Predictions for 2024: How Finance, ESG, Legal, Audit, and Risk Teams Can Prepare
What to look for in 2024
At the 2023 Workiva Amplify conference, over 8,000 accounting, finance, ESG, legal, audit, and risk professionals discussed best practices, new techniques, and cutting-edge technology that impact the way they work.
Here are the top takeaways we heard during the week that will help you plan for 2024.
Accounting and Finance
The accounting and finance profession is evolving.
Data management, technical, and non-financial skills are becoming increasingly important. The expansion of data in a company means that finance teams are now responsible for collecting, organizing, and analyzing various types of financial information and these new skills are now non-negotiable.
But this change mindset is still not mainstream, as companies struggle to fill accounting and finance roles. In fact, Robert Half recently reported that 95% of hiring managers are finding it difficult to find qualified A&F talent.
Scalability. Scalability. Scalability.
The headcount shortage is affecting accounting and finance, as both retention rates and candidate pools dwindle. Teams are feeling the pain, and managing workloads has been a major stressor. But with tech advancements like automation and generative AI, they might have a lifeline.
If organizations aren’t currently using automation fully, they know and feel it.
One Workiva customer at an international insurance company shared from experience, “A lot of our work could be automated, but it has been done the same way for a long time.” When asked about how she got more buy-in from the traditionalists on her team, she said time savings is a big factor. “The amount of time it saves is such a big selling point. And the Workiva platform is so easy to use.” For example, Playa Hotels & Resorts embraced automation using the Workiva platform and cut their close from 10 days to 4 days.
Finance leaders want to build agile teams to prepare for new regulations.
With the SEC’s new cybersecurity rule and the impending climate disclosure decision, finance teams need to remain agile for whatever the SEC brings next. Reporting requirements from other bodies will have downstream effects on private companies. If your current processes or tools don’t enable compliance, then you could be a step behind. This was a top concern for attendees.
One attendee reflected this tension, “You’re getting more regulations, more disclosure requirements, but you aren’t getting more time to do it.”
What are you most worried about in 2024?
Governance, Risk, and Compliance (GRC)
Do not be a passive observer to change.
With the fast-changing risk landscape today, there are many opportunities and pitfalls to consider. So what is the internal audit profession doing about it?
IIA President and CEO Anthony J. Pugliese posed this question during his session on the future of internal audit, stating that internal auditors have an opportunity to lead the way and maximize impact.
With emerging risks related to ESG, cybersecurity, generative AI, and more, internal auditors are the ones best equipped to help guide their organizations in these areas, stay prepared for challenges in a constantly changing environment, and add value as strategic business advisors.
That means audit and risk teams should look for ways to continuously innovate, improve, and build risk resilience across their organizations.
Move from reactive to proactive risk management.
Speakers from Best Egg, Boomi, and Newell Brands discussed what building risk resilience at their organizations means to them: It’s about anticipating risks or challenges that could impact your organization, proactively positioning yourself to risk, and thinking about ways to turn risks into positives and new opportunities.
Some ways they’re accomplishing this:
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Conducting dynamic risk assessments—consistently analyzing the risk over time and as needed versus doing one risk assessment annually
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Jumping into gen AI to help save time, handle resource constraints, improve effectiveness, and get a broader perspective—along with building effective governance programs around AI so the entire business can benefit from the technology while mitigating risks
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Prioritizing stakeholder alignment and collaboration to show the true value of internal audit and risk teams—demonstrating how proactively managing risk can help your organization spend less time on issues, enable growth, and build repeatable processes to stay ahead of what’s next
Leverage analytics for continuous monitoring
It's clear that audit teams are really thinking about how they can mature their use of audit analytics to get to a state of continuous controls monitoring and better integrate their use of data throughout their organizations.
A speaker from Braze shared an example of how his organization piloted a program for continuous monitoring. Starting with their payroll team, they wanted to understand and track some of the most meaningful analytics, such as being able to see if an individual is being underpaid or overpaid.
