
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• Financial risk management continues to be a consistent priority within finance transactions.
• Chargeback allocation methodology and overall shared services governance – new additions to the survey – were ranked high as priorities and areas for improvement.
• Consistent with last year, tax-related competencies also rank as top areas of priority.
YEAR-OVER-YEAR RESULTS
7 2012 Finance Priorities Survey
Table 3: Finance Executive Results, Process Capabilities (Financial Transactions)
FOCUS ON CFOs AND OTHER FINANCE EXECUTIVES2
The priorities in this category for CFOs and other finance executives are largely similar to those identified by all survey respondents. However, it still remains clear that the most urgent priorities with senior finance leadership include:
• Managing overall business risk from a financial and external market perspective, and hedging currency fluctuations, interest rate and cash flow management.
• Increasing capacity and efficiency surrounding the back office, eliminating concern around non-core business processing and increasing focus on financial analysis and business-planning capabilities.
• Enhancing focus around working capital management practices, better managing cash flow throughout an organization and understanding the impact on the financial bottom line.
2 Includes responses from CFOs and vice president-level executives.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1Financial risk management (hedging, credit risk, FX risk, interest rate risk,
etc.) 3.2
2 Overall shared services governance 3.2
3(tie)
Chargeback allocation methodology 3.2
State or jurisdiction taxes 2.9
5 Foreign taxes 2.5
6(tie)
Activity-based costing 3.4
Contract management 3.2
Non-conformance 3.0
9(tie)
Fixed asset accounting 3.9
Working capital management 4.0
8 2012 Finance Priorities Survey
Table 4: Finance Executive Results, Process Capabilities (Financial Transactions) – Two-Year Comparison*
2012 2011
Financial risk management Financial risk management
Overall shared services governance Tax planning
Chargeback allocation methodology Foreign taxes
State or jurisdiction taxes Month-end close
Foreign taxes Manual journal entries
Activity-based costing Account reconciliations
Contract management Pricing
Non-conformance Financial consolidations and eliminations
Fixed asset accounting Travel and entertainment reimbursement
Working capital management Tax processing
Leave, overtime and other employee time reporting
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• Similar to the overall results, financial risk management continues to stand out as a top priority for CFOs
and finance executives.
• Tax-related areas, along with overall shared services governance and chargeback allocation methodology (which were added to the 2012 survey) also rank as top areas of concern for this group.
9 2012 Finance Priorities Survey
FOCUS ON LARGE COMPANIES (>US$1 BILLION)Survey respondents from large companies identified similar priorities, with two notable exceptions: Improving cash-forecasting capabilities and mergers and divestitures rank as higher priorities compared to the overall survey response.
Table 5: Large Company Results, Process Capabilities (Financial Transactions)
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1Financial risk management (hedging, credit risk, FX risk, interest rate risk,
etc.) 2.7
2(tie)
Performance management/operating metrics 2.9
Chargeback allocation methodology 2.8
Overall shared services governance 2.7
5(tie)
Cash forecasting 3.0
Mergers and divestitures 2.8
7(tie)
Service-level agreements 2.8
Tax planning/forecasting 2.4
Customer management (internal and external) 2.9
10 Foreign taxes 2.1
10 2012 Finance Priorities Survey
Table 6: Large Company Results, Process Capabilities (Financial Transactions) – Two-Year Comparison*
2012 2011
Financial risk management Financial risk management
Performance management/operating metrics Foreign taxes
Chargeback allocation methodology Project budget to actual reporting
Overall shared services governance Tax processing
Cash forecasting Project accounting time tracking
Mergers and divestitures Cash forecasting
Service-level agreements Debt and other investments
Tax planning/forecasting Tax planning
Customer management State or jurisdiction taxes
Foreign taxes Project accounting expense tracking
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• Foreign taxes fell as a priority from second in 2011 to tenth this year.
• Similar to other groups in the survey, financial risk management ranks as a top priority for finance functions in large companies. However, unlike other groups in the survey, respondents from large companies did not rank many tax-related areas to be among their top priorities and areas for improvement.
11 2012 Finance Priorities Survey
Process Capabilities (Financial Analysis)
Key Findings – 2012 • Finance functions want to strengthen competitive intelligence capabilities to equip executive teams with a
more holistic, and actionable, blend of internal and external strategic insights.
• Performance management and business intelligence remain top priorities, suggesting that finance functions are being asked to provide better information to the enterprise in a more proactive manner.
• Profitability analysis and reporting efforts are maturing beyond channel profitability to focus in a more detailed fashion on product and customer profitability.
Table 7: Overall Results, Process Capabilities (Financial Analysis)
Respondents were asked to assess, on a scale of one to five, their competency in 22 areas of process capabilities focusing on financial analysis, with one being the lowest level of competency and five being the highest. For each area, they were then asked to indicate whether they believe they possess an adequate level of competency or if they need to improve, taking into account the circumstances of their organization and industry. (For the Financial Analysis Process Capabilities under consideration, see page 12.) Figure 2 depicts a comparison of “Need to Improve” versus “Competency” ratings in a Process Capabilities (Financial Analysis) landscape.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Competitive intelligence (competitor, customer, geopolitical, etc.) 2.9
2(tie)
Business intelligence (operations reporting) 3.2
Executive dashboards/scorecards 3.2
4 Profitability analysis (product, customer, channel, etc.) 3.3
5 Profitability reporting – customer 2.9
6 Strategic planning 3.2
7(tie)
Performance management 3.4
Profitability reporting – product 3.0
9(tie)
Profitability reporting – channel 2.9
Periodic forecasting 3.5
Ad hoc reporting 3.2
12 2012 Finance Priorities Survey
NEED TO IMPROVELOWER HIGHER
4 32
15
6
710
11
12
13
14
15
17
1619
20
21
22
89
18
Number Process Capabilities (Financial Analysis) Number Process Capabilities (Financial Analysis)
1
2
3
4
5
6
7
8
9
10
11
Competitive intelligence (competitor, customer, geopolitical, etc.)
