Role of CFO becoming more complex: Industry watchers
Amid a changing business environment, the role of a chief financial officer has become more complex. Industry watchers say that CFOs are increasingly expected to be more involved in strategy and planning, going beyond traditional functions of governance and compliance.
SINGAPORE: Amid a changing business environment, the role of a chief financial officer has become more complex. Mr JK Low has been a chief financial officer for about 12 years and is currently in that post for Viking Offshore and Marine for the last five years.
In recent months, declining oil prices and currency volatility have kept him busy as he tries to manage rising domestic costs and productivity demands. He said an increasingly complex business environment had made his role as CFO more challenging.
"You need to navigate beyond what you do traditionally - making sure books are well kept and making sure governance and controls are in place - and take advantage of this to help the business and leadership team to move forward," added Mr Low.
"The CFO is in a very interesting position where he gets to see the overall financials of the company, he knows what are the resource capacity available to the company, and they need to make use of this and provide this information to the senior leadership team."
According to a recent study by KPMG in a recent survey on Asia Pacific CEOs, executives in the post are increasingly expected to be more involved in strategic planning - especially since they have a deeper understanding of financial opportunities and risks.
Mr Martyn Vans Wensveen, global leader of financial management at KPMG in Singapore, said: "More and more CFOs are becoming business partners and it is in a way challenging the business plans and viability of the investments the business is making in the future ... It is about being that strategic thinker who has an overview of the business and can help the CEO with making good decisions for example which businesses to invest in, which markets to go into and which technology platforms they should invest in."
With financial and regulatory requirements becoming increasingly complex, firms are expected to be accountable to even more stakeholders - including internal management, regulators, investors and even the public. Industry watchers said that CFOs are assuming more responsibilities in ensuring timely and consistent communication with each respective group.
Mr Harold Woo, president of the Investor Relations Professionals Association (Singapore), said: "Our regime is one of comply or explain, so that puts a lot of onus on the CFO as the responsible person to make sure that corporate governance is carried out correctly and with the right disclosure and transparency ... The advocate of integrated reporting puts onus on connecting all the dots of how a company creates value for its stakeholders and how risks are mitigated."
Even as their roles expand, industry watchers said new technology can help CFOs better plan ahead. Greater availability of financial data can also help provide insights for future business opportunities.
- CNA/ac
- wong chee tat :)
Showing posts with label KPMG. Show all posts
Showing posts with label KPMG. Show all posts
Friday, January 23, 2015
Tuesday, August 6, 2013
Singapore companies rely heavily on estimates: KPMG study
Singapore companies rely heavily on estimates: KPMG study
By Toni Waterman
POSTED: 05 Aug 2013 8:25 PM
KPMG analysed the financial statements of 200 companies on the Singapore Exchange and found that 82 per cent of the total assets on their balance sheets are valued on estimates and some form of human judgement.
SINGAPORE: Eighty-two per cent of the total asset values on a typical balance sheet today are based on estimates, according to a KPMG study.
KPMG analysed the financial statements of 200 companies on the Singapore Exchange (SGX) and found that 82 per cent of the total assets on their balance sheets are valued on estimates and some form of human judgement.
KPMG's head of audit Ong Pang Thye, said: "The problem with having estimates in the books are the issues of comparability and consistency.
"The other issue that we are looking at is whether they are susceptible to human errors and are unintentional, or if they are subject to one form or another of human bias. This could be in the form of the more intentional ones."
The study shows that as little as a one per cent fluctuation in the total asset value can result in a 38 per cent change in net profit and up to a 50 per cent change in comprehensive income.
This means that even slight changes could turn a profit into a loss and vice versa.
Although fair value estimates for financial instruments were a key concern during the global financial crisis, it appears they are less of a concern for companies in Singapore as less than one per cent of total assets on average use unobservable inputs - known as "level three inputs" - and are subjected to level three fair value measurements.
Those who create financial statements said another problem with estimation is consistency.
BW Maritime's group CFO, Nicholas Gleeson, said: "The risk is that the shareholders become a little bit lost.
"They look at two sets of financial statements and think the companies are quite comparable but what they see flowing to the profit and loss in one (statement) is different from what is happening in the other (statement)."
The study shows that no sector is spared from the use of estimates and that some sectors like energy and telcos rely more heavily on estimation then others.
The study looked at 11 industries, including information technology, industrials, healthcare, real estate and energy.
Sam Ong, group senior executive vice president and group deputy CEO of Hyflux, said: "What I want to challenge the profession is that of all this volatility and accuracy that we are trying to derive, we have to make sure that we present it in such a way that is structured and as comparable as possible."
There is no expectation that estimation will stop being a part of financial reporting.
However, the study suggests that a robust process for deriving estimations and auditors with the right skill set to work with those estimates could make them more accurate and consistent.
