Thoughts On The Future Of Accounting

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Wednesday, July 11, 2018   11.11AM / Olufemi Awoyemi

 

Being a speech delivered by Olufemi AWOYEMI, FCA at the 48th Accounting Technicians’ Scheme, West Africa (ATSWA)’s Induction Ceremony for New Members held at the ICAN centre, Lakeview Estate, Lagos on July 11, 2018.

 

The President of the Institute,

The Vice President,

Deputy Vice Presidents,

Council Members,

Revered Past Presidents here present,

Inductees,

Invited Guests,

Distinguished Parents and Friends of Inductees,

Gentlemen of the Press,

Ladies and Gentlemen

 

Permit me to start by thanking the President of our noble Institute, Mr. Alhaji Razak A Jaiyeola, BSc, ACFE, CRISC, FCA, for inviting me as the Special Guest of Honour.

 

Let me also use this opportunity to warmly congratulate the all Inductees on the important stride you have made in pursuit of your accountancy career by successfully completing the Accounting Technicians’ Scheme, West Africa (ATSWA)’s qualifying examinations. It is my hope that you will not stop there and see this as an encouragement to do more.

 

The accounting technician programme has on its register over 120,000 students enrolled out of which 25,000 are graduates of the scheme. This graduates serves as middle level accountants in banks, audit assistants in audit firms, finance related positions in the civil service etc.

 

Noteworthy is the point that over 10,000 of the 25,000 graduates (AATWA Members) are ACA’s already; a good conversion ratio which validates the purpose for setting up the programme equally run in 13 other countries viz: Sierra Leone, Liberia, Senegal, Togo, Mali, Niger, Guinea, Ghana, Cameroon, Gambia, Benin, Cote d’Ivoire, and Burkina Faso; which makes the certificate acceptable and recognizable within the West African region through the support of ABWA (Association of Accountancy Bodies West Africa).

 

Over the years, different countries have implemented several changes in the syllabus of the ATS scheme as it relates to the country to suit the current trends and development in its economy.

 

Today is therefore a good day to reflect on the profession and what the future holds.

 

Introduction

There is a lot going on in the country about the profession which has taken a lot of my time and attention (and most people really) as I believe they impact on the core values of the profession; and you can take your pick from the many issues around the dominant conversation around corruption (of all shapes and form – frauds, scandals, ethical violations and forgery to mention a few) and the role of or absence of accountants.

 

These acts have consequences, none the least, the impact on perception, reputation, and integrity equity the members and the institute enjoys.

 

These problems did not start today but the reaction and consequence of the Enron scandal with Arthur Andersen is not the same as what happened in South Africa with Mckinsey and KPMG's South African unit who recently announced that it will reopen past audit files as it battles to salvage its reputation from scandals in the country.

 

From board issues in some quoted companies, to public servants, to Governors, agency heads, ministers and regulators……it is an open season of suspended reasoning.

 

Markets rely on trust which the profession provide to bridge the gap between entrepreneurs who need capital and lenders and investors who can provide capital; apart from the nexus between governments and tax payers under a social contract.

 

The public and markets are hurt by all of these.

 

 

Separating Distractions From Threat

Yet, through all this, I am quickly reminded from training that they could and should be collectively described as “distractions”.

 

I have categorized them as distractions not because it does not matter or that the Ethics & Practice committee(s) of the institute can rest on its oars; but because we face a much more serious issue; one of RELEVANCE and RELIABILITY.

 

This to me is far more existential and of a far reaching consequence than procedural issues when placed in the context of a paradigm shift driven world.

 

Thus, this brief presentation does not aim to explore and dimension the distraction vis-à-vis threats or make predictions, but rather to stimulate discussion about a broad range of emerging and converging technologies and their potential to influence the accountancy profession.
 

The thoughts presented are based on available, established and emerging technologies, and the ways in which they could potentially impact on the profession over the next five to 10 years and beyond. 

I am also going to lean on my multi-disciplinary background and privilege of serving on the Governing Council of the Fintech Association of Nigeria to stay on message.
 

Accounting and Technology

Accountants have always exploited emerging technologies to help them to complete their tasks more accurately, quickly or simply: from the incised clay tablets of the Sumerian scribes, through the adding machines of the 19th century, to the calculators and computers of the 20th century. But all of these technology developments were simple propositions by comparison with the myriad technologies that are now rapidly reshaping the worlds of business and accountancy. 

