Building a Future-Ready PAO
In November 2018, over 100 participants from 70 jurisdictions gathered at an IFAC workshop during the World Congress of Accountants in Sydney, Australia, to discuss the accountancy profession’s relevance in an ever-changing and challenging environment and professional accountancy organizations (PAOs) roles. These are the key workshop takeaways.
We are witnessing several shifts in the world right now—shifting demographics, technological change, economic interconnectivity, and competition for talent. These forces, when taken together, create a complex and challenging operating environment for the accountancy profession. They place new demands on professional accountants’ skillsets and roles.
It is clear that the accountancy profession needs to adapt in a meaningful way—but how? And where do PAOs fit into these changes? The two questions have significance worldwide for all PAOs and IFAC. The following key themes emerged:
- Build trust: Globally, there is an identified need to strengthen trust in the profession and PAOs are well-positioned to speak out on the strong ethics foundation all professional accountants. For example, PAOs can:
- improve the public’s perception of auditors’ independence;
- highlight the profession’s involvement in anti-corruption initiatives;
- advocate for ethical considerations in new business models;
- encourage strengthening and institutionalizing effective governance arrangements; and
- speak out on issues of public interest and efforts to build a more inclusive profession.
- Live by an ethical code: Professional accountants all follow an ethical code—a code of ethics is part of their bedrock foundation. But more can be done to highlight their trust and integrity. PAOs have the opportunity to ensure stakeholders and the public truly understand the importance of this foundation and the profession’s value. Speaking out and advocating on public interest matters can help to build more trust.
- Combine digital with emotional intelligence: PAOs have a significant opportunity to help their members adopt and adapt to new technologies and the Digital Age. They can also bridge the gap between compliance and consultation. To do this, PAOs first need to understand technology better. But it is also important to remember that while the world is focused on automation and digitization, nothing will replace emotional intelligence. Nothing will replace the social value of human interaction that accountants have with their clients. Combining digital advances with emotional intelligence is key to maximizing the value of, and analysis produced by, technological advancements.
- Educate for the digital age: Education in the digital age does not necessarily only mean teaching new technologies. It also requires shifting the focus from “hard skills” toward “soft skills” and valuing emotional intelligence more highly, while also teaching critical thinking, analytical ability, and innovation. It is also important to teach accountants to see the “big picture” and support a continuous education process that is flexible and always relevant to the current business environment. Combined with available technological tools, professional accountants of the future will be well-equipped to add tremendous value to their clients.
- Establish business models that meet members’ expectations: To meet the needs of the whole professional ecosystem, PAOs need to ensure that they analyze and understand the business expectations of the PAO. Like any business, PAOs have clients—their members. For members that might feel underserved, such as accounting technicians or those working in business or small- and medium-sized practices, it is especially important to understand the issues that are relevant to them. Only then can PAOs provide a tailored, supportive, and flexible approach. For example, a PAO might offer research and professional services for specific groups, provide tailored education, or develop implementation guidelines on relevant issues.
- Collaborate: PAOs can do more to work together by devising effective PAO networks to support each other. PAOs can also improve their collaboration outside of the profession with external groups, including business, the public sector, and academia. Specific examples include sharing information on cybersecurity risks between PAOs and government agencies and collaborating to manage the risks of new technology more broadly.
- Instill life-long learning: Professionals need to continuously improve their competencies. They need to ensure they develop and maintain professional skills and capabilities that align with societal needs. PAOs should focus on continually expanding their continuing professional development programs and topics to keep pace with changes in the workplace.
- Mentor cross-generationally: There is a generational skills gap that must be filled if the accountancy profession is to stay relevant as a career path for the next generation. Possibilities for the profession to address this gap include “reverse mentoring” and continuously analyzing, strategizing, and changing in response to emerging trends. This necessitates early engagement with younger students and developing attraction and retention strategies.
- Use innovative thinking: It is clear that while accountancy’s foundation might remain the same, the profession needs to look boldly at what to do differently to adapt and be ready for the future. Changing mindsets and retaining the ability to be flexible will be crucial. There are also innovative areas where the profession can act as a champion and play a greater role than it currently does. These include: gathering and evaluating climate change information; supporting transparency efforts across borders; and adopting and advancing integrated reporting. What these ideas have in common is that the profession can spearhead the use and incorporation of a broader set of measures for their work that includes people, the planet, and profit.
“We lead with humanity when we are faster to respond [and] smarter through thought leadership, technology, and talent management. We lead when we are louder in defense, louder in our advocacy, when we are in action and are communicating our social value.” – WCOA Workshop Participant
The future brings new opportunities for the accountancy profession to serve businesses, economies, and nations better, and push the world toward collective sustainable development goals. To be future-ready, PAOs must be prepared to think and act now.
Success requires a systemic approach to change: a cycle of transformation whereby PAOs envision, plan, implement, and assess, continually learning as they go and keeping the central theme of relevancy in mind.
This workshop led to a quality conversation and helped IFAC build its understanding of the issues and concerns most pertinent to our members. These are the seeds that will grow into larger ideas and global outreach in 2019 and beyond. By joining our voices and energies together, we can prepare a future-ready profession.