It is fitting that this initial blog coincides with the release of our new Strategic Plan for the five-year period 2018–2023.
I am thrilled to commence a new chapter in XRB’s communication strategy by drawing attention to developments, challenges and sheer interest items by way of a regular blog. I am looking forward to sharing these matters with you, at least monthly.
Over the past three years we have adopted a rolling five-year strategic plan to avoid any significant lurches that may arise if our strategic planning was done less frequently. It is interesting, the past two years the changes to the strategic plan could be described as “fine-tuning”, still important but not “game-changing”.
This year’s update for the period 2018–2023, is bordering on meeting the game-changing tag. We find ourselves heading into a period of possible significant disruption. Yes, standard-setting in the fields of accounting and auditing & assurance could be joining the ranks of taxis (Uber), fossil fuel powered cars (Tesla and others) and single use rockets (SpaceX).
Who would have believed this three years ago?
This disruption is likely to come from a combination of the following:
- Regulator involvement;
- Technology advances, especially machine learning opportunities;
- Changes to accounting firm structures driven by regulatory pressure and business economics;
- The demand for annual external reporting to include a wider set of metrics; financial statements alone will not satisfy report user needs;
- The slow withdrawal from the globalisation initiative, and
- Possible move from principle-based international standards.
We have witnessed, and have been active in, all these fronts over the past 12 months. It has been a period of unprecedented challenge to the accepted norm of the past 20 to 30 years.
We currently perceive the greatest change will impact auditing, but accounting standard-setting is not totally unaffected.
So, with this background it is not surprising I describe our annual revision to the Plan as game-changing.
Whilst we have no crystal ball; who knows how and when all of this is going to play out, we need to be ready for some significant change over the next five years. One certainty is, our standard-setting world will alter.
So, to avoid future criticism of us being “asleep at the wheel” we have made considerable amendments to our Plan.
These can be summarised as:
- Responding to external report users’ demands, we will become more proactive in the Extended External Reporting (EER) space;
- We will grow our relationships with regional bodies of similar thinking to our own, to prepare for any adverse change to international standard-setting procedures;
- We will move ahead quickly to commence our previously signalled Post Implementation Review (PIR) on the accounting and assurance frameworks. This will ensure the frameworks, which were implemented in 2012-2014, are still meeting user needs and remain fit-for-the-future;
- We will explore establishing additional fora for constituent outreach looking at a “Lab” or “Think-tank” approaches to involve younger, more diversified (non-accounting/auditing) expertise and technology-aware individuals;
- We will enhance our communications strategy with the better use of social media to keep all interested parties aware of the changes, as they develop; and
- We will start to challenge our influencing strategies to ensure we remain effective in ensuring the standards we develop and issue, are fit for users’ needs in New Zealand.
One of the keys of this new strategy is to “take the stakeholders with us”. In a period of uncertainty, which we will obviously face until these disruptions manifest themselves, communication is king.
Our strong premise of the past decade, of working closely with international standards, being active on the principal international standard-setting boards and being strict on the need to make changes to facilitate New Zealand implementation, could be severely challenged.
One of the scary aspects of being involved in this wonderful profession for over 45 years, you experience some “back to the future” moments. I hope the time I have remaining in the profession will not see a move back to national standard-setting. It is my strongly held view, one of the “top-five” innovations I have witnessed is the development, adoption and implementation of global accounting and assurance standards.
In my humble view, any move away from this direction would be a significant retrograde step, not to mention a negative to New Zealanders economic wellbeing.
Strap in, the ride is going to be full of intrigue.
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