As interest rates begin to rise, most U.S. CFOs and senior
finance leaders see negative implications for their businesses,
according to a survey of
Chartered Global Management Accountant designation holders by the
American Institute of CPAs.
Seventy percent said that a moderately rising interest rate
environment would have a slight to moderate
negative impact on their
companies, according to the survey of 525 CGMA designation holders
conducted between August 23 and August 29. An additional 7 percent said
it would have a “high negative” impact. Only 13 percent forecast no
impact.
Indeed, U.S. CGMAs surveyed said that rising interest rates will have
more effect on their businesses in the coming months than any issue
other than implementation of the Affordable Care Act. A quarter said
that they are putting in place hedging strategies to limit exposure to
rate increases, 24 percent are accelerating capital investments to take
advantage of current rates and a fifth, 20 percent, are forecasting
lower customer demand because of interest rate sensitivities.
“Rising rates require recalibration,” said Jim Morrison, CPA, CGMA
and CFO of Teknor Apex Co. in Rhode Island. “Senior finance
professionals are focused on all aspects of monetary policy – from
potential leadership change at the Fed to its actions on quantitative
easing– so that they can make the right adjustments for their businesses
and minimize downside risk.”
CGMA designation holders are on the frontlines of many of those
decisions, helping businesses navigate the intersection of business
strategy and finance. There are more than 128,000 CGMA designation
holders globally and who are helping shape 95 of the world’s top 100
brands.