It’s clear that the coronavirus pandemic has, is, and will continue to significantly impact the business world. Much of this impact has been dire: major revenue losses, store closings, layoffs and bankruptcies. Some companies, however, have surged, increasing production or launching new products to meet changing consumer demand, adding staff and expanding their footprints. Up or down, a lot has changed.
The pandemic has shown that risks can change on a dime. But strong accountants and auditors can help identify those risks and provide real-time recommendations to address them.
Enter the accountant. A trusted guardian of a company’s finances, as well as processes and systems to manage those finances, accountants have always been important. Now, they’re even more critical.
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1. Accountants help companies make the most of limited resources.
As they manage, adjust and, eventually, resurface from the pandemic, most companies will need to be smart with their finances. Accountants and corporate finance professionals will help increase efficiency by comparing pricing scenarios, evaluating investment opportunities and looking for new ways to reduce operating expenses.
2. Shifting processes bring shifting risks.
Some shifts in corporate behavior (e.g. increased reliance on digital documentation and electronic signatures, increasingly mobile and remote staff, changes to product/service delivery, etc.) will necessitate the development of new processes. Here, internal auditors will play an important role in providing assurance of operational effectiveness and efficiency as well as helping management identify, anticipate, and mitigate the risks associated with new processes.
“The pandemic has shown that risks can change on a dime,” says Lynn Dikolli, a clinical assistant professor of accounting who focuses on audit in the UNC Kenan-Flagler Master of Accounting program. “With the ability to access and analyze data and a deep understanding of how the company has shifted to meet changing conditions, the internal auditor is in perfect position to help identify enterprise, and technology-related risks in particular, and provide real-time recommendations to address those risks.”
3. Instances of fraud and cyberattacks are on the rise.
The pandemic has brought on massive increases in fraudulent behavior. The shift to remote work has created a new risk landscape and companies need to consider where they are most vulnerable. With experience helping with business continuity, crisis planning and cybersecurity, auditors will be essential partners in corporate risk management.
4. Taxes will get more complicated.
Not only has the IRS, in the wake of the pandemic, altered numerous tax provisions and rules, but reducing tax obligation will become even more critical for companies working with leaner budgets as well as those looking to expand their operations. Accountants who specialize in tax strategy will be called on to make sense of the new and ever-changing rules across local, state, federal and international jurisdictions.
“The value of tax practitioners has been amplified by COVID in recent months,” says Courtney Knoll, a clinical associate professor of accounting at UNC Kenan-Flagler and associate director of the UNC Tax Center. “Early in the pandemic, Congress passed legislation that included multiple tax provisions aimed at providing cash flow relief for businesses and individuals. Much of this relief came with significant complicity, which tax practitioners were called upon to untangle and apply with extremely limited technical support or guidance.”
5. Well-managed finances increase investor confidence.
In the best of times, companies with accountants who manage well-organized finances and audit-ready processes give shareholders and potential investors confidence as to its direction and fiscal health. Now, in a volatile economy where some industries are experiencing unprecedented hardship and others are poised to grow, the need to maintain this confidence is more critical than ever.
“The importance of talented and reliable financial accountants is heightened during times of financial upheaval,” says Stephen Glaeser, an assistant associate professor of accounting at UNC Kenan-Flagler. “Investors and managers need timely financial information more than ever, and they need to know that they can rely on this information.”
6. Big moves bring big work for accountants.
Pursuing mergers and acquisitions, filing for bankruptcy protection, building a new production facility or restructuring from the ground up are major changes, albeit ones that many companies might need to strongly consider as markets expand or contract (or evaporate completely). All of these changes require accountants and corporate finance professionals with strong technical skills and knowledge as well as the communications and leadership savvy required to collaborate with those across their organizations.
Accountants have always been in demand, serving an important function for successful companies. Now more than ever, the business community will look to accountants for their analytical insight and their stewardship of corporate finances. While the path ahead for the economy is uncertain, the role of the accountant as a critical business leader remains crystal clear.