• Singapore’s Chief Financial Officers (CFOs) face difficulties due to evolving stakeholder expectations and reporting timelines.
• CFOs anticipate changes in how reporting operates.

CFOs are finding it difficult to provide boards with timely and accurate insights due to the increasing amount and speed of data. This issue is highlighted in a new report by EY Financial Accounting and Advisory Services (FAAS): 66% of global respondents say this significantly impacts corporate reporting effectiveness, up from 57% in 2015.

“How can reporting keep up in a rapidly changing world?” This annual global survey of 1,000 CFOs and heads of reporting from large organizations (including 40 from Singapore), each with over US$500 million in revenue, across 25 countries, reveals that adapting to technology is the number one external reporting challenge across the Americas, Asia-Pacific, Japan, and the Middle East.

Thirty-five percent of respondents from emerging markets also find adapting to technological changes, such as cloud-based systems, data analytics, robotic process automation (RPA), and artificial intelligence (AI), to be their biggest challenge.

Joon-Arn Chiang, EY Asia-Pacific FAAS Managing Partner, Ernst & Young LLP, notes that CFOs globally struggle to utilize the increased data volume and speed effectively. Legacy systems hinder many reporting teams from extracting future-oriented insights from large and dynamic datasets. Consequently, a gap is growing between what boards expect from corporate reporting and what CFOs can deliver. Until reporting leverages technological advancements, it will remain compromised.

Singaporean CFOs perceive more significant challenges regarding shifting stakeholder demands. Their top external challenges are changing stakeholder information expectations (Singapore 32%, global 18%) and reporting frequency requirements (Singapore 30%, global 17%).

Chiang explains that many Singaporean companies with international operations or subsidiaries of multinational corporations must adhere to various reporting standards and Generally Accepted Accounting Principles (GAAP) in Singapore, their home country, and their country of listing. Navigating these overlapping regulatory risks requires Singaporean CFOs to be well-versed in different jurisdictional rules and reporting expectations.

CFOs anticipate shifts in reporting operating model

Nearly a third (32%) of global respondents and 40% in Singapore rate their reporting operating model as “average.” Fifty-six percent globally and 37% in Singapore identify transforming this model as a significant focus of their role.

Over the next two years, 54% of global CFOs anticipate a substantial increase in outsourcing, followed by managed services (51%) and captive shared services centers - onshore or near-shore (50%). Captive shared services centers - offshore and centralized centers of excellence follow at 48% and 46%, respectively.

Singaporean CFOs, on the other hand, predict increased use of outsourcing (55%), followed by captive shared services - offshore (45%), captive shared services - onshore or near-shore (43%), managed services (35%), and centralized centers of excellence (25%).

Singaporean CFOs’ top three goals for these new reporting structures are leveraging data analytics for proactive strategic insights (50%), establishing a more adaptable and agile reporting function (32%), and future-proofing the reporting function against disruptions and changes (30%).

Chiang observes that high operational costs associated with routine transactions are driving the outsourcing of high-volume work to lower-cost regions. Combining centralized data, prepared consistently, with analytics empowers companies to gain insights and anticipate opportunities that were previously unattainable. This also allows for quicker, more targeted adjustments to the reporting process, enabling organizations to respond more effectively to changing business and reporting needs.

However, despite these changes, 42% of global CFOs and 62% in Singapore are concerned about balancing central control with the need to delegate reporting for local needs.

Currently, corporate reporting is predominantly controlled from headquarters (Singapore 30%, global 33%). However, CFOs are expected to shift towards a model where headquarters retain control, but significant responsibilities are assigned to local markets.

Chiang concludes that CFOs are envisioning the future of reporting. However, without decisive action to define a bold strategy and vision for modernizing reporting processes, they risk falling behind technological advancements.

To become true strategic partners to CEOs, future-ready CFOs must become proficient in the tools that enable them to deliver a corporate reporting strategy integrating technology with financial and non-financial reporting needs.

“How can reporting catch up with an accelerating world?” surveyed 1,000 CFOs or heads of reporting from large organizations to understand the challenges they face in corporate reporting. More than 40% of these organizations had annual revenues exceeding US$5 billion, with 21% exceeding US$20 billion. Respondents represented the Americas, Asia-Pacific, Europe, Middle East, India and Africa (EMEIA), and Japan, spanning 14 major industry sectors. The survey incorporated in-depth interviews with CFOs, heads of reporting from various organizations, and EY subject-matter experts.