The CPA's role in strategy and leadership

Accounting Ahead | Original study resource | accountingahead.com.au

The CPA's role in strategy and leadership

MODULE 1 | 1.9 | STUDENT COMPANION

Six ways CPAs contribute to strategy

The CPA as business

partner

Traditional foundations plus strategic

insight

Decision processes

Clarify who decides on finance and budgets;

supply the data

Resources and targets

Allocate budgets; turn goals into targets and

measures

Managing finances

Cash for returns and growth; best public

value within budget

Value creation

Superior benefits anywhere along the value

chain

The business model

Describe it, and what changing it would do

Implementation

Align functions, reallocate resources, set key

measures

Worked example: turning a strategic goal into targets (imagined

hardware chain)

Board goal: grow revenue from $200 million to $240 million in three years, mainly through trade customers.

Revenue ($ million) Now Target in 3 years Increase

Trade customers 80 110 30

Retail customers 120 130 10

Total 200 240 40

New trade accounts opened each month

Average spend per trade account

Gross margin on trade sales, so growth is not bought with profit-destroying discounts

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.9 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

Finance roles across the strategy process

Role Analysis Develop the plan Implement Review

Accountant Collect financial,

enterprise and big data

Support business

modelling

Analyse interim

performance

Gather data for review

Senior accountant Interpret data and

metrics; link finance,

technology and

information teams

Insights, forecasts,

business cases

Analyse performance;

help re-scope projects

Keep data valid and

reliable

Financial

controller

Use data to value assets,

inform decisions,

manage risk

Challenge assumptions;

develop options and

budgets

Champion change; plan

contingencies

Spot when the plan or

business model must

change

CFO Weigh the strategic

implications of all

information

Ensure a coherent plan;

win board support

Role-model and lead the

change

Raise strategic and

business model issues

with leaders

Internal auditor Design performance and

risk dashboards

Contribute with a focus

on performance and risk

Monitor implementation

risks

Review dashboards;

raise issues with

management and the

board

Following one strategy: Sunreach considers a plant in Vietnam

(imagined)

Stage Finance contribution

Analysis Accountants gather cost, sales and market data; a senior accountant interprets labour,

logistics and exchange rate trends

Develop the plan The financial controller challenges the assumption that wages stay flat and models lease

versus build; the CFO tests the plan against capital limits and takes it to the board

Implement Budgets reallocated; measures for output, quality and cost per unit; the internal auditor

tracks currency and supplier risks

Review Does the strategy, or the business model itself, now need to change?

A caution. Being a business partner does not mean being a cheerleader. CPAs must keep their integrity

and objectivity and say so when the numbers do not support a strategy. That evidence-based

independence is what makes their voice valuable.

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.9 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

Practice questions

MODULE 1 | 1.9 | TRY THESE BEFORE THE WORKED ANSWERS

Question 1 - Match each task to a role and a stage

Finance task Role Stage

(1) Collect monthly sales and cost data for a market analysis

(2) Interpret return on investment and SWOT results and explain the

trends to the strategy team

(3) Challenge the business case's market-growth assumption and

develop alternative options

(4) Present a coherent strategic plan to the board and secure its

support

(5) Monitor the roll-out for emerging risks using dashboards

(6) Analyse interim performance against budget during the roll-out

(7) Lead the change as a role model and drive re-scoping of a

strategic project

(8) After reviewing results, judge whether the business model needs

to change

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Accounting Ahead | Original study resource | accountingahead.com.au

Question 2 - A change in business model

Imagine a café chain called Bean There that is shifting most of its sales from dine-in to delivery through

third-party apps. How will its profit formula change, and which financial measures should its CPA start reporting,

or report differently?

Question 3 - Traditional role and business partner

Explain how a CPA's traditional role and their business partner role support each other. Give one example of

each role helping the other.

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Accounting Ahead | Original study resource | accountingahead.com.au

Worked answers

MODULE 1 | 1.9 | WORKED ANSWERS - ATTEMPT THE QUESTIONS FIRST

Question 1 - Match each task to a role and a stage

Task Role Stage

(1) Collect sales and cost data Accountant Analysis

(2) Interpret ROI and SWOT results Senior accountant Analysis

(3) Challenge assumption, develop options Financial controller Develop the plan

(4) Present plan, win board support CFO Develop the plan

(5) Monitor roll-out risks with dashboards Internal auditor Implement

(6) Analyse interim performance Accountant Implement

(7) Lead change, drive re-scoping CFO Implement

(8) Judge business model change Financial controller Review

Some tasks overlap between levels; what matters is the pattern from gathering data to leading change.

Question 2 - Bean There's new business model

Profit formula changes: revenue now arrives through apps that charge commission, packaging becomes a

significant cost, dining space is needed less, and order volume matters more than time spent in the café.

Measures to report: sales by channel; average order value; platform commission as a percentage of delivery

sales; packaging cost per order; contribution margin per delivery order compared with dine-in; delivery time,

accuracy and customer ratings; repeat-order rate; and rent and labour per order, to judge whether café space

should shrink.

Question 3 - Traditional role and business partner

Traditional role supports partnering: accurate records, compliance with standards and strong controls give

managers data they can trust, so the CPA's strategic advice is credible. Example: reliable product costings let

the CPA show which product lines a new strategy should drop.

Partnering supports the traditional role: understanding the strategy helps the CPA design budgets, controls

and measures that focus on what matters. Example: knowing a new market is a priority, the CPA builds reporting

that tracks it separately. Throughout, integrity and objectivity must not be traded away to please colleagues.

GLOBAL STRATEGY AND LEADERSHIP | M1 | 1.9 | WORKED ANSWERS

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