The Professional Accountant in Today’s Industry
Being a Professional Accountant working in Business (PAIB) today is a very exciting and challenging career due to the transformation that most businesses are undergoing as a result of technological advances.
In today’s and tomorrow’s scenarios accountants are increasingly being asked to provide information and analysis to support decisions about all aspects of an organisation’s business. Providing insights solely on financial performance is no longer enough, more so because the financials only tell a part of a performance story, and do not reveal what is ultimately driving or destroying value across all areas of the business. As a result, accountants in business MUST get involved in the operations of the business organisation they work for.
Digital and data transformation is taking over the way businesses are run and transforming business models, while reinventing customer value propositions has become a prerogative of the finance function to improving operations through end-to-end digitization of processes, connectivity, automation, and real-time communication. Technology and digitization enable PAIBs and their finance departments to spend more time proactively helping their business to achieve sustainable success.
All types of organizations are disrupting or being disrupted. IBM’s latest global C-suite study1 shows that three-quarters of CFOs cite existential threats of some kind to their enterprises’ current business models. Six in ten CFOs point to more innovative competitors delivering more compelling value propositions. Three in ten indicate new entrants are taking market share, and approximately one in six point to some combination of product commoditization eroding margins, or online and mobile channel threats.
The half-life of knowledge, which represents the amount of time that elapses before half of the knowledge one has acquired is superseded, is rapidly reducing. This therefore means that new skills and ways of thinking must be taught in professional education and training, even though much of this learning is predominantly acquired over time in an ongoing learning process, supported by different work experiences. Moving jobs has become very common and today’s graduate accountants are expected to change over 15 jobs during their career. This will help create better accountants for the good of business.
The accountant in business needs to be outward-looking and have a broader perspective and mindset to be entrepreneurial and commercial; an able critical thinker and problem solver. Accountants will also increasingly need to work with colleagues from diverse disciplines across the business, so good communication skills for discussing with such multi-disciplinary teams is essential.
As a result of all this changing landscape, the accountancy profession and professional accountants will need to maintain their relevance. Many of their core professional values, skills and knowledge remain relevant although the context in which they are applied is radically different. Uncertainty and ambiguity require a different mindset and approach. Accounting for the business rather than the balance sheet IS the starting point for relevance. This is bringing a shift from accounting for the financial performance of a business to accounting more holistically for the business. Boards and management need their business accountants to provide a fuller and more candid picture of value creation, and accountants will need to continue to demonstrate their professionalism in line with their Code of Ethics in all aspects of their contribution to business.
Public expectations on business has never been greater and society is demanding that businesses do well, not only form a profitability point of view but also by doing good. This means that strong values of integrity and trust need to align with the value created for investors and shareholders as unprecedented levels of transparency and regulation are being introduced. Accountants in Business are now the custodians of this. Emerging and significant sources of risk such as climate change, cyber, fraud and corruption, and modern slavery, demand greater transparency as more uncertainty and complexity is added to decision making.
Over recent years, IFAC’s Professional Accountants in Business Committee2 has been exploring the future for professional accountants as business partners and value enablers. The committee’s discussions were based on members’ experiences of business and finance function leadership. The accountancy profession can adapt to its changing environment and ultimately transform towards improved capacity and sustained relevance. Several roles were identified that are growing in importance for professional accountants as well as the ones that will remain cornerstones, namely growth, germination, conservation, and creative destruction areas.
The Growth areas that build on current areas of importance:
- Co-Pilot. As a member of the leadership team, the accountant needs to think strategically to drive the growth and development of the organization. This is achieved by inspiring others, driving key values, developing overall vision, identifying growth and value-creating opportunities, and executing major change initiatives such as digital transformations.
- Navigator. Steering the organization toward achieving sustainable value creation and enabling integration and connectivity across the organization to deliver objectives. This is achieved by aligning strategy, managing risk, and connecting the organization, that is, people, processes and systems, and financial and non-financial information.
- Brand Protector. Moving beyond stewardship of company assets and financial performance to ensuring the protection of all critical tangible and intangible assets. This involves fostering business integrity and sound reputation through effective governance, risk and control, stakeholder engagement, and financial discipline, as well as ensuring decisions are based on sound financial and sustainability criteria.
- Influencer. Facilitating change by influencing people and their actions. This is achieved by building strong relationships across the business, and the ability to push ideas forward, as well as supporting and motivating people and teams to perform towards their objectives.
- The Germination areas that are in their infancy but will become a key part of the role in the future:
- Storyteller. Enlightening internal and external stakeholders on how the business is creating value over time, and the opportunities and challenges it faces.
- Technology and Digital Enabler. Enabling a data-driven business that utilizes technology and automation, digital and artificial intelligence, and data in ways that drive decisions and growth.
The Conservation areas that will remain cornerstones:
- Trusted Professional. The accountant must remain professionally objective and sceptical, challenging the organization and oneself when needed.
- Analyst. Providing decision-relevant insight into performance and decisions. In addition to traditional areas of financial expertise, the insights provided need to also cover various aspects of the business model, including data from internal and external sources.
The Creative destruction that challenges the status quo:
Transaction and Process Expert. The accountant needs to ensure efficient and effective end-to-end process and work flows in and across the business. This needs to be done through both manual processing and reconciliations, that is data entry and reporting increasingly automated and unseen, as well as by deploying technology such as robotic process automation, artificial intelligence and blockchain to enable a more effective and efficient finance function.
On a final note, the accountant in business should not fear the issue of technology and the challenges this poses. The fear that this will make accountants redundant is totally unfounded and, on the contrary, technology should be embraced as it makes the accountant ever more relevant in today’s world. As aptly said by economist Philip Auerswald3, “Whenever machines and tools substituted one type of human capability, new human experiences and capabilities actually emerged”.
1 Source: IBM C-suite Study 2018
2 Source: Information for this part of the article was obtained, by kind permission, from the working papers of the IFAC PAIB Committee regarding the Future Fit Professional Accountant Profile.
3 Philip E. Auerswald is an American author, economist, and co-founder and co-editor of Innovations. He currently leads the Global Entrepreneurship Research Network, an initiative of the Kauffman Foundation.