What does the future hold for the accountancy profession?
David Culley • 10 April 2020
Accountancy institutes are entreating members to close their skills gaps so that they can translate threats associated with technology into opportunities.
What does the future hold for the accountancy profession?
Technology is revolutionising all aspects of our working lives and the accountancy profession is no exception. Research by Oxford University published in 2013 identified accountancy as one of the professions most susceptible to computerisation, with a 94% probability that the current role will be automated by 2033. (Frey & Osborne, 2013)
Professional institutes including ACCA, CIMA and ICAEW are entreating their members to understand this revolution so that they are not rendered obsolete but instead translate this threat into an opportunity to reinvent themselves.
Now is the opportunity of a lifetime for the accountancy profession to build on its strong foundations and evolve. It’s a unique chance to repurpose the profession for the modern world of work. (ACCA, 2020)
This blog outlines just two of the themes I am currently researching for a report, The future of the accountancy profession, to be published in the coming months. This report will distil the latest academic thinking on the subject of future-proofing accountancy and combine it with the real-life experiences of industry leaders. Its ultimate purpose is to provide professional accountants with a practical road map that enables them to avoid the potential career dead-ends ahead and instead exploit the new development opportunities that are emerging.
To request a free copy of this report when it is published, simply register your email address at the end of this article.
Generation Next
Accountants who have been qualified for over a decade face more obstacles in their career path than those who are newly qualified.
ACCA, CIMA and ICAEW have all made major changes to their syllabi in recent years in order to recognise the increasing importance of technology and nurture new, value-adding skill sets. As a result, those entering the accountancy profession today are relatively well equipped to deal with the changes arising from technology and globalisation. (ACCA, 2016)
However, accountants qualifying under old syllabi will have developed more traditional skills in an academic environment where the full power of technology was not fully appreciated. The institutes have provided ample research on this, but it is up to each accountant to understand and close this gap through continuing professional development. The risk here is that those who have not identified and fully understood their gap will be left behind.
Data analytics
It’s up to accountants to decide whether data analytics is an opportunity or threat to their careers.
Although we all generate huge volumes of electronic data each day, there is a widespread lack of appreciation of data’s value as fuel for machine learning. In fact, The Economist announced in 2017 that “the world’s most valuable resource is no longer oil, but data.” (The Economist, 2017)
Few people would dispute the stereotype that spreadsheet analysis is the domain of the accountant. However, data analytics has been revolutionised by big data, machine learning and Artificial Intelligence. Freed from the constraint of a two-dimensional Excel sheet, machine learning has reached a point where complex accountancy activities such as fraud detection and tax advice can be performed more effectively by a machine than a human. (ACCA, 2019)
While this might suggest a bleak future for the accountant, data analytics creates an opportunity for the accountancy profession to take the lead in setting and delivering an organisation’s data strategy. However, for this to work, accountants need to understand how their current skill set feeds into this opportunity and also to identify gaps in their knowledge and understanding of this rapidly changing field.
Conclusion
As technology exerts ever more influence over our domestic lives and careers, we would be forgiven for feeling we are becoming subservient to it. However, technology needs to be seen as a tool to be harnessed so that we can live and work more efficiently and effectively. This is especially important for accountants who face a technology-created crossroads.
Accountants are being asked by their professional institutes to reinvent themselves. By pro-actively identifying gaps in their skills and knowledge, accountants will be ideally placed to take full advantage of the challenges the future offers. However, those choosing to remain as they are risk finding themselves obsolete.
For a more in-depth exploration of these and other issues impacting on the accountancy profession, as well as a road map of next steps, register your email address below and you will receive a free copy of the report, The future of the accountancy profession, when it is published.
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Chances are, many of the apps on your smartphone were free to download. This might feel like a bargain: a shiny new app in return for watching the occasional advert. However, the reality is that app providers are tapping into a far more lucrative source of income: your data. Companies have always sought information about their customers to influence their behaviour, but big data analytics takes this to a whole new level. Have you ever had an online advert pop up for something you’d been talking about a few hours earlier? This is just one example of how well companies know and understand you. In fact, such is the volume of data available, many these companies can claim to ‘know you better than your spouse does’. Your data is a gift to any retailer trying to pitch its products or any politician trying to win your vote. In 2017, The Economist declared that ‘the world’s most valuable resource is no longer oil, but data,’ in recognition of the value that global giants such as Amazon and Facebook were extracting from consumer data. The wider implications of this were demonstrated in 2018, when Cambridge Analytica was found to have harvested the data of up to 87 million Facebook users in order to influence voters in the UK Brexit referendum and the 2016 US Presidential election. General Data Protection Regulation (GDPR) attempts to protect consumers by prohibiting companies from using personal data without the consent of the data subject. However, we throw away this protection whenever we agree to terms and conditions without reading them. Deloitte research in 2017 found that 91% of us admit to doing this and, in a famous experiment at St Pancras Station in London, consumers consented to give up their first born child in return for free WiFi access! So, the next time you click AGREE to a set of terms and conditions, bear in mind what you are giving away… Bibliography Professor Frank Luerweg, The internet knows you better than your spouse does , Scientific American, March 14th 2019. https://bit.ly/2UDf5eL The Economist, The world’s most valuable resource is no longer oil, but data , May 16th 2017. https://econ.st/2UDJuJX Deloitte (2018), Security & Privacy in the age of IoT , https://bit.ly/38fKqZ6 The Guardian, Londoners give up eldest children in public Wi-Fi security horror show , 29th September 2014. https://bit.ly/2tINCxe
The 2019 BBC series Years and Years presented a vision of the near future where, due to advances in technology, a chief accountant was demoted to an office cleaner in just over a decade. As with other things in that drama, the idea isn't as far-fetched as it might sound. Research from Oxford University published in 2015 estimates that accountants face a 93.5% probability of being made redundant by technology. This makes sobering reading for those of us planning to make a living as an accountant. If machines are going to make us redundant, will we need to find other work to do? The answer is yes. And no. As accounting software becomes more sophisticated, the need for accounting knowledge and human intervention reduces dramatically. Companies such as Xero already offer ‘intelligent bookkeeping’ which is learning how to process invoices, perform bank reconciliations and submit VAT Returns. ACCA’s 2019 report, Machine learning: more science than fiction , describes how Artificial Intelligence is already outperforming human accountants in fraud detection and tax advice. In recognition of this inevitability, ACCA, CIMA and ICAEW have been reassessing how an accountant can continue to add value in the modern business environment. If accountancy is ‘ the sourcing, analysis, communication and use of decision-relevant financial and non-financial information to generate and preserve value for organisations ,’ they have concluded that the focus for accountants needs to shift from the sourcing and analysis of information (which technology out-performs humans at) to its communication and use. All the institutes see this, not as a radical redefinition of what it means to be an accountant, but a natural evolution to meet the demands of a changing environment. In order to equip the accountants of tomorrow with the skills they will need, these institutes have made significant changes to their professional exams. While this will ensure the survival of the professional accountant, those of us who are already qualified will need to catch up or there is a real risk we could end up as the office cleaners… Bibliography Frey, C.B., Osborne, M.A., The future of employment: how susceptible are jobs to computerisation? , 17th Sep 2013, Oxford Martin Programme on Technology and Employment, University of Oxford. https://bit.ly/2SeBjlT Vaidyanathan, N., Machine learning: more science than fiction , April 2019, ACCA. https://bit.ly/2SCoP6o CGMA, Guide to the global management accounting principles , October 2014, AICPA. https://bit.ly/2UGS3nm