Of the 200 companies analysed by KPMG, about 58 per cent were classified as small-cap, nine per cent as mid-cap and 33 per cent as large cap.
About 60 per cent of these companies are local and 40 per cent are foreign companies with significant presence in Singapore.
- CNA/fa
- wong chee tat :)
By Toni Waterman
POSTED: 05 Aug 2013 8:25 PM
KPMG analysed the financial statements of 200 companies on the Singapore Exchange and found that 82 per cent of the total assets on their balance sheets are valued on estimates and some form of human judgement.
SINGAPORE: Eighty-two per cent of the total asset values on a typical balance sheet today are based on estimates, according to a KPMG study.
KPMG analysed the financial statements of 200 companies on the Singapore Exchange (SGX) and found that 82 per cent of the total assets on their balance sheets are valued on estimates and some form of human judgement.
KPMG's head of audit Ong Pang Thye, said: "The problem with having estimates in the books are the issues of comparability and consistency.
"The other issue that we are looking at is whether they are susceptible to human errors and are unintentional, or if they are subject to one form or another of human bias. This could be in the form of the more intentional ones."
The study shows that as little as a one per cent fluctuation in the total asset value can result in a 38 per cent change in net profit and up to a 50 per cent change in comprehensive income.
This means that even slight changes could turn a profit into a loss and vice versa.
Although fair value estimates for financial instruments were a key concern during the global financial crisis, it appears they are less of a concern for companies in Singapore as less than one per cent of total assets on average use unobservable inputs - known as "level three inputs" - and are subjected to level three fair value measurements.
Those who create financial statements said another problem with estimation is consistency.
BW Maritime's group CFO, Nicholas Gleeson, said: "The risk is that the shareholders become a little bit lost.
"They look at two sets of financial statements and think the companies are quite comparable but what they see flowing to the profit and loss in one (statement) is different from what is happening in the other (statement)."
The study shows that no sector is spared from the use of estimates and that some sectors like energy and telcos rely more heavily on estimation then others.
The study looked at 11 industries, including information technology, industrials, healthcare, real estate and energy.
Sam Ong, group senior executive vice president and group deputy CEO of Hyflux, said: "What I want to challenge the profession is that of all this volatility and accuracy that we are trying to derive, we have to make sure that we present it in such a way that is structured and as comparable as possible."
There is no expectation that estimation will stop being a part of financial reporting.
However, the study suggests that a robust process for deriving estimations and auditors with the right skill set to work with those estimates could make them more accurate and consistent.
Of the 200 companies analysed by KPMG, about 58 per cent were classified as small-cap, nine per cent as mid-cap and 33 per cent as large cap.
About 60 per cent of these companies are local and 40 per cent are foreign companies with significant presence in Singapore.
- CNA/fa
- wong chee tat :)
Monday, February 7, 2011
Semicon industry likely to boom: analysts
Semicon industry likely to boom: analysts
By Rachel Kelly | Posted: 07 February 2011 1810 hrs
SINGAPORE: With a number of new wireless gadgets expected to be launched, analysts say the semiconductor industry could witness a boom in production and hiring in 2011.
Computer memory prices have been more than halved, between January 2010 and last month.
As computer makers begin to replenish stocks of components, a recovery in prices is now under way -- and that's showing up on stock markets.
Shares of South Korea's Hynix have gone up 24 per cent this year, while those of Japan's Toshiba have risen 18 per cent.
The chipmaking industry is putting last year's slump behind it.
According to a global survey of semiconductor executives by KPMG, 78 per cent expect revenues to grow by more than five per cent this year.
And an anticipated revival in PC demand is not the only source of excitement in the semiconductor industry.
It is expecting bigger gains from sales of premium chips used in smartphones, tablets and 3D TVs.
Chipmakers are looking to build new capacities to make the most of this demand growth.
Frost & Sullivan program manager, Asia Pacific Tim Chuah said: "So these are new markets or untapped markets that have been created, that will really push demand beyond your typical replacement cycles and that's smart phones.
"Then you get to your 3D Tvs (which) are new segments being created, that will drive demand in 2011.
"If you look at it from the supply side as well, there has been quite a tight supply market in 2010 because of shortage in capacity.
"I think manufacturers have been more aware of this glut in supply that has happened recently that has caused price erosion. They have been aware of this and they have not expanded supply as much as they would want to.
"So in 2011, I think a lot of them will be expanding as well.
"If you look at Global Foundries which bought over Chartered Semiconductor, they are going to spend $6 billion in 2011; TSMC is going to spend almost $7 billion in fab expansion -- so this sentiment that is happening in 2011 is something that really reflects actual demand.
"Otherwise, I don't think these companies would want to spend so much on expansion".
According to the KPMG survey, 29 per cent of global semiconductor firms predict workforce to grow more than five per cent in 2011.
