3 Benefits from Completing Business Value, Governance & Risk (SCAQ)
As an aspiring Chartered Accountant, it might be a surprise to see Business Value, Governance & Risk as part of the requisite exams. Audit, tax, accounting standards – fine – but Business Value? Governance?
As those who have already completed it would testify, this module definitely deserves to be in the suite of qualifications. Why? Here are 3 benefits from this module.
1) Valuation Skills are Critical for Roles in Mid-Management onwards
As an accountancy professional rises within a corporate, it would often require engaging with investment decisions. Should a firm acquire a competitor? Should the firm commit to a new factory in China? All such decisions involving knowing the value of the investment and comparing it to the costs incurred.
A savvy professional would never pay SGD$10 million in costs, for an investment that is valued at SGD$6 million. In the hallowed words of Warren Buffett “Price is what you pay, value is what you get”. Valuation skills are vital to knowing what we are really getting and paying the right price for it.
2) Governance and Risk Sharpens Valuation
We often value a firm by working on the financial statements and projecting its future cashflows. However, how reliable are the financial statements? While the auditing process does give significant assurance, we have seen that it does not fully prevent fraud (think from Enron to Wirecard).
Understanding a firm’s governance and risk management is needed to ascertain the confidence level that we can place on the firm’s disclosures. A firm with strong governance is much more likely to produce reliable financial statements and sustainable cashflows.
3) Governance and Risk is Universally Applicable
Outside of a valuation setting, a firm’s long-term success is dependent on its governance and risk management. Executives who are well versed in this will play an invaluable role - by implementing strong systems of governance and risk management, thus influencing the long-term success of a firm.
From the foregoing, we can clearly see how this module prepares us to rise in the corporate ranks and why it is placed in our CA qualifications!
Should I Take A Course For This?
Can a candidate pass the exams via self-study? Of course.
However, the unique value of a structured course is two-fold, it saves precious time and provides deeper learnings. Irwin cuts through the hundreds of pages of course materials and efficiently highlights the critical points of the syllabus, while ensuring candidates truly understand the underlying logic and reasons behind the concepts.
Classes are also taken online, in the comfort of your home, thus eliminating travel time. More of the candidate’s time can thus be allocated to balancing workplace demands, enabling one’s advancements in both qualifications and career.