Business intelligence (operations reporting)
Executive dashboards/scorecards
Profitability analysis (product, customer, channel, etc.)
Profitability reporting – customer
Strategic planning
Performance management
Profitability reporting – product
Profitability reporting – channel
Periodic forecasting
Ad hoc reporting
Multiyear budget
Margin management
Annual budget
Ad hoc nonfinancial reporting
Controls reporting
Other statistical reporting
Profitability reporting – segment
Project management
COSO ERM framework
Board of directors financial reporting
External reporting (10-Q, 10-K, 8-K, proxy and other shareholder)
12
13
14
15
16
17
18
19
20
21
22
COM
PETE
NCY
LOW
ERHI
GHER
Figure 2: Process Capabilities (Financial Analysis) – Perceptual Map
13 2012 Finance Priorities Survey
As senior management teams dedicate more attention to external market opportunities, threats and information, survey respondents indicated that their finance functions fulfill a valuable partnership role in these efforts. Specifically, finance executives and professionals cited competitive intelligence more than any other capability as an area they intend to strengthen. (Competitive intelligence is a new competency in the Finance Priorities Survey – it has been added based on feedback received on last year’s study as well as emerging market trends denoting the increasing importance of a strong competitive intelligence function.)
A robust competitive intelligence capability enables companies to scrutinize the external landscape continually for information that can equip decision-makers with the grist they need to identify new growth opportunities and minimize and/or avoid strategic risks. This priority also explains why a related capability, strategic planning, figures as a top 10 issue among survey respondents. By strengthening their company’s competitive intelligence proficiency, finance functions can expect to deepen their involvement in strategic planning activities.
The fact that business intelligence (operations reporting), executive dashboards/scorecards and performance management figure as key priorities suggests that CFOs and their finance teams are taking on greater responsibility for financial and operational reporting. Indeed, top-performing companies – or “Early Movers” 3 – frequently rely on their finance functions to produce, monitor and share integrated analytics. These include a blend of leading indicators (e.g., competitive intelligence) and lagging indicators (e.g., performance management insights) culled from a broad portfolio of internal and external data sources.
This data, once it is transformed into actionable insights, must be shared in a highly efficient manner. The finance function’s executive and operational colleagues, who are awash in data, want to know the handful of key indicators that have the greatest impact on the organization’s performance.
Survey respondents also identified profitability reporting and analysis activities as priority areas, which reflects a pervasive desire to combat margin pressure amid ongoing economic uncertainty and volatility. While many organizations can monitor and manage channel profitability, survey respondents indicated a desire to advance this capability to evaluate and manage profitability at the individual product level and at the customer level. This visibility, driven by the finance function’s data management and analytical skills, can help companies understand, for example, when high-volume customers also figure as the lowest-margin customers.
Key Questions to Consider:• To what extent can your finance function track external factors and translate them into actionable
information that strategic decision-makers need to exploit new opportunities and/or address new threats?
• Are your organization’s business intelligence and performance management processes producing a sufficiently integrated collection of analytics (e.g., financial and operational analytics; internal and external analytics)?
• Are the finance function’s financial and operational performance reports easy to understand, and do executive and operational colleagues consider the reports required reading?
• Are your organization’s profitability analysis and reporting activities maturing to include actionable insights at the product and customer levels?
3 For more information, visit www.protiviti.com/earlymover.
14 2012 Finance Priorities Survey
YEAR-OVER-YEAR RESULTS
Table 8: Overall Results, Process Capabilities (Financial Analysis) – Two-Year Comparison*
2012 2011
Competitive intelligence KPI development
Business intelligence Operational/productivity reporting
Executive dashboards/scorecards Controls reporting
Profitability analysis Project management
Profitability reporting – customer Other statistical reporting
Strategic planning COSO ERM framework
Performance management Ad hoc nonfinancial reporting
Profitability reporting – product Board of directors financial reporting
Profitability reporting – channel Disclosure committee financial reporting
Periodic forecasting Multiyear budget
Ad hoc reporting
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• Several new additions to this category – competitive intelligence, business intelligence, executive
dashboards/scorecards and profitability analysis, among other areas – rose to the top of the list in this year’s survey.
• A number of high-ranking areas from last year’s survey, including controls reporting, project management and the COSO ERM framework, among others, fell from the top 10 priority areas.
15 2012 Finance Priorities Survey
Table 9: Finance Executive Results, Process Capabilities (Financial Analysis)
FOCUS ON CFOs AND OTHER FINANCE EXECUTIVES4
CFOs and finance executives identified similar priorities compared to the overall survey response. Of note:
• Business intelligence and performance management dominate the priorities of CFOs as organizations increasingly rely on finance functions for financial and operational reporting.
• The need to monitor external events and markets is making competitive intelligence a top area of concern.