With expansion comes the search for the right manufacturing location.
IDC Manufacturing Insights director Christopher Holmes said: "One of the things I'm hearing a lot of discussion (on) is the move to the next low-cost country -- where is it, what is it going to be.
"We are already seeing more and more factories moving further inland in China; we are starting to see the growth of Vietnam as a potential new low-cost centre and we are even starting to hear conversations about moving to Africa, Middle East - potential new low cost centres".
According to market research firm IHS iSuppli, sales of chips used in tablets may jump a staggering nine-fold this year.
Fitch Ratings has a stable outlook on the Asia-Pacific memory chip industry in 2011.
However, the ratings agency in a recent report said that overall industry revenue growth and profitability may come under pressure compared with 2010 due to oversupply and resultant falls in memory prices.
In a recent release by Fitch Ratings, Alvin Lim, associate director in Fitch's Asia Pacific Telecom Media and Technology ratings team, noted that "memory makers in Fitch's rating universe will be able to retain sound credit profiles in 2011 despite the likely suppression of profitability.
"The potential negative impact from a continued decline in memory prices will be well mitigated by these companies' strong market positions, efficient cost structures enabled by technology leadership, and robust liquidity".
Memory makers in Fitch's current rating universe include Samsung Electronics Co Ltd, Hynix Semiconductor Inc, and Toshiba Corporation.
-CNA/wk
- wong chee tat :)
By Rachel Kelly | Posted: 07 February 2011 1810 hrs
SINGAPORE: With a number of new wireless gadgets expected to be launched, analysts say the semiconductor industry could witness a boom in production and hiring in 2011.
Computer memory prices have been more than halved, between January 2010 and last month.
As computer makers begin to replenish stocks of components, a recovery in prices is now under way -- and that's showing up on stock markets.
Shares of South Korea's Hynix have gone up 24 per cent this year, while those of Japan's Toshiba have risen 18 per cent.
The chipmaking industry is putting last year's slump behind it.
According to a global survey of semiconductor executives by KPMG, 78 per cent expect revenues to grow by more than five per cent this year.
And an anticipated revival in PC demand is not the only source of excitement in the semiconductor industry.
It is expecting bigger gains from sales of premium chips used in smartphones, tablets and 3D TVs.
Chipmakers are looking to build new capacities to make the most of this demand growth.
Frost & Sullivan program manager, Asia Pacific Tim Chuah said: "So these are new markets or untapped markets that have been created, that will really push demand beyond your typical replacement cycles and that's smart phones.
"Then you get to your 3D Tvs (which) are new segments being created, that will drive demand in 2011.
"If you look at it from the supply side as well, there has been quite a tight supply market in 2010 because of shortage in capacity.
"I think manufacturers have been more aware of this glut in supply that has happened recently that has caused price erosion. They have been aware of this and they have not expanded supply as much as they would want to.
"So in 2011, I think a lot of them will be expanding as well.
"If you look at Global Foundries which bought over Chartered Semiconductor, they are going to spend $6 billion in 2011; TSMC is going to spend almost $7 billion in fab expansion -- so this sentiment that is happening in 2011 is something that really reflects actual demand.
"Otherwise, I don't think these companies would want to spend so much on expansion".
According to the KPMG survey, 29 per cent of global semiconductor firms predict workforce to grow more than five per cent in 2011.
With expansion comes the search for the right manufacturing location.
IDC Manufacturing Insights director Christopher Holmes said: "One of the things I'm hearing a lot of discussion (on) is the move to the next low-cost country -- where is it, what is it going to be.
"We are already seeing more and more factories moving further inland in China; we are starting to see the growth of Vietnam as a potential new low-cost centre and we are even starting to hear conversations about moving to Africa, Middle East - potential new low cost centres".
According to market research firm IHS iSuppli, sales of chips used in tablets may jump a staggering nine-fold this year.
Fitch Ratings has a stable outlook on the Asia-Pacific memory chip industry in 2011.
However, the ratings agency in a recent report said that overall industry revenue growth and profitability may come under pressure compared with 2010 due to oversupply and resultant falls in memory prices.
In a recent release by Fitch Ratings, Alvin Lim, associate director in Fitch's Asia Pacific Telecom Media and Technology ratings team, noted that "memory makers in Fitch's rating universe will be able to retain sound credit profiles in 2011 despite the likely suppression of profitability.
"The potential negative impact from a continued decline in memory prices will be well mitigated by these companies' strong market positions, efficient cost structures enabled by technology leadership, and robust liquidity".
Memory makers in Fitch's current rating universe include Samsung Electronics Co Ltd, Hynix Semiconductor Inc, and Toshiba Corporation.
-CNA/wk
- wong chee tat :)
Subscribe to:
Posts (Atom)