Question

What are the concepts and principles of effective written and oral communications? Please explain with some examples. Please link the answer with Analysis of Financial Information for Accountants.

Answer 1

Principles of Effective Communication – Clarity in Ideas, Appropriate Language, Attention, Consistency, Adequacy, Proper Time, Informality, Feedback. Explained six important principles below:

(1) Principle of Clarity in Ideas: First of all it should be clear in the mind of the sender as to what he wants to say. According to Terry the principle of effective communication is ‘first to fully inform oneself.’ The clearer the thought the more effective is the communication.

(2) Principle of Appropriate Language: According to this principle, the communication should always be in a simple language. Ideas should be clear and be devoid of any doubt. Technical words and words having various meanings should be used to the minimum.

(3) Principle of Attention: The purpose of communication is that the receiver of information should clearly understand its meaning. It means merely transferring information is not communication and it is important that the receiver should understand it. This is possible only when the receiver takes interest in the message and listens to it attentively.

(4) Principle of Consistency: According to this principle, communication system should maintain consistency in the objectives of the enterprise, its procedures and processes. It means communication should be in accordance with the policies laid down for it.

(5) Principle of Adequacy: The information sent to the receiver should be sufficient and complete in every respect. Information more than the need or less than the need is harmful. In the context of business incomplete information is dangerous. The sufficiency of information depends on the ability of the receiver. If the receiver happens to be capable more information can be given with the help of a few words. On the contrary, in case of a less capable receiver more details are needed.

(6) Principle of Proper Time: The messages should reach the receiver whenever they are needed. Late messages are meaningless and the utility of communication is ended. Hence, the message should be sent before the actual need keeping in mind the time required for communication.

The mastery of effective communication is increasingly important for finance professionals in modern companies. Focusing on active listening, knowing your audience, and paying attention to nonverbal cues can help anyone improve their ability to communicate effectively and persuasively.

Let’s say you’re a prodigy when it comes to accounting. Everyone in your company’s finance department comes to you with their most tricky technical questions. But when you’re put in front of the team of C-suite executives to explain the company’s most recent financial data, they think you’re speaking a foreign language. It’s true—finance deals with data, numbers, and concepts that will go over the heads of most laypeople. But this just means it’s even more crucial that a finance professional can explain the significance of their data while composing a compelling narrative. A true financial expert should be able to explain trends, patterns, and forecasts in a clear and concise way that gets everyone in the company up to speed and on the same page. And with continuing advances in automation and artificial intelligence, the future workplace will likely rely more and more heavily on soft skills.