• The focus on protecting and enhancing margins continues in today’s challenging market, with profitability analysis and reporting being high on the CFO’s priority list.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Business intelligence (operations reporting) 3.5
2 Competitive intelligence (competitor, customer, geopolitical, etc.) 3.2
3 Executive dashboards/scorecards 3.5
4 Profitability reporting – customer 3.3
5 Performance management 3.6
6 Profitability reporting – channel 3.2
7 Profitability analysis (product, customer, channel, etc.) 3.5
8(tie)
COSO ERM framework 3.0
Controls reporting 3.4
Ad hoc nonfinancial reporting 3.4
4 Includes responses from CFOs and vice president-level executives.
16 2012 Finance Priorities Survey
Table 10: Finance Executive Results, Process Capabilities (Financial Analysis) – Two-Year Comparison*
2012 2011
Business intelligence Operational/productivity reporting
Competitive intelligence KPI development
Executive dashboards/scorecards Ad hoc nonfinancial reporting
Profitability reporting – customer Other statistical reporting
Performance management Project management
Profitability reporting – channel Controls reporting
Profitability analysis Multiyear budget
COSO ERM framework COSO ERM framework
Controls reporting Customer reporting
Ad hoc nonfinancial reporting Variance analysis
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• For CFOs and finance executives, the COSO ERM framework continues to rank among their top priority
areas.
• The results suggest that ad hoc financial reporting is not as great of a concern for finance executives compared to last year.
17 2012 Finance Priorities Survey
Table 11: Large Company Results, Process Capabilities (Financial Analysis)
FOCUS ON LARGE COMPANIES (>US$1 BILLION)Among the notable findings:
• As previously stated, finance functions are increasingly taking a lead role in monitoring external events and markets, with large companies placing the need for better competitive intelligence capabilities at the top of their priority lists.
• The finance function is being looked upon as an increasingly influential partner in the strategic planning process within large companies, as evidenced by this capability’s high ranking for improvement.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Competitive intelligence (competitor, customer, geopolitical, etc.) 2.8
2 Strategic planning 3.0
3 Profitability reporting – product 2.9
4(tie)
Profitability analysis (product, customer, channel, etc.) 3.2
Business intelligence (operations reporting) 3.1
6(tie)
Executive dashboards/scorecards 3.2
Profitability reporting – customer 2.8
8 Periodic forecasting 3.3
9(tie)
Performance management 3.4
Ad hoc reporting 3.0
18 2012 Finance Priorities Survey
Table 12: Large Company Results, Process Capabilities (Financial Analysis) – Two-Year Comparison*
2012 2011
Competitive intelligence KPI development
Strategic planning Operational/productivity reporting
Profitability reporting – product Board of directors financial reporting
Profitability analysis Project management
Business intelligence Period forecast
Executive dashboards/scorecards Other statistical reporting
Profitability reporting – customer COSO ERM framework
Periodic forecasting Controls reporting
Performance management Ad hoc nonfinancial reporting
Ad hoc reporting Multiyear budget
* Certain competencies and skill areas in this category were not included in both years of the survey.
NOTABLE TRENDS• Similar to the overall results, new competencies in this category – including competitive intelligence,
strategic planning, and profitability reporting and analysis – stand out as top priorities and areas for improvement.
• Board of directors financial reporting and project management are among areas that dropped significantly as priorities in this year’s survey compared to the 2011 study.
19 2012 Finance Priorities Survey
Technical Capabilities
Key Findings – 2012 • Given the furious pace of change regarding business regulations, accounting standards and tax rules – as well as
the ongoing convergence of International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (GAAP) – finance functions have a growing “readiness” need.
• Reporting uncertainties to the Internal Revenue Service (IRS), fair value accounting, international/transfer pricing regulations and IFRS/GAAP convergence projects are among the top areas of priority for finance functions.
Respondents were asked to assess, on a scale of one to five, their competency in 24 areas of technical capabilities in finance, with one being the lowest level of competency and five being the highest. For each area, they were then asked to indicate whether they believe they possess an adequate level of knowledge or if they need to improve, taking into account the circumstances of their organization and industry. (For the Technical Capabilities under consideration, see page 20.) Figure 3 depicts a comparison of “Need to Improve” versus “Competency” ratings in a Technical Capabilities landscape.
Table 13: Overall Results, Technical Capabilities
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Reporting uncertainties to the IRS (new regulations) 2.2
2(tie)
Fair Value Accounting (ASC 825 – formerly FAS 159, Fair Value Option for Financial Assets and Liabilities)
3.0
International/transfer pricing regulations 2.2
International Financial Reporting Standards/GAAP convergence projects 2.7
5(tie)
Readiness for adopting new and impending accounting pronouncements 3.1
FASB Accounting Standards Codification – impact on both research capabilities and disclosures
2.9
7(tie)
U.S. tax laws 2.6
Domestic regulations 2.5
9 Reporting uncertainties – external reporting 2.5
10International cash/earnings repatriation – compliance and accounting
implications 2.2
20 2012 Finance Priorities Survey
NEED TO IMPROVELOWER HIGHER
4
3
2
1
5
6
7
10
11
12
13
14
1517
18
1920
21
22
89
16
24
23
COM
PETE
NCY
LOW
ERHI
GHER
Figure 3: Technical Capabilities – Perceptual Map
Number Technical Capabilities Number Technical Capabilities
1 Reporting uncertainties to the IRS (new regulations) 13 Business combinations
2Fair Value Accounting (ASC 825 – formerly FAS 159, Fair Value Option for Financial Assets and Liabilities)
14Proxy rules, including risk and compensation disclosures
3 International/transfer pricing regulations 15SEC's 2007 Interpretive Guidance regarding Section 404 of the Sarbanes-Oxley Act
4International Financial Reporting Standards/GAAP convergence projects
16 PCAOB Auditing Standard No. 5
5Readiness for adopting new and impending accounting pronouncements
17SEC Staff Accounting Bulletin (SAB) No. 104: Revenue Recognition Criteria for SEC Registrants
6FASB Accounting Standards Codification – impact on both research capabilities and disclosures
18Sarbanes-Oxley Section 404 (Internal control over financial reporting) *
7 U.S. tax laws 19Sarbanes-Oxley Section 301 (Complaints regarding accounting, internal controls or auditing matters) *
8 Domestic regulations 20Sarbanes-Oxley Section 302 (Disclosure controls and procedures) *
9 Reporting uncertainties – external reporting 21 Revenue recognition – multiple element deliverables
10International cash/earnings repatriation – compliance and accounting implications
22 Regulation S-K & S-X requirements
11 Extensible business reporting language (XBRL) 23 Revenue recognition – general
12Stock-based compensation (ASC 718 or ASC 505-50 – formerly FAS 123R share-based payments)
24 Segment reporting
* Or local country equivalent.
