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Invest Cyprus 30/04-30/03/2019

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Technology, Corporate Governance and Business Ethics

Technology, Corporate Governance and Business Ethics

These are key to sustaining the accounting profession, says Marios M. Skandalis, Director, Compliance Division, Bank of Cyprus Group and outgoing President of the Institute of Certified Public Accountants of Cyprus (ICPAC)

What, in your opinion, are the most important issues and challenges facing accounting professionals worldwide today?

Marios Skandalis: The accounting profession has always evolved and grown in line with developments in the country’s economy. Moreover, it is highly correlated with the financial services industry for the servicing of both local and international clients. Accountants offer a wide range of services nowadays, including audit, taxation, business consulting, financial administration, fraud examination, compliance and other finance-related services. Like all other professionals, accountants have to maintain a high level of competence, aiming at delivering the best quality service to their clients.

Technology plays an important role in ensuring the best possible quality of service delivered and it has to be emphasized that, given that the highly regulated nature of the accounting profession, this places a huge responsibility and liability on the shoulders of all those working in it.

For this reason, remaining abreast of any technical developments in relation to the profession and driving such developments are challenges that all accounting professionals should ensure are effectively addressed.

Another area that poses a challenge for the profession is the underlying framework of the operation of any accountant/auditor: International Accounting Standards and International Standards of Auditing. Given the fact that most organisations in Cyprus are relatively small in size, I believe that now is the right time to seriously pursue the implementation of a simpler framework for the drafting of financial statements and consequently the way of auditing them. However, in doing so we must remain extremely careful and vigilant about safeguarding the transparently and highly compliant outlook of Cyprus, as confirmed by the US Office of Foreign Assets Control (OFAC) and the relevant bodies of the European Union.

Furthermore, we need to consider the regulations regarding the provision of accounting services so as to ensure uniformity throughout the profession as, at present, only the audit profession is regulated, with no regulatory provisions in place in relation to the accounting profession.


GOLD: We are now living in the digital era, in which technology has taken over our lives almost entirely. How would you describe the impact of technology and, in particular, its effect on the accounting profession?

M.S.: Technology is no longer a supporting function of an organisation’s operations but the key driver of its strategy. It is technology that will determine the level of operational efficiency and the quality of the products and services rendered. ICPAC, the digital transformation of which is a vital constituent of our strategic planning for the way it operates, communicates and delivers its work, plans to form a working group with technology-related professionals and organisations, so as to lay the foundations for the future so that our business model as a country develops around a digitalized environment in a more efficient manner. If this is not done now, we can say with certainty that our economy does not have a future. We are actively involved in building the relevant foundations so that the Cyprus economy can be a new Google or Amazon in terms of its revolutionary technology infrastructure.


GOLD: Apart from the growing role of technology in your work, we still hear regular calls for auditors to do more, particularly in cases where companies are subsequently found to be less robust than they appear to be. Are more changes on the way and are further changes needed if the profession is to have the necessary sustainability?

M.S.: Indeed, what is missing from most businesses is the right level of corporate governance. Technology is a huge facilitator of good governance but the quality of such facilitation largely depends on the level of the tone and appetite set by our members in their firms. This is why one of the key strategic goals of ICPAC was to lead the way and ‘walk the talk’ in relation to the need for the right governance to be in place. For this reason, ICPAC is proud to announce its decision to become the first association and regulatory authority to implement and adhere to a corporate governance code in collaboration with ICSA, the prime governance institution in the UK. This development will enhance the credibility and reputation of ICPAC, not only amongst its local stakeholders but also amongst its overseas partners.

The other prime factor that should be infused in the overall operational and governance framework of all firms is business ethics. Unless a firm’s strategy is based on the values of integrity and transparency, failure is certain! When we come to business ethics, unfortunately we have not done a lot. It takes stakeholders with a high degree of ethos and with an uncompromised focus on values to penetrate and reshape the culture of many firms. I consider ICPAC members to be the most capable candidates to be worthy ambassadors of business ethics by establishing the right cultural framework in their firms and setting the example for others to follow. This is the only way to ensure the sustainability and credibility of the accounting profession and this should form the strategic focus of all of our members.


GOLD: A new President of ICPAC is due to be elected this month. How would you describe your two years in the post?

M.S.: The Institute is today the most prominent and effective professional organisation in Cyprus. During my 2-year term as President, ICPAC focused on:

  • Further enhancing the outlook and positive reputation of the Institute both locally and internationally
  • Creating a robust corporate governance for the Institute, which will add to its credibility as well as act as a guide to our members of the expected level of governance from their side
  • Pursuing clear objectives that aimed at implementing effective structural reforms in the economy, digitization and the application of business ethics
  • Enhancing ICPAC’s outward-looking profile and reaffirming its status as an active key player with a leading role in all matters related to the Cyprus economy
  • Effectively addressing the new challenges facing the profession as well as the changing needs of our members, due to their exposure to new areas like compliance, fraud examination, corporate governance, etc.
  • Strengthening all aspects of ICPAC, including its image, to reflect its leading role in the new era of our economy.

I feel very satisfied that, thanks to our enhanced activities over the last two years and all the collaborations established, we have successfully addressed all these strategic objectives. As a result, ICPAC is today an organisation to which all of our members feel proud to belong. The real force of ICPAC is its 5,000 members who wish to voluntarily be part of this institution because they want to be drivers of the evolution of the accounting profession and are happy to part of this family that supports the economy of the country in practical ways.


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