Ajith Nivard Cabraal: Management Accountants – focusing on the repositioning of the profession Special address by Mr Ajith Nivard Cabraal, Governor of the Central Bank of Sri Lanka, at the Global Summit, organised by The Institute of Cost and Works Accountants of India on “Repositioning the Management Accountant”, New Delhi, 12 January 2008. *  *  *  The theme of the Conference suggests that the Management Accountants of today are de facto doing something different to the traditional role of the Management Accountant. The new de facto role seems to be more of that of a strategist and a performance management specialist, rather than a historical “information supplying” or even a “decision facilitating” role of an accountant. If one were to drill down, we may perhaps note that the education and training of those who have become strategists and performance management specialists may not have necessarily been intended that way. But yet, it happened. How did this happen? •  Perhaps the training, although intended to create management accountants, was appropriate to create a strategist. •  Perhaps the training, coupled with business developments and public expectations, shaped management accountants to become strategists or the deliverers of outputs rather than contributors of inputs only. •  Perhaps the ability of the management accountant, as a result of his core disciplines, enabled him to respond effectively to unfolding developments and then deliver new outputs, and such abilities were recognized by the business community in the course of time.
In my view, this is not an area for regulatory prescription - there is not a unique organizational model that would be most effective for every bank. Rather, we look to see whether a compliance function achieves certain goals in addressing a firm’s specific compliance risk challenges. •  First, is it structured so that compliance staff can carry out their responsibilities with appropriate independence? Compliance staff may be embedded within business lines or have reporting lines to branch management or to country heads. But whatever the reporting line, they must have the capacity and incentives - monetary and otherwise - to critically evaluate operations, and they must have resources and support when problem areas are identified. •  A second, and related, question is: do local compliance staff have strong linkages to, and the backing of, head office compliance…and through head office compliance to global senior management and the board of directors? •  Third, does the structure support the development and implementation of sound monitoring and testing programs? Testing of course is a “point-in-time” event, but monitoring is very much an ongoing process. We have generally found that monitoring and testing tends to be one of the weaker components of many firms’ compliance risk management programs. •  A fourth question is whether the volume and quality of compliance resources is appropriate. This is obviously more than just a body count, but an assessment as well of whether the firm has staff with the appropriate technical skills to carry out the necessary sophisticated analysis.