21 2012 Finance Priorities Survey
Given the intensely complex nature of nearly all of the priorities survey respondents identified in this section of the survey, the underlying takeaway from these results is surprisingly straightforward and practical: To address in an effective manner the never-ending procession of global regulatory and tax-policy changes, finance functions want to strengthen their readiness. This readiness capability requires increasing the supply of expertise – internally and/or externally – available to:
• Monitor and understand pending accounting pronouncements.
• Create new policies concerning relevant regulatory and accounting rules changes.
• Ensure that these new policies are transformed into procedures that the rest of the enterprise understands and follows.
WTAS (www.wtas.com), an independent U.S. tax firm, notes, “The results of the survey, in particular the tax items shown as priorities as well as the related technical capabilities, reflect the increased level of focus on accounting for income taxes that has evolved in recent years. Jurisdictional concerns and the complexity of doing business domestically and internationally demand that companies provide more detailed reporting and disclosures. The result is more comprehensive and complex tax reporting within the quarterly and annual financial statements, including additional risk analysis and transparency. Recent case law, audit activity by taxing authorities, SEC comments and IRS guidance have heightened the focus on these key areas. The technical application of detailed rules in our self-reporting environment is demanding a higher level of skill from existing personnel within the accounting/tax function. Management recognizes these responsibilities and trends as well as the need to monitor the quality of its reporting in our ever-changing environment.”
Accessing and deploying the necessary expertise to address these areas can be a challenge for companies of all sizes. Smaller organizations may have difficulty justifying the expense of keeping that expertise on staff, while larger companies must strike the right balance between devoting too many full-time resources to this type of readiness while remaining prepared to respond with sufficient expertise when the level of new accounting pronouncements and related regulatory changes increases. Regardless of company size, the survey results show that readiness represents a crucial requirement.
Other priorities identified in this section of the survey reflect current regulatory and policy changes and requirements that companies must address. For example, reporting uncertainties to the IRS (a top priority, according to the results) requires corporate finance, accounting and tax functions to balance how to address the required financial reporting of uncertain tax positions with the resulting impact it has on the disclosures that are part of the federal tax return for that year. The standard, originally intended to eliminate inconsistency in accounting for uncertain tax positions in financial statements, continues instead to generate significant uncertainty within corporate finance and accounting functions.
According to True Partners Consulting LLC (www.tpctax.com), a tax and business advisory firm, “The required tax return reporting of uncertain tax positions to the IRS has been evolving for over two years as the IRS has responded to the tax community’s comments on the original proposals. While the IRS has reduced the amount of reporting originally outlined, the required concise descriptions of the uncertain tax positions still contain sufficient detail to allow identification of the items that the taxpayer has recorded for financial statement purposes.”
In addition, top priorities for finance executives and professionals this year include fair value accounting, international/transfer pricing regulations and IFRS/GAAP convergence projects. International/transfer pricing requirements often call for external expertise from tax consulting firms (and, in many cases, from economists). The demand for this expertise is growing, according to the study: In last year’s survey, international/transfer pricing requirements ranked eighth among the areas in need of improvement. In 2012, this area has been elevated to a top-three concern.
22 2012 Finance Priorities Survey
True Partners Consulting observes, “It is not surprising to find that transfer pricing continues to be a high priority for finance and tax executives. As the business world becomes more global, transfer pricing becomes a more important component of a company’s finances. At the same time, the existing regulatory regimes are enacting more complex regulations and stepping up enforcement in an effort to increase tax revenues. Developing countries have also enacted or are enacting regulations that are not always in step with those of the industrialized countries, further complicating the regulatory landscape. Because transfer pricing, now more than ever, requires specialized skills, it continues to be an area where companies do not have the necessary level of competency and require the use of external consultants.”
On the IFRS front, IFRS/GAAP convergence continues to move ahead and may even beat the SEC’s eventual IFRS compliance timeline in certain key areas such as revenue recognition and lease accounting. The convergence calendar, because it changes GAAP, will continue to affect private and public companies as it unfolds. Again, since convergence of U.S. GAAP and IFRS already is underway in significant areas such as revenue recognition, now is the time for companies to begin formulating the steps they must take to ensure that the transition to IFRS is as seamless, effective and cost-efficient as possible.5
Key Questions to Consider:• What is the overall state of the finance function’s readiness to respond (with internal policy and procedure
guidance) to new accounting pronouncements as well as tax and regulatory changes that affect accounting and financial reporting processes?
• Does your organization have a clear plan of action for the convergence of IFRS and U.S. GAAP (as well as for adopting IFRS)?
• Does your function possess the expertise to address international/transfer pricing regulations as well as other new business regulations and tax rules (both foreign and domestic)?