Heading into the 21st century technology trends in cloud, big data, mobile and social collaboration are converging to change the ways in which we consume information technology resources, share knowledge and experiences, and access products and services. At the same time, these trends are also underpinning and influencing developments in cyber security, digital service delivery, robotics, augmented and virtual reality, and artificial intelligence. A ‘new normal’ is emerging. 

Accountants in practice and in the finance function are part of that connected world. This is changing the ways in which they communicate and collaborate with those in the businesses they work with and for, and shaping new working patterns. 

It is providing accountants with the opportunity to automate and de-skill time-consuming and repetitive work and focus on higher value work, so that they can consolidate their role as advisers on finance and business. 

As valued advisers to the organisations they work with and for, accountants must maintain a watching brief across a broad range of technologies and trends.

 

Finance professionals need to consider the challenges and opportunities created by new and emerging technologies, and then use their analytical and problem-solving skills to assess their potential influence, so that they can provide the financial insights needed to guide any affected tactical and strategic business decisions.

 

It is impossible to predict the future with any degree of certainty; but you can see the following:

·    Non accountants developing apps and solutions e.g. Accounteer

·    Drivers of new technology are not hamstrung by qualification or certification

·    Roles are changing…book-keeping is essentially fast becoming an action that will be matched to your transaction systems

·   Convergence occurring to blot out lines or silos in the profession i.e no stockbroking but securities professional

·      Increasing need for higher regulation to adjust to the ‘new normal’

·    From reporting and analysis to analytics and predictive information

·     Others……………

 

By keeping informed about technologies as they evolve, considering new technologies as they emerge, and then assessing their implications for finance professionals and those they serve and support, accountants can be prepared to minimise the burdens and maximise the benefits. In this way the profession can exploit technology and potentially change the scope of what it means to be an accountant. 

ACCA (the Association of Chartered Certified Accountants), the global body for professional accountants issued in May 2013 the Ten technology trends:

·         mobility

·         cloud

·         social collaboration

·         digital service delivery

·         big data

·         payment systems

·         cyber security

·         robotics

·         augmented and virtual reality; and

·         artificial intelligence.

 

Today, they are all real. 

The shelf life of technological changes is much shorter than before and the ability to respond is expected to be faster; expecting professionals to have predictive capabilities and competences.

 

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Closing Remarks

At the moment it seems clear that these technologies are coming together to create the ‘new normal’. 

Accountants have a significant role to play in this increasingly connected and interconnected ecosystem. The internet and cloud-based technology resources are reshaping myriad aspects of business: from the way we finance, resource and develop new and existing enterprises, to the way we create, buy and sell products and services. 

Nothing in the future is certain, and the unforeseen interactions between these technologies promise to be both interesting and challenging. 

Permit me to quote from the ACCA report on the expected impact of technologies on the profession.

 

The Impact of Technologies on the Accounting Profession

1.   By 2015 it was expected by the ACCA that most accountancy firms will give clients an app they can use to access their business/accounting data from a mobile device such as a tablet or smartphone.

 

2.   Accountants will need to re-skill to retain their previous role as the gatekeeper of corporate data and the opinion provider on data security, preparedness and value.

 

3.  The profession must develop new ways to measure and value technology costs and benefits for the world of cloud computing, blockchain, cyptos, fintech, AI and social networking.

 

4. The accountancy profession will shrink as software vendors build progressively more finance expertise into self-learning products and services using AI which will impact the profession.

 

5. The CFO of the future will need to know as much about technology, security and intellectual property as they do about financial management.

 

6.   Unless accountants embrace technology, appreciate the short shelf life of new technologies and the importance of cyber security; they will become extinct – individually and as a profession.


7.  By 2020 audits may well be real-time. Regulators will conduct them automatically pulling data in from business systems and sensors embedded in everything – from stock to livestock and even human beings.

 

8.   Already, accountants are now required to form an opinion to be included in the Cybersecurity Audit Report. This report presents the results of the vulnerability assessments and penetration testing that security specialists performed on a company's external and internal facing environment. AT present, the know-how to deliver this presents both a challenge and an opportunity for the profession.

 

9.  Accountants must exploit emerging technologies to attract talent and to develop and manage existing talent….as the firm of the future will be significantly different from what currently exists.

 

10. By 2025 all digital data will be available to everybody. At this current time, we need to adopt varying standards for the profession related to technology and the derivatives thereon …i.e. valuation, reporting, transaction valuation, data storage, cloud accounting, cyber security, etc
 

Thank you for your time.


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Related Links (PDF)

1.       Drivers of change and future skills - ACCA Global

2.      Technology trends: their impact on the global ... - ACCA Global   May 2013

 

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