Finance executives are getting ready for the incoming Trump administration with a multitude of changes expected on the regulatory side while also dealing with all the new accounting standards rolling out in the next few years.
“There’s a lot coming out in a short period of time,” said Financial Executives International president and CEO Andrej Suskavcevic, during an interview Monday at FEI’s Current Financial Reporting Issues conference in New York. “I think companies are really pressed to prepare for it. When you look at some of the surveys of who’s ready for revenue recognition or not, it can be concerning for companies that may not be aware of the gravity of the implementation of the new standard and what it means for their organization.”
A new survey by the online accounting software developer Intacct found that 40 percent of finance professionals say that preparing for and implementing the new accounting standards will be a painful experience. A separate survey by FEI’s Financial Executives Research Foundation and PricewaterhouseCoopers found that 78 percent of companies have begun to analyze the impact of the revenue recognition standard, but most of them haven’t yet finished the analysis.
“For the most part there’s a lot of discussion happening as to what it means and how to do it, and I think the vendor community is stepping up to help companies implement the standards accordingly,” said Suskavcevic. “We’ve gotten a lot of inquiries as an association about how we can help educate companies as to what they need to know, what are the key issues, and what are the tools they can use to implement the standard.”
FEI hosted a successful conference in June on the new lease accounting standard and is pondering a repeat to help companies prepare for the upcoming standard. In the meantime, the main topic for many financial executives in recent months has been the election. Now that Donald Trump has been elected, the question is what impact he will have on financial regulation, taxes and other issues.
“I think with any candidate, you hear all the rhetoric on the campaign trail and what they’re going to do, and then when they get into office, there’s a little bit of a wait and see as to whether they are really going to follow through with everything, and what does compromise look like because there is so much that you can do by executive order,” said Suskavcevic. “You really want to build constituencies. I think there’s a pretty healthy degree of a wait and see. There’s a fair amount of discussion going on right now. If everything that President-elect Trump was going to do was implemented, where does it affect folks the most? What industries are affected the most and how to prepare accordingly?”
He pointed to the impact on the stock market in the immediate aftermath of the election. “If you just look at the stock market’s reaction to his coming into office, the defense sector took off because he’s going to invest more in defense,” said Suskavcevic. “What does that mean? I think there’s a healthy degree of wait and see, trying to educate yourself and through various constituencies and congressional leadership, see how he forms the Cabinet. That will inform what type of point of view you might get on certain things.”
Based on the change in tone and language Trump has shown in recent interviews, he may be recognizing the gravity of the responsibility that comes with his new role. Suskavcevic is also fairly new in his leadership role at FEI, having become president and CEO only a little over a year ago. He envisions making changes in his organization too.
“Our focus is two-fold,” he said. “We have a large chapter network that provides a lot of networking and education locally in different markets around the country. As a national organization we support technical committees which create this conference and they lead a lot of our advocacy efforts. For us, our focus is really on one side to support the local markets and provide service and products and tools for local chapters to be successful, all tied around education and making them successful. The other side is supporting our technical activity and really helping build an educational program that serves the senior financial executives and their staff.”
Suskavcevic wants FEI to continue to help educate standard-setters and regulators on the impact of new rules on financial statement preparers and the companies where they work.
“At the end of the day everybody wants to be able to provide thoughtful, informative information for the investor community for everybody’s success,” he said. “We just want to have a seat at the table in those discussions, and we actively participate in comment letters and all those type of things and provide feedback on a regular basis. We look to continue to do that.”
Suskavcevic has been involved with FEI for over eight years and he plans to build the organization further now that he is leading it. “It’s a wonderful organization where people have a lot of passion,” he said. “They want to contribute. They want to make a difference in the world and give back to the profession. I think that’s a common thread with all members. Regardless of the size of company, public, private and so on, there’s a wonderful desire to give back and make a contribution for the better, and it’s wonderful to be part of an organization like that.”
He intends to expand the organization’s education function. “You can expect to see from FEI continued development of educational engagement of the profession overall through education in all forms, a stronger brand as we really help and work with all of our chapters around the country and make them stronger,” said Suskavcevic. “That’s something to keep an eye on. We’re always open to partnering with other groups and associations in active conversations to see how we can further the profession in a positive way. Partnership is a positive way to do that.”
In the past, FEI has partnered with the Center for Audit Quality, and Suskavcevic plans to maintain that relationship. He also is in charge of FEI’s Financial Executives Research Foundation.
“Our foundation continues to provide unbiased research,” he said. “We’re really looking to expand, and we’re constantly looking at what’s really relevant to help members and companies try to get a sense for what’s coming up in the world. There’s so much when you look at data analytics and new technologies. The rate of change seems to be accelerating, so our research efforts are really geared toward looking ahead and benchmarking, so people have good comparative data, whether it be in our audit fee survey or executive comp and so on. That is a strong part of the value proposition for FEI overall in our foundation.”
At this week’s conference FEI celebrated its 85th anniversary at its Hall of Fame gala and is looking ahead to its 86th year.
“If you look back over our history, it started in 1931 with 30 controllers getting together to learn from one another and seeing how they could give back and help their companies,” said Suskavcevic. “We want to continue that legacy.”
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