Disrupting The Accountancy Profession
The accountancy profession faces significant opportunities and risks from digital disruption and rapidly evolving technology.
An accountancy profession in a world of full transparency of transactions and inbuilt validation will become a very different profession. It is changing the focus of auditors as well as accountants in business. Ultimately, digital disruption will impact the nature of demand and expectations on what an accountant is and does.
Technology news is ubiquitous. Much of it places developments in a negative light. The history of the profession has been to adapt, leverage, and utilize technology for the benefit of business, government, and society. The disappearance of comptometer operators in the 20th century stands as an example-new more value creating roles emerged.
Although one side of the technology coin represents risk, the other represents opportunity. But exploiting opportunities requires knowledge and understanding of the digital world.
The digital world is rapidly developing, and it is only the beginning of the journey. Many finance professionals have not heard of or fully appreciated emerging technology, such as blockchain. The effects of a digitalized and connected world is not just on processes but on business models.
The experience and insights of the IFAC Professional Accountants in Business (PAIB) Committee deepen the understanding of how technology impacts the finance function and implications for the profession. In conjunction with its recent meeting in New York, the PAIB Committee continued its explorations with David Powell, Global Brand Manager at IBM Cognitive Process Services and President of Association of Chartered Accountants in the US (ACAUS).
This was a great opportunity for a joint IFAC and ACAUS evening event, which brought together more than 120 professional accountants, including PAIB Committee members, to engage a broad audience on technology and the accountancy profession. The panel of accountants debated how disruptive technology in its various forms is rapidly gaining momentum and evolving the activities and career paths of professional accountants in public practice and the private and public sector.
Sanjay Rughani, CEO for Standard Chartered Bank, Tanzania, and Deputy Chair of the PAIB Committee, moderated and opened by noting how accountancy is radically changing, driven by disruptive technology and changing practices. In order to remain relevant, accountants will need to keep pace and embrace the changing dynamics linked to disruptive technology. The future profile of the profession will include key shifts.
Panelists also shared their own perspectives on technology’s opportunities and risks.
- David Powell highlighted real-world impacts of blockchain, cognitive business, big data, analytics on finance and accountancy; and the future profile of the profession. Huge volumes of structured and unstructured data provide significant opportunities to create deeper insights. This enables finance functions to provide these insights and better support decisions at lower cost. In practice, cognitive business is evolving quickly and penetrating finance and accountancy through cognitive forecasting, which allows more data points and evidence from longer periods. Organizations need to assess where they are on their own maturity path to being ready to exploit cognitive computing and cognitive business.
- Natasha Holbeck, Partner with Deloitte in its Financial Services Audit Practice & Vice-President of ACAUS, shared how Deloitte embraces technology to not only effectively and efficiently execute audits but add additional value to companies by providing analytics and insights. Technology allows Deloitte to anticipate client needs and value considerations, for example, by providing greater insights on industry trends and organizational risks, and providing access to data to improve operations and performance. Ensuring business leaders understand the value their organizations generate from audit insights is a significant development for Deloitte’s audit practice.
- Stuart Chaplin, Vice President Finance – Risk Management for Shell Trading & Supply and a member of the IFAC PAIB Committee, talked about how technology is disrupting finance and accounting in Shell. Having started the journey of implementing Robotic Process Automation, and applying it to various repetitive processes in shared services, the value proposition of business process outsourcing needs to shift from labor arbitrage to delivering innovation and insight. Increased application of robotics provides an opportunity for finance staff to spend more time on higher value added activities. Development and support to “high-grade” finance skills may be required to adapt to a future where robotics is more prevalent.
- Stephen Ibbotson, Head of the Finance & Management Faculty, Institute of Chartered Accountants of England and Wales (ICAEW) and a Technical Advisor on the IFAC PAIB Committee, highlighted how emerging trends are impacting ICAEW members. ICAEW proactively supports its members to be “life-long learners” to keep in pace with change and take charge of the innovation and changing dynamics around them. From an institute perspective, the blend of skills and competencies required by professional accountants is evolving quickly, and the types of services provided by accountants is developing apace. For example, there is an increasing trend for part-time virtual finance directors providing higher value services to various smaller enterprises that do not have full time finance and accounting expertise on staff.
Charles Tilley, Chair of the IFAC PAIB Committee, issued a wakeup call to close the meeting: while the profession has embraced technology, the pace of change is accelerating, and it will have a profound impact. A child born today will end up being a very different kind of professional accountant.
Technology and the changing role of finance and accounting functions and the skills and competence needed by finance professionals to remain relevant now and in the future is firmly on the PAIB Committee agenda. Its insights will help the profession act quickly to ensure the future relevance of members.
A summary of digital disruption and technology trends impacting finance and accounting is available at https://www.ifac.org/news-events/2017-05/technology-trends-impacting-finance-function-and-profession-overview
This article originally appeared on the IFAC Global Knowledge Gateway: www.ifac.org/Gateway. Visit the Gateway to find additional content on a variety of topics related to the accountancy profession.