22nd August 2010
It is startling how this week’s top four news stories are dominated by compliance issues. The timing couldn’t be more unwelcome. It illustrates once again how businesses around the world are being overburdened with regulatory change at a time when testing global economic conditions suggests that they badly need to concentrate on developing their businesses. The global finance function in particular has had to endure change after change since the introduction of IFRS in 2005. Now it has to comply with the Carbon Reduction Commitment and of course XBRL (iXBRL in the UK) often without adding to an already over-stretched headcount. Governments around the world may be trying to slash their deficits but, as we have said in this column many times, they need to cut bureaucracy and the self- serving compliance industry in tandem. The challenge for the finance function is the never ending search for efficiency and productivity gains just to keep pace with the legislative onslaught. Nobody denies that regulatory change is not needed in some areas but the inability of governments to co-ordinate and rationalise change is deeply disconcerting.