The Disruption in Accounting and Finance

When I received my offer letter to pursue a degree in accounting and finance, the first words from my dad were, “Accounting is a good field, and you will never be out of a job.”

Over the last one year, I started to question this statement that Appa (my Dad) made, on whether this profession is sustainable. With the immense intervention of technology in everything we do, I started having that ‘alien invasion’ feeling.

Things were happening so quickly around me that there was no time to cope. There was chatter that in 10 years, there would be no more jobs or roles for accountants, software would take over the tasks assigned to an accountant, artificial intelligence (AI) could perform an audit, etc.

I took my time to ponder things through and then, I woke up to reality. Nope! None of this is ever going to happen. Appa was right.

Technology is not the enemy

I view technology as an enabler, not a disruptor – neither is it a destructor. We are in the era of information and we need to come to terms with the fact that accounting is an information system.

The way of transacting business processes has evolved with the utilisation of information technologies in enterprises and this has influenced accounting closely. Keeping up with the changing conditions of accounting is not a choice anymore, but a must.

Educators, practitioners, regulators and professional bodies must be led to new pursuits. Over the last two to three years the Big 4 professional firms, global organisations such as the International Federation of Accountants (IFAC), Association of Certified Chartered Accountants (ACCA), Institute of Chartered Accountants England & Wales (ICAEW), Chartered Institute of Management Accountants (CIMA) and local authorities and regulatory bodies such as the Malaysian Institute of Accountants (MIA) and Bank Negara Malaysia (BNM) have published various articles, blueprints and guidance notes on preparation for the digital future.

It is necessary for university students to embark on a journey in the information era by utilising digital resources and an interactive environment, and be able to convert these into practical applications in their future careers.

In order to achieve this, students must embark on target-driven accounting courses, where the ability to evaluate and interpret information beyond recording, and make a difference through information and communication technologies can be inculcated. Tools like Jetpack Workflow can be incredibly valuable in this transition, helping students and professionals manage their tasks efficiently.

The restructuring of accounting education and development of content by considering present conditions are necessary in order to train graduates to have sufficient skills to respond to the needs of this changing era.

Read this: How Are You Responding to the Wave of Digital Disruption in Your Workplace?

The era of blockchain

There is no question that one aspect of technological advancement in accounting and finance – blockchain – is gaining momentum.

Blockchain delivers the potential for a powerful new form of transactional trust, and this is seen by some as possibly the most important technology-driven innovation since the introduction of the Internet.

The extent to which blockchain impacts capital markets and the corporate reporting process depends on how widely it is adopted. To the extent blockchain technology becomes established, government and regulatory bodies, financial institutions, law enforcement agencies, businesses, certified public accountants, lawyers, technology experts and all other stakeholders need to be involved.

New rules, controls, best-practice models and business skills will be needed to make a smooth transition to a blockchain-enabled future. In order for accounting graduates to be able to apply this structure in enterprises, they will need to obtain the relevant accounting education and work towards the implementation of these systems in enterprises.

You may be interested in: Digital Disruption: Why Design Thinking Helps

The impact of IR4.0

The prospect of Industrial Revolution 4.0’s arrival is both credible and intriguing. Though still at an infancy level, we should not wait another minute in embracing its journey to maturity. Professional accountants need to anticipate and address its potential.

You may have come across opinions that careers might potentially be lost, roles destroyed and accounting and audit services made redundant by new digital technologies. I personally don’t think this is true.

There are vast opportunities for those with knowledge of new cyber-physical systems. Accountants can prepare for this new era by increasing their awareness, building knowledge through professional development and continuous education, encouraging technological skill development in new entrants, and collaborating with other professionals.

Accountants operating in the fourth industrial revolution will need to recognise that they have less control over accounting data compared to the past, as they are becoming part of a transdisciplinary mix of advisers.

For example, environmental accounting is heavily influenced by physical real-time information largely in the hands of engineers. New technology allows a greater analysis of business drivers, using insight and actionable analytics to achieve a competitive advantage.

The evolving role of accountants

We need to realise and acknowledge the possibilities inherent in AI. Softwares do perform some number crunching and automate repetitive simplistic tasks more efficiently than any human could possibly do.

As the technology continues developing, the robots will only get better. The implicit benefit is that human accountants can then be freed up to focus on more complicated issues.

Consider this truism. It is no longer an accountant’s job to collect data but rather to interpret it, to make better and more informed decisions. Simple.

Leave it to AI to ensure accuracy of information. With the niche of speed, human accountants will be empowered to verify, derive, synthesise and strategise almost immediately.

Now isn’t this a breakthrough? That’s what we call collaboration in the era of technology.

Technological developments have removed the need for snail-like, manual, redundant processes, enabling accountants to spend more time on adding value to the business. We keep reinventing the wheel with every client. We need to deviate from book-keeping and stewardship and convert ourselves to strategic business partners.

Leave the routine roles and embrace the strategic ones mirroring the actual education needed for an accountant. No more non-value added, time consuming roles for an accountant such as keying in dividend vouchers and spending weeks at an oil rig just to measure levels. Thinking about the new challenges facing accountants is a very exciting prospect!

As most accountants don’t seem to have the luxury of time, even thinking about different ways of working is impossible. Most accountants will probably agree that change needs to take place. Now, we may actually have an opportunity to finally have work-life balance and a better quality of life.

It is important for us to always remember that with change, comes opportunities. Move quickly, get with this change, and stay agile. Some people may still need persuading that technology is the way forward, but we need to remember that our competitors are using technology to drive growth, so we would not want to miss this train. This revolution cannot be ignored.

Grasp this inexorable tide of technology!