This article was first published in the June 2017 UK edition of Accounting and Business magazine.

Q. There is a huge focus on KPIs these days, but I’m not always comfortable discussing the non-financials. What can I do?

A. There is little more likely to get my blood pressure soaring than KPIs. Maybe I should get a life. But this is important stuff – something that makes a real difference to the efficient allocation of the scarce resources of our nations. And yet, it remains a topic that the profession has still to nail down. 

So why are KPIs so important? First, they move markets. Non-GAAP numbers (both adjusted financials and non-financials) for some companies are more closely followed by investors than GAAP numbers. Add to that the frequent link between these numbers and management pay, and you can see why this gets the pulse racing.

You are right – accountants need to take control. Are the non-financial numbers calculated appropriately? Are the numbers sufficiently reliable? However, I am not sure that accountants can tackle some of the more outrageous management practices in this area without help. This demands a united front: investors must challenge bad behaviour, and regulators prod things in the right direction.

So how might you help re-establish sanity in this area of reporting? I would suggest you take a look at the resources on the ACCA website, including the KPI training module

Let me know how you get on.

Q. I don’t agree with the way that accounting is heading. It tries to come to a single value when the world is not always that precise. Is it time for me to retrain as a dog walker?

A. Dog walking is a noble profession, but I am not sure it is the right time to abandon your first career choice. In fact, I would go further. Frankly, I can’t imagine a better time to be an accountant. One of the reasons why the world is in such a pickle is that we don’t have enough accountants in charge. Resource scarcity. Intangibles. Let accountants start measuring and managing the full range of assets that are important to our long-term prosperity, and the world will be a better place.

Of course, not everything in the accounting garden is rosy. Your point about the spurious precision of a single value is well made. Frankly, I am in two minds about this one. The upside of a single value is that it allows the accountant to communicate performance in an easy-to-digest fashion. The problem, however, is that a single value can offer false security, suggesting the reported number is somehow ‘right’ – clearly not ideal.

Accountants have tried to tackle this problem, typically by proposing that we report the range of possible outcomes for key lines of a financial report. Take a look at ACCA’s report Confidence Accounting for some thoughts on this challenge. 

Q. Am I alone in fearing that regulators will use Brexit as an excuse to move back to UK GAAP?

A. However you voted, now is not the time to sit on the sidelines whining. We have to come together and ensure that our choices make sense in the long term. The debate must not be dominated by the loudest voices, but by reason and sound evidence.

Moving back to UK GAAP? Nooo! Please save us from any such madness. We can’t afford to retreat, clutching a scrunched-up Union Jack. We need to be open for global trade – and that means global reporting standards. 

Does that mean that I think IFRS is the best thing since sliced bread? Of course not. The standards have their flaws, some pretty challenging. But let’s not throw the baby out with the bath water. I would rather see us work with the IASB to identify and rectify issues than go it alone.  

The period of uncertainty that we face is scary, but so are the interest groups dominating the various debates. It doesn’t have to be that way. Stand up and be counted! 

Alison Thomas, consultant