While he noted that it’s a big investment up front to plan, build, and test, it was also a big success. His advice:
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Have a champion to push this forward
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Spend the time needed to get it right—this is a marathon, not a sprint
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Commit to continuous improvement—level up this process as you make progress
Gen AI is on everyone’s mind...
Environment, Social, and Governance (ESG)
Regulations are already here.
While we may be waiting for the SEC climate disclosure rule, other governing bodies are releasing their own ESG-related regulations. U.S. companies should not wait until the SEC passes a rule—they need to get ready now for CSRD and California’s SB-253 and SB-261 laws.
Management teams need to recognize that sustainability impacts business financials. Having clarity over the long-term shape of the business, how return expectations will evolve, and what that means for capital expenditure through the transition is becoming a C-suite preoccupation, not just a tick-the-box exercise for practitioners.
When data is everywhere, controlling it is everything.
Companies are realizing that with an influx of financial and non-financial data, data collection, management, and analyzing practices have to evolve.
Mandi McReynolds, VP of Global ESG at Workiva, said, “When ESG data is everywhere in all different non-traditional financial formats, building out the controls and data structure is business critical. To be ready for regulation and audit, financial and sustainability teams like ours are focusing on data collection, accuracy, quality, and analyzing practices. We found the ability to collaborate in real time in a secure shared workspace with Workiva improved efficiency and speed for internal and external audit. Over the next 18 months, we are turning our focus to stronger data management to help us drive real time and effective strategic decision-making within the platform to drive strong business and social outcomes.”
Collaboration is key.
With various sources of data comes a variety of stakeholders and input from nearly all departments. Reaching out for information can feel inconvenient. The key? Have a centralized place to collaborate on ESG reporting.
ESG regulatory radar
Legal
Optimism in the IPO market means preparation needs to happen now.
The first half of the year was slow for IPOs, but the market is picking back up. Companies need to start preparing now if they plan to go public. That means getting your financial house in order, picking the right team for your working group, and choosing a filing agent to work with. Since 2020, we've seen a huge change in how companies go public—including whom they choose to file with.
Use tech to do more with less and collaborate across workspaces.
With smaller budgets and smaller headcount, cross-functional teams are working together to find shortcuts in their technology to minimize manual work. When working in one system, you can create a single source of truth that enables efficiency and collaboration.
Payment processing and software company i3 Verticals used Workiva to complete their IPO. Hours before going public, i3 was able to update the final offering price in one spreadsheet cell and automatically update 329 other numbers in the SEC filing—something that would’ve taken hours of manual edits and reviews.
“We sent the document over to the auditors, underwriters, and lawyers for review. We hung out, had some beers, got a decent night’s sleep, and rang the bell at the NASDAQ the next morning,” recalled Geoff Smith, Senior Vice President of Finance at i3 Verticals.
The status-quo is no longer relevant.
Interacting with technology should be frictionless. Legal professionals want that in their work environment. The clunky status-quo that causes everyday headaches is not the answer. But a unified platform that can enable collaboration and efficiency—all while reducing risk—that is the answer companies are looking for.
When asked about getting buy-in from cross-functional teams to use Workiva, Nancy Golembiewski, Controller at Duolingo, admitted that it wasn’t easy—but the persistence paid off in the end. “Everyone was so intent on staying with current processes. But once we got everything loaded in Workiva, everybody was on board. People said [not changing] was ridiculous. We should’ve just started with Workiva.”
What do you think will have the biggest impact on your industry next year?
In Conclusion
Here are some final takeaways that will impact all teams in the next year, regardless of your field:
Generative AI
Generative AI will be a game-changer for teams who are looking to fill capacity gaps, but there's risk if controls and governance aren't adopted along with it
ESG
Preparing for ESG is no longer a question of “if” or “when.” Teams asking themselves “how” are ahead of the game in investors’ eyes, especially when assessing materiality of non-financial information such as cyber incidents
Regulations
The SEC‘s nonstop regulations to increase investor protection is a strong argument for why companies need to ensure their tech stack is delivering transparency, accuracy, and audit readiness
Talent
Talent remains a huge issue in accounting and finance with fewer students joining the ranks, increasing retirements, and lots more work to do