EY’s Financial Accounting and Advisory Services (FAAS) report, ‘Can innovative corporate reporting build trust in a volatile world?’, found that there was a lack of clarity over data ownership and governance, leading to a significant impact on reporting effectiveness.
The report surveyed more than 1,000 CFOs with revenue greater than US$500 million across 25 countries.
Australian CFOs named finance data protection as their most significant risk (46 per cent), followed by keeping pace with regulatory changes (41 per cent) and responding to the fast-changing technology environment (39 per cent).
“There is a high level of uncertainty among the finance community on how to approach the issues of data security and privacy,” said EY global FAAS leader, Peter Wollmert.
“CFOs need to ensure that they have clear governance processes in place for how they look after financial information and ensure that data is both compliant with relevant local laws and is secure – which can be a huge challenge in large and complex organisations.”
The survey also found that 49 per cent of global respondents pointed to concerns over security and compliance risks of the cloud as a major barrier to technology transformation and the implementation of innovative new technologies.
Australian CFOs were also more concerned with tax compliance, effectiveness of internal audits and the new accounting standards than their global counterparts, according to the report.
EY Oceania FAAS managing partner Patrick McLay says it is no surprise that the three areas were top of the list.
“Boards are looking for internal audit to add even greater value through collaboration and process effectiveness,” Mr McLay said.
“In terms of tax and new accounting standards, I see the difference with global results as being down to effective communication, or lack thereof; boards are looking for greater visibility on implementation progress and greater commercial insights than they are currently getting.
“This is a big opportunity for CFOs when it comes to reporting.”
Further, 42 per cent of those surveyed say their audit committees and boards are asking for more insights and information from corporate reporting on data protection and privacy, with the same percentage of respondents also saying they are providing corporate reporting on the risks from regulatory change.
“It is no longer a time for reactive corporate reporting,” added Mr McLay.
“Boards are expecting management to report issues to them in real-time.
“These increasing demands for more insightful corporate reporting means reporting teams need to draw on the volumes of data available, as well as technology advances, to deliver new levels of insights that board members require to fulfil their governance role.”