• Are CFOs and other finance executives and their managers and professional staff on the same page regarding financial reporting areas of priority identified in the survey results, and revenue recognition issues, in particular?
5 For more information on IFRS, read Protiviti’s Guide to International Financial Reporting Standards: Frequently Asked Questions (Second Edition), available at www.protiviti.com.
23 2012 Finance Priorities Survey
YEAR-OVER-YEAR RESULTS
Table 14: Overall Results, Technical Capabilities – Two-Year Comparison
2012 2011
Reporting uncertainties to the IRS International Financial Reporting Standards
Fair value accounting Extensible business reporting language (XBRL)
International/transfer pricing regulations Readiness for adopting new and impending accounting
pronouncementsInternational Financial Reporting Standards/GAAP
convergence projects Fair value accounting
Readiness for adopting new and impending accounting pronouncements
Reporting uncertainties to the IRS
FASB Accounting Standards Codification FASB Accounting Standards Codification
U.S. tax laws U.S. tax laws
Domestic regulations International/transfer pricing regulations
Reporting uncertainties – external reporting New proxy rules, including risk and compensation
disclosuresInternational cash/earnings repatriation – compliance
and accounting implicationsSEC's 2007 Interpretive Guidance Regarding Section 404
of the Sarbanes-Oxley Act
NOTABLE TRENDS• The results show that reporting uncertainties to the IRS and international/transfer pricing regulations have
increased as priorities for finance executives and professionals.
• While still important, IFRS showed a year-over-year drop as an area of priority – this is understandable given the delays in IFRS adoption and discussions around convergence, all of which have caused the level of urgency to subside somewhat.
24 2012 Finance Priorities Survey
FOCUS ON CFOs AND OTHER FINANCE EXECUTIVES6 In this survey category, CFOs and other finance executives identified priorities similar to those identified by all respondents, with two exceptions. Senior finance executives appear more concerned about one of the most common and important regulatory risks in the United States: revenue recognition (as addressed in financial reporting and presented on financial statements). CFOs and other finance executives identified the SEC’s Interpretive Guidance regarding Section 404 of the Sarbanes-Oxley Act and SEC Staff Accounting Bulletin (SAB) No. 104: Revenue Recognition Criteria for SEC Registrants as top priorities. Given these differences, it would behoove finance executives as well as their staffs to ensure both levels of the finance function stay on the same page in terms of addressing these priorities.
Table 15: Finance Executive Results, Technical Capabilities
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1SEC Staff Accounting Bulletin (SAB) No. 104: Revenue Recognition Criteria
for SEC Registrants 3.4
2 International Financial Reporting Standards/GAAP convergence projects 2.9
3(tie)
FASB Accounting Standards Codification – impact on both research capabilities and disclosures
3.2
Reporting uncertainties to the IRS (new regulations) 2.4
5SEC's 2007 Interpretive Guidance regarding Section 404 of the Sarbanes-
Oxley Act 3.1
6Stock-Based Compensation (ASC 718 or ASC 505-50 – formerly FAS 123R
Share-Based Payments) 3.1
7(tie)
Readiness for adopting new and impending accounting pronouncements 3.3
International/transfer pricing regulations 2.6
9 Reporting uncertainties – external reporting 3.0
10(tie)
Proxy rules, including risk and compensation disclosures 3.0
Sarbanes-Oxley Section 301 (Complaints regarding accounting, internal controls or auditing matters)
3.1
Sarbanes-Oxley Section 302 (Disclosure controls and procedures) 3.3
PCAOB Auditing Standard No. 5 (An Audit of Internal Control Over Financial Reporting That Is Integrated With An Audit of Financial Statements)
3.0
6 Includes responses from CFOs and vice president-level executives.
25 2012 Finance Priorities Survey
Table 16: Finance Executive Results, Technical Capabilities – Two-Year Comparison
2012 2011
SEC Staff Accounting Bulletin (SAB) No. 104: Revenue Recognition Criteria for SEC Registrants
Readiness for adopting new and impending accounting pronouncements
International Financial Reporting Standards/GAAP convergence projects
International Financial Reporting Standards
FASB Accounting Standards Codification Business combinations
Reporting uncertainties to the IRS FASB Accounting Standards Codification
SEC's 2007 Interpretive Guidance regarding Section 404 of the Sarbanes-Oxley Act
Reporting uncertainties to the IRS
Stock-Based Compensation (ASC 718 or ASC 505-50 – formerly FAS 123R Share-Based Payments)
PCAOB Auditing Standard No. 5
Readiness for adopting new and impending accounting pronouncements
Fair value accounting
International/transfer pricing regulations Extensible Business Reporting Language (XBRL)
Reporting uncertainties – external reporting Reporting uncertainties – external reporting
Proxy rules, including risk and compensation disclosures SEC's 2007 Interpretive Guidance Regarding Section 404
of the Sarbanes-Oxley Act
Sarbanes-Oxley Section 301
Sarbanes-Oxley Section 302
PCAOB Auditing Standard No. 5
NOTABLE TRENDS• SAB No. 104, a new addition to the 2012 survey, rose to the top of the list of priorities for finance
executives.
• Interestingly, IFRS remains an area in need of improvement for this group, as does the SEC’s Interpretive Guidance for Sarbanes-Oxley Section 404.
26 2012 Finance Priorities Survey
Table 17: Large Company Results, Technical Capabilities
FOCUS ON LARGE COMPANIES (>US$1 BILLION)The priorities cited by respondents from larger companies differ from those who work for small to midsize companies in one regard: The latter organizations appear more concerned about IFRS/GAAP convergence, identifying this competency as a higher priority than their counterparts at larger companies (which typically have more resources to assign to convergence issues).
