With ethical challenges on the rise employee accountability is more important than ever before! And while employers understand that holding employees accountable for their actions at work is a key component of risk mitigation, they often struggle with how to achieve accountability in a way that’s financially responsible, ethically sound, and operationally sustainable.  

If you’re feeling overwhelmed thinking about how to shore up your accountability efforts, we have some helpful tips to share with you to reduce risk and improve business outcomes. Remember, effective accountability is achievable for all organizations regardless of size, budget, workforce, or industry – so let’s dive into the year’s most important accountability initiatives!

These days we’re hearing a lot of clients ask, “How is AI going to affect my business?”

Unfortunately, there’s a lot of fear mongering going around related to AI based on largely unfounded concerns. There’s an uneducated belief that AI could steal jobs away from skilled professionals across various business facets like accounting and finance. However, this is simply untrue! AI is not going to replace your accountant, but what it is going to do is make professionals across finance, accounting, tax, treasury, procurement, and audit better at what they do!

When it comes to ethics in accounting the data is in and the numbers aren’t pretty! According to a global study on ethics by the Association of Chartered Certified Accountants (ACCA), 55% of accounting professionals surveyed said they have witnessed unethical behavior at some point in their careers and 25% said they have previously experienced pressure to act unethically. It’s no surprise then that 41% of respondents reported that ethical leadership and culture were top priorities at their organizations.

Sarah Lane, Head of Ethics and Assurance at ACCA responded to these findings in saying, “These insights underscore the need for robust ethical leadership and culture in organizations, and ongoing learning and development to support professional accountants in navigating these challenges.”

So, how can accounting and finance leaders combat these kinds of ethical challenges more effectively? Addressing today’s increasingly complex ethical issues requires strong leadership!

There is no one better positioned to create sustainable financial success inside a business than the CFO. A CFO takes their financial expertise and channels it into a strategic leadership role to create financial success for the company and its stakeholders. As such, their responsibilities include: budgeting and forecasting, managing mergers or acquisitions, and handling compliance issues.

A CFO has a deep understanding of your business model and your banking relationships, works with your board of directors, prepares detailed financial and management reports, works with auditors, oversees tax planning, and sets policies around controls and payroll. The CFO role is forward-thinking as they consider economic, industry, tax, government regulation and social issues. As such, a CFO is especially valuable for a company that is growing quickly, employs a large number of employees, and/or has complex product lines. CFOs also bring tremendous value to a company when it is considering making an acquisition, preparing itself to be acquired, or has its sights set on obtaining funding.

However, knowing what kind of value a financial leader can provide doesn't answer the question, "Do I need a CFO yet?" So, how do you know when it is the right time in the evolution of your business to bring in a CFO?

Regardless of size, industry, or location, strong financial leadership is a vital component of any organization’s success. Yet, small and mid-sized companies often forgo hiring a CFO due to budgetary constraints. This is where bringing in a fractional resource can help! An outsourced fractional CFO will perform the same duties as an in-house full-time CFO, but on a more limited time basis.

For those that are not familiar with the term, “fractional leadership” covers anything that is less than full-time. That means a fractional CFO may perform ongoing accounting/finance duties for a set number of hours every week for months or even years while the company grows until it reaches a point where it has enough work to justify the cost of a full-time hire. In this way, a fractional CFO is a great steppingstone as an organization grows or undergoes significant transition. In other situations, a fractional CFO may be brought in to provide short-term business project oversight or to clean up a mess that has resulted from a major accounting issue.

So, let’s look at when a fractional CFO is an absolute must-have.

According to the 2024 Report to the Nations by the ACFE (Association of Certified Fraud Examiners), organizations lose 5% of their revenue to fraud annually. That equates to a more than $5 trillion loss to fraud globally every year. And while we tend to hope that this kind of thing is happening somewhere else instead of in our backyard, the bulk of this fraud isn’t occurring overseas. In fact, the US and Canada are responsible for 38% of all reported fraud cases worldwide, which gives them the unfortunate distinction of leading the world in fraud.

We’ve known for years now that business fraud is on the rise dramatically across most categories. According to the ACFE, asset misappropriation schemes are the most common but least costly, while financial statement fraud is the least common but most costly. Falling somewhere in the middle of both spectrums are other forms of business fraud like billing schemes, check and payment tampering, and theft of non-cash assets. But there are also far more sophisticated fraud schemes emerging these days as well. A Cybersecurity Dive article from earlier this year revealed a new startling trend – the uptick in financial scams using deepfake technology. While this may sound more like Sci-Fi movie than a business news headline, consider the fact that a recent report by Deloitte speculated that fraud losses may hit $40 billion by 2027 due to generative AI magnifying the risk of banking fraud.

At this point, it isn’t a question of whether your organization will become a target of fraud anymore, but when. Of course, that begs the question: How are you protecting your organization from fraud?

Today’s executive financial hiring numbers reveal a surprising trend! Recent data shows that the rate of companies hiring externally for their Chief Financial Officer (CFO) role is at a 10-year high. The prevailing theory as to why so many companies are looking outside their organization to hire a CFO is that succession planning for CFOs has been deprioritized in recent years as they have focused on tackling their organizations’ more pressing needs instead. And yet, succession planning remains a critical activity to avoid the disruption and cost associated with needing to look externally for a replacement when an organization’s CFO leaves or retires.

These days there are many facets of technology spending to evaluate – everything from software subscriptions and ongoing infrastructure to new AI investments and increasing security costs. Unfortunately, this landscape can quickly become a cost quagmire for less financially experienced CEOs and business owners. Without a strong background in accounting/finance, these kinds of leaders can become distracted by tech solutions that promise big results and have even bigger price tags.

So, how do you keep technology spending in check? The key is to think like a CFO!