Ocampo: Financial Statements Review with an Accountant-A A +A
Thursday, August 22, 2013
A FINANCIAL Statement (FS) Review is a monthly activity conducted by management to determine and evaluate the financial position and results of operations of the Company. During this activity, the Chief Finance Officer, Finance Manager, Comptroller or Accountant, walks through, depending on their reporting levels, the Board of Directors; President or Chief Executive Officer and National Managers; Division, Branch or Plant Managers; Operation Managers and Supervisors, about the financial health and performance of the business. Sometimes, even rank and file employees are included in the review of specific financial data that is a result of their performance.
The FS Review is a periodic and purposive review across all levels of the organization that aims to inform, evaluate and make decisions, depending on the level of authority of the reviewer, that is then cascaded to concerned officers and employees of the organization for implementation
Accountants, at the helm of an FS review, are much like medical doctors. Reports of laboratory results are to doctors while financial statements are to accountants. Doctors can diagnose physical health problems based on their review of laboratory results, and so do accountants who can diagnose financial health problems with the use of financial statements. Doctors prescribe medicine as cure and preventive treatment whereas accountants prescribe systems, procedures, controls, various strategies and an array of “financial medicine” up their sleeve to cure and prevent operating deficiencies. State a financial problem and the accountant can tell you which button to push as the solution – the rest of the solution will depend on management’s will to implement.
An accountant's education and training of five years cannot match with the doctor's more than 10 years of preparation; but I can still say that experienced accountants' expertise can measure up with that of experienced doctors. Accountants have a penchant for details, and they deal with myriad of transactions and figures everyday of their working life; it's like dissecting a part of a human body everyday – acquiring a skill of familiarity that enables them to immediately spot problems and prescribe the right solutions. Ask an accountant the answer for one plus one and he will say two. But because of their skill and expertise, they may answer “what do you want?”; but of course, this skill and expertise should be used within the bounds of law. It’s an experience in a “war torn” battlefield of business operations that could earn an accountant a masters or doctors degree in Wharton or any business learning university.
The FS review with an accountant – a time when management listens to the financial diagnosis of their important financial coach and partner, and follow their financial prescriptions - just as patients listen and follow the medical prescriptions of their doctors.
Published in the Sun.Star Pampanga newspaper on August 23, 2013.