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Reporting uncertainties to the IRS (new regulations) 2.0
2 International/transfer pricing regulations 2.1
3 Business combinations 3.1
4 Reporting uncertainties – external reporting 2.3
5(tie)
Readiness for adopting new and impending accounting pronouncements 2.9
U.S. tax laws 2.5
Domestic regulations 2.4
Stock-based compensation (ASC 718 or ASC 505-50 – formerly FAS 123R Share-Based Payments)
2.6
9(tie)
Fair Value Accounting (ASC 825 – formerly FAS 159, Fair Value Option for Financial Assets and Liabilities)
2.9
FASB Accounting Standards Codification – impact on both research capabilities and disclosures
2.8
27 2012 Finance Priorities Survey
Table 18: Large Company Results, Technical Capabilities – Two-Year Comparison
2012 2011
Reporting uncertainties to the IRS (new regulations) International Financial Reporting Standards
International/transfer pricing regulations Fair value accounting
Business combinations Reporting uncertainties to the IRS
Reporting uncertainties – external reporting Domestic regulations
Readiness for adopting new and impending accounting pronouncements
Readiness for adopting new and impending accounting pronouncements
U.S. tax laws SEC's 2007 Interpretive Guidance Regarding Section 404
of the Sarbanes-Oxley Act
Domestic regulations Extensible business reporting language (XBRL)
Stock-based compensation (ASC 718 or ASC 505-50 – formerly FAS 123R Share-Based Payments)
Sarbanes-Oxley Section 301
Fair Value Accounting (ASC 825 – formerly FAS 159, Fair Value Option for Financial Assets and Liabilities)
FASB Accounting Standards Codification
FASB Accounting Standards Codification U.S. tax laws
NOTABLE TRENDS• International/transfer pricing regulations is a top priority area for finance departments in large companies
after not ranking as such in the 2011 study.
• Conversely, after ranking among the top areas for improvement in 2011, IFRS and the SEC’s Interpretive Guidance for Sarbanes-Oxley Section 404 failed to crack the top 10 areas for improvement this year.
28 2012 Finance Priorities Survey
Organizational Capabilities
Key Findings – 2012 • Finance executives and professionals are looking to improve those interpersonal skills that align with the
functional priorities identified throughout the survey.
• Negotiation, Six Sigma, dealing with confrontation and leadership (in outside organizations, groups, etc.) are among the top priorities in this category.
Table 19: Overall Results, Organizational Capabilities
Respondents were asked to assess, on a scale of one to five, their competency in 23 areas of organizational capabilities, with one being the lowest level of competency and five being the highest. They were then asked to indicate whether they believe they possess an adequate level of competency or if they need to improve, taking into account the circumstances of their organization and industry. (For the Organizational Capabilities under consideration, see page 29.) Figure 4 depicts a comparison of “Need to Improve” versus “Competency” ratings in an Organizational Capabilities landscape.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Negotiation 3.2
2 Six Sigma 2.2
3 Dealing with confrontation 3.4
4(tie)
Leadership (in outside organizations, groups, etc.) 3.3
Coaching/mentoring 3.6
6(tie)
Presenting (large groups) 3.6
Leadership (within your organization) 3.7
8 Developing outside contacts/networking 3.4
9(tie)
Change management 3.3
High-pressure meetings 3.5
29 2012 Finance Priorities Survey
NEED TO IMPROVELOWER HIGHER
4
3
2
1
567
1011
1213
14
15
17
18
1920
21
22
8
9
16
23
Number Organizational Capabilities Number Organizational Capabilities
1
2
3
4
5
6
7
8
9
10
11
12
Negotiation
Six Sigma
Dealing with confrontation
Leadership (in outside organizations, groups, etc.)
Coaching/mentoring
Presenting (large groups)
Leadership (within your organization)
Developing outside contacts/networking
Change management
High-pressure meetings
Leveraging outside expertise
Networking with peers
Developing rapport with senior executives
Personnel performance evaluation
Management of outsourcing arrangements
Management of shared services
Time management
Developing rapport with business-unit executives
Written communication
Presenting (small groups)
Working effectively with regulators
Working effectively with outside parties
Working effectively with external auditors
13
14
15
16
17
18
19
20
21
22
23
COM
PETE
NCY
LOW
ERHI
GHER
Figure 4: Organizational Capabilities – Perceptual Map
30 2012 Finance Priorities Survey
The priorities survey respondents cited in this category (which primarily represent personal and interpersonal skills) both reflect and confirm all of the other priorities described in previous sections of this report. For example, respondents indicated that they intend to improve the performance metrics they develop for their operational colleagues (through business intelligence and related analytical processes). This work requires frequent and, at times, contentious interaction with operational and executive colleagues. Performance metrics must be selected, debated and agreed upon. Finance executives and professionals identified priorities – including negotiation, dealing with confrontation, presenting, leadership (within the organization) and change management – that should help them succeed in their efforts to develop more and better operational performance metrics.
Similarly, survey participants identified leadership (in outside organizations, groups, etc.) as a priority. This type of activity can help finance executives and professionals broaden their knowledge of competitive intelligence practices (another top priority discussed earlier in the report) in addition to stimulating other practices-sharing and benchmarking activities.
Continuous improvement, in the form of Six Sigma, is another area identified by survey respondents as a top priority. Once again, this intention aligns with other functionwide improvement priorities – in this case, those related to shared services performance improvements.
