Outlook Q&A: Making good business decisions todayrequires timely and accurate financial reportingdata. What should CFOs do to improvethe reliability of this information?Wang Guoliang:
Our experience has shown thatcompanies should focus especially on strengtheningtheir financial management system and improvingtheir risk management and control processes.For example, an important step we took after thereorganization and listing of CNPC in 2000 was tocentralize our accounting system to ensure that weproduce accurate and timely accounting information.Our goal was to introduce corporate-level accountingwith one set of accounts managed at the highest level.Before the company was publicly listed, we had 1,800sets of accounts, with seven tiers of accounting acrossbusiness segments, regional companies, factories, unitsand other parts of CNPC. Accounts were manuallyconsolidated, took a long time to produce and oftencontained inaccurate data.Starting in 2007, we worked to centralize theaccounting of all regional company subsidiaries.Now the accounting data prepared at different levelsof our subsidiary companies is sent directly to CNPCheadquarters. Financial statements are generated byour headquarters’ finance department at the sametime that statements are produced by the individualbusiness units. From having 1,800 sets of accounts,we now have just one.Because the accuracy of data is managed by CNPCheadquarters, we can better support the production of reliable and timely information. We can also generatefinancial statements at any time.
As part of this centralization, are you consideringmoving to a shared-services center model?
Our company’s management has already reached aconsensus on the strategic importance of setting up ashared-services center, so we are already moving inthat direction. We believe that model will help makeus more competitive.For example, there are still some gaps betweenexpenditure and revenue at our subsidiary companies.Shared-services centers are an important part of addressing that issue because they imposestandardization and process-oriented operations.And although their main purpose is to reduce costs, ashared-services approach can also improve managerialexpertise, financial transparency and consistency.As we go forward to implement this model, all ourfinancial accounts will be reviewed through thecenter, an approach that can enable more carefuldecision making. CFOs should bear in mind, however,that implementing a shared-services center takestime, because it doesn’t just involve finance but alsoIT, procurement, legal and human resources.
Earlier you mentioned the importance of institutingbetter processes for risk management and controlsas way to improve the quality of information.
Yes, in 2003, CNPC was among the first group of companies to implement a risk control system in linewith the Sarbanes-Oxley Act. Compliance with the Actwas required by the regulatory authorities, and wasalso an internal CNPC requirement to enhancefinancial management and improve our internalcontrol systems.CNPC attached great importance to the issue of building internal control systems. We established a
Wang Guoliang is thechief financial officer of China National PetroleumCorporation (CNPC), China’slargest oil and gas producerand supplier, as well as oneof the world's major oilfieldservice providers. Mr. Wang,who has worked in China’soil and gas industry fornearly 30 years, is a directorof PetroChina Company.As part of an Accentureresearch initiative studyinghigh-performance financeorganizations in Chinesecompanies, we spoke with Mr.Wang about the role of chief financial officers in improvingoverall business performance.This interview was conductedby Claire Yang, who leadsthe Accenture Talent &Organization group inGreater China; Ralph Wang,a managing director in theAccenture Finance & EnterprisePerformance group in GreaterChina; and Xuyu Chen, asenior marketing managerin Accenture ManagementConsulting in Greater China.For more information aboutthis interview, please contact
China National Petroleum Corporation: Meeting thechallenges of complexity and volatility
An interview with Wang Guoliang, chief financial officer, CNPC