Worldcom - we need more transparency
WorldCom points to the increasing need for accounting transparency inevery business, says Graham Steinsberg, CEO CODA.
The current scandals involving accounting irregularities with what we usedto call ‘blue chip’ companies, have implications for every CFO. In the caseof WorldCom, the initial explanation was that the misallocation of expensesto capital spending went unnoticed. Then of course there was Enron and Tyco.
They highlight an underlying problem, not just for blue chips. With theincreasing complexity of modern systems and financial accountingprocedures, it has become more and more difficult for those in charge ofcompany accounting systems to track and monitor all the accountingjudgements that are being made at an operating level.
It confirms the need for a new generation of Best of Breed financial engines which will allow any CFO to have instant visibility of the company’s financials – locally, by country, globally, by product or operating division; that will be capable of instantly adjusting to new systems developments and fiduciary requirements; that will allow non-financial executives to make the right business decisions based on real financial information.
In today’s complex environment every CFO knows that accounting is not anadd-on for the business, it’s the essential engine. As with Formula Oneracing cars, all engines aren’t the same. Ferrari has proved that you onlyget the best by extreme specialisation, backed up by high levels of R&Dexpenditure