Key Questions to Consider:• Is your finance team acquiring, developing and maturing the interpersonal skills required to help build
functional capabilities such as competitive intelligence, business intelligence and financial risk management?
• Do you feel you have a strong network of outside experts you can consult with regularly for counsel and guidance?
• Has your company considered adopting a Six Sigma strategy in the finance function (including finance and accounting shared services centers)?
31 2012 Finance Priorities Survey
YEAR-OVER-YEAR RESULTS
Table 20: Overall Results, Organizational Capabilities – Two-Year Comparison
2012 2011
Negotiation Developing outside contacts/networking
Six Sigma Negotiation
Dealing with confrontation Dealing with confrontation
Leadership (in outside organizations, groups, etc.) Presenting (large groups)
Coaching/mentoring Time management
Presenting (large groups) High-pressure meetings
Leadership (within your organization) Leadership (in outside organizations, groups, etc.)
Developing outside contacts/networking Six Sigma
Change management Leadership (within your organization)
High-pressure meetings Networking with peers
NOTABLE TRENDS• Though the year-over-year results are relatively consistent in this category, developing outside contacts and
networking slid from the top of the 2011 list to eighth this year.
• Six Sigma, while a top-10 priority in last year’s survey, ranks second on the priority areas for improvement list in 2012.
• Coaching/mentoring and change management are among the top areas for improvement in this year’s survey after ranking below the top 10 in 2011.
32 2012 Finance Priorities Survey
FOCUS ON CFOs AND OTHER FINANCE EXECUTIVES7
The priorities concerning Organizational Capabilities identified by finance executives track relatively closely to the priorities identified by all respondents.
Table 21: Finance Executive Results, Organizational Capabilities
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Presenting (large groups) 3.6
2 Negotiation 3.5
3 Six Sigma 2.4
4 Dealing with confrontation 3.5
5(tie)
Change management 3.5
Leadership (in outside organizations, groups, etc.) 3.4
7(tie)
Developing outside contacts/networking 3.8
Leadership (within your organization) 3.9
Personnel performance evaluation 3.7
Presenting (small groups) 3.8
7 Includes responses from CFOs and vice president-level executives.
33 2012 Finance Priorities Survey
Table 22: Finance Executive Results, Organizational Capabilities – Two-Year Comparison
2012 2011
Presenting (large groups) Networking with peers
Negotiation Developing outside contacts/networking
Six Sigma Time management
Dealing with confrontation Presenting (large groups)
Change management Six Sigma
Leadership (in outside organizations, groups, etc.) Coaching/mentoring
Developing outside contacts/networking Leveraging outside expertise
Leadership (within your organization) Negotiation
Personnel performance evaluation Written communication
Presenting (small groups) Developing rapport with senior executives
Developing rapport with business unit executives
Presenting (small groups)
NOTABLE TRENDS• Dealing with confrontation ranks among the top priorities for finance executives in this year’s survey results,
as do leadership (both within the company and in outside organizations) and change management.
• Networking with peers, the top area for improvement in 2011, failed to crack the top 10 in this year’s results – nor did time management, coaching/mentoring or leveraging outside expertise.
34 2012 Finance Priorities Survey
Table 23: Large Company Results, Organizational Capabilities
FOCUS ON LARGE COMPANIES (>US$1 BILLION)Finance executives and professionals who work in larger companies appear to place greater emphasis on three competencies compared to their counterparts in other organizations: networking with peers, management of outsourcing arrangements and time management.
The emphasis on improving outsourcing reflects the maturation of finance and accounting outsourcing activities, which have become more closely integrated with internal shared services activities (and, in some cases, produce hybrid models that blend elements of shared services and traditional outsourcing arrangements). The priority placed on time management and networking is a result of increasingly competing demands finance functions face internally for their guidance and support, as well as the growing need to seek outside counsel and expertise for insights and best practices that can help finance functions thrive.
“Need to Improve”Rank Areas Evaluated by Respondents Competency
(5-pt scale)
1 Negotiation 3.2
2 Six Sigma 2.3
3(tie)
Coaching/mentoring 3.7
Dealing with confrontation 3.5
Networking with peers 3.6
6(tie)
Management of outsourcing arrangements 3.2
Time management 3.7
Developing outside contacts/networking 3.4
Personnel performance evaluation 3.7
Written communication 3.9
35 2012 Finance Priorities Survey
Table 24: Large Company Results, Organizational Capabilities – Two-Year Comparison
2012 2011
Negotiation Leadership (in outside organizations, groups, etc.)
Six Sigma Negotiation
Coaching/mentoring Dealing with confrontation
Dealing with confrontation Developing outside contacts/networking
Networking with peers High-pressure meetings
Management of outsourcing arrangements Time management
Time management Six Sigma
Developing outside contacts/networking Leadership (within your organization)
Personnel performance evaluation Coaching/mentoring
Written communication Presenting (large groups)
Networking with peers
NOTABLE TRENDS• Leadership in outside organizations, the top response in the 2011 large company results, failed to crack the
top 10 in this year’s survey – nor did high-pressure meetings or leadership within the organization.
• Management of outsourcing arrangements, a new addition to the 2012 survey, ranks among the top areas for improvement in this category.
36 2012 Finance Priorities Survey
Position
Financial Reporting Director/Manager
Chief Financial Of�cer
Corporate Controller
Vice President, Finance
Finance Staff
Assistant/Divisional Controller
Finance Process Manager
Management Consultant
Budgeting/Planning Director/Manager
Corporate Management
External Public Accountant
Audit Committee Member
Other
18%
14%
10%
9%
8%
5%
3%
3%
2%
2%
2%
1%
23%
SURVEY DEMOGRAPHICS
More than 100 finance executives and professionals participated in the survey, which was conducted online in the first and second quarter of 2012. All demographic information was provided voluntarily and not all participants provided data for every demographic question.
Size of Organization (by Gross Annual Revenue)
$20 billion or greater
$10 billion - $19.99 billion
$5 billion - $9.99 billion
$1 billion - $4.99 billion
$500 million - $999.99 million
$100 million - $499.99 million
Less than $100 million
4%
9%
3%
26%
17%
22%
19%
37 2012 Finance Priorities Survey
Industry
Financial Services
Manufacturing
Government/Education/Not-for-pro�t
Real Estate
Technology
Retail
Services
Telecommunications
Energy
Healthcare
Hospitality
Professional Services
Consumer Products
Life Sciences/Biotechnology
Media
Utilities
Distribution
Insurance
Other
14%
14%
12%
7%
7%
5%
4%
4%
3%
3%
3%
3%
3%
2%
2%
2%
1%
1%
10%
Certification
CPA/CA
CIA
CMA
CISA
Other
76%
12%
9%
5%
21%
Country of Respondents
United States
Canada
Japan
China
Italy
United Kingdom
97%
Other 1%
1%
1%
0%
0%
0%
38 2012 Finance Priorities Survey
ABOUT PROTIVITI
Protiviti (www.protiviti.com) is a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk and internal audit. Through our network of more than 70 offices in over 20 countries, we have served more than 35 percent of FORTUNE® 1000 and Global 500 companies. We also work with smaller, growing companies, including those looking to go public, as well as with government agencies.
Protiviti is a wholly owned subsidiary of Robert Half International Inc. (NYSE: RHI). Founded in 1948, Robert Half International is a member of the S&P 500 index.
Finance and Accounting Excellence Protiviti’s finance professionals help clients meet stakeholder demands by providing assistance with stabilizing and synergizing the finance organization when nonroutine situations arise, dramatically increasing process and reporting effectiveness, and building leading-edge capabilities to provide relevant information and insights to support key business decisions.
• Finance Remediation and Reporting Compliance
– Financial Reporting (Risk Profile; GAAP and SEC Advisory)
– Transaction Services
– Accounting and Reporting Research
• Finance Optimization Services
– Finance Process Improvement
– Finance Strategy
– Finance Operations (Outsourcing and Shared Services)
• Performance and Information Management
– Performance Management
– Business Intelligence
– Data/Information Governance
39 2012 Finance Priorities Survey
Other Thought Leadership from Protiviti
Visit www.protiviti.com to obtain copies of these and other thought leadership materials from Protiviti.
• GuidetoPublicCompanyReadiness:FrequentlyAskedQuestions
• GuidetoInternationalFinancialReportingStandards:FrequentlyAskedQuestions(Second Edition)
• EarlyMoverSeries
– Defining Risk Appetite
– Maximizing Competitive Intelligence
– Analyzing Strategic Risk
– Performance/Risk Integration Management Model – PRIM2: The Convergence of Corporate Performance Management and Risk Management
• ImprovingWorkingCapitalManagementandCashFlowIntelligence:BestPracticesReport(from APQC and Protiviti)
• SpreadsheetRiskManagement:FrequentlyAskedQuestions
• PowerfulInsights(Protiviti’s podcast series)
– Assessing the Current IPO Landscape
– The Convergence of IFRS and U.S. GAAP – Key Changes in Accounting and Reporting for Lease Contracts
– The Convergence of IFRS and U.S. GAAP – Key Changes in Revenue Recognition for Technology Companies
– Effective Program Management – Achieving Key Objectives on Time and on Budget
– The Move to IFRS – Start Early to Save Significant Cost, Time and Effort
– New Accounting Standards for Revenue Recognition – Accelerating to the Speed of Business
– Becoming a Public Reporting Company – Things You Need to Know
• OldNationalBank:ALeaderinPerformanceManagement
• ConfrontingtheChallengesofManualJournalEntries
• CostAllocationsandtheFinancialCloseCycle
• ImprovingtheCloseCyclebyBetterManagingCloseTasks
• Reconciliations–ASustainableApproach
• WhytheFinancialCloseMatters
• AccountingandReportingforBusinessCombinations–KeyImplementationConsiderations
• TestingtheReportingProcess–ValidatingCriticalInformation
• GuidetotheSarbanes-OxleyAct:InternalControlReportingRequirements(Fourth Edition)
• GuidetoEnterpriseRiskManagement:FrequentlyAskedQuestions
40 2012 Finance Priorities Survey
James Pajakowski Executive Vice President – Global Risk Solutions +1.312.476.6378 [email protected]
Protiviti Finance and Accounting Excellence Practice – Contact Information
CHICAGO James Pajakowski +1.312.476.6378 [email protected]
DALLASRyan Senter +1.469.374.2425 [email protected]
HOUSTONMarcus Delouche +1.713.314.4982 [email protected]
Jay Thompson +1.713.314.4923 [email protected]
MIAMIByron Traynor +1.786.264.7166 [email protected]
NEW YORKChristopher Wright +1.212.603.5434 [email protected]
SAN FRANCISCOGordon Tucker +1.415.402.3670 [email protected]
SANTA CLARASteve Hobbs +1.415.402.6913 [email protected]
WASHINGTON, D.C.Gary Callaghan +1.571.382.7228 [email protected]
© 2012 Protiviti Inc. An Equal Opportunity Employer. PRO-PKIC-0612-019 Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services.
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