Collaborative & Inclusive: How ACCA and SOCPA Are Expanding the Profession’s Contribution to the Business Ecosystem
In many Islamic jurisdictions, there is a fast transition occurring: the increasing use of financial technology to advance speed, accuracy, and inclusion in the workplace. It is therefore important for professional accountants to have the financial literary stipulated by Sharia law, as well as an adequate level of digital readiness to understand and implement the appropriate FinTech tools. Professional Accountancy Organizations (PAOs) need to be aware of these trends to strengthen their relevance and ensure their operational models continue to meet members’ expectations.
In jurisdictions where professional accountants must adhere to Sharia law, it is important for PAOs to understand the expectations placed upon their membership by businesses. PAOs should take targeted actions to serve segments of their membership, such as accounting technicians or those working in business or small- and medium-sized practices. In the case of many jurisdictions in the Middle East North Africa (MENA) region, this means enhancing financial literacy pertaining to Islamic Law.
The Saudi Organization for Chartered and Professional Accountants (SOCPA) is addressing this need with a new hub that links together a community of like-minded small and medium-sized accountancy practices (SMPs), small and medium-sized enterprises (SMEs) and professional accountants in business, so they can share with, learn from, and inspire each other. The SMP Center will provide resources, insights and innovative tools needed for SMPs in the MENA region to stay ahead and relevant in a rapidly changing business landscape. The creation and backdrop of the new center is inspiring in itself—in collaboration and knowledge sharing with ACCA, the SOCPA’s SMP Center will be structured similar to Practice Connect | ACCA Global which has seen much success since its establishment. ACCA’s Practice Connect is a platform which brings together SMPs from around the world to share ideas, access ACCA’s Professional Insights research and guidance, and learn how to attract, retain, and develop leading talent.
Through the SMP Center, SOCPA will offer training programs, research publications, and professional services for those who are seeking to improve their financial literacy. This supports a future-ready profession by providing opportunities to develop and maintain professional skills and capabilities that align with societal needs.
Islamic Finance & Sharia-compliant Products
It is also important to recognize the growing demand for Sharia-compliant products outside of the region, in countries such as the United Kingdom as noted by TheCityUK in their recent report.
Worldwide, accountancy professionals have a limited understanding of Islamic law. This is a clear opportunity for PAOs to fulfill a need and speak out on the strong ethical foundation of professional accountants providing services in Islamic jurisdictions. For example, PAOs can:
- Enhance the public’s understanding of the contents of Sharia Law and how it relates to financial reporting and business transactions;
- Highlight the accountancy profession’s role in anti-corruption initiatives; and
- Speak out on issues of public interest and build a more inclusive profession.
ACCA has integrated learning around Sharia-compliant products into its Strategic Professional Level exams to ensure their members are equipped to understand the global business ecosystem. Furthermore, ACCA has partnered with the Chartered Institute for Securities and Investment on a standalone Islamic Finance Qualification to give practitioners an in-depth understanding of the various Sharia-compliant products.
Many professional accountants that render services in accordance with rules and regulations prescribed by Sharia law, utilize FinTech solutions that help reduce costs and improve services. FinTech has benefits, such as boosting productivity, but also costs. For example, it can potentially increase the workload of regulators who must ensure stability of the financial system and protect it from fraud. PAOs can support regulators by providing an additional layer of monitoring that would help avoid cyber-attacks, data leakages and data theft that can lead to misuse of information. It is important then that PAOs, SMPs and businesses alike fully understand the opportunities and risks presented by new technology solutions, as articulated in TheCityUK’s UK/Turkey Islamic Fintech working group report.
Islamic finance is largely prevalent in Muslim-majority regions which are developing and might lack consistent access to both financial as well as telecommunication services. PAOs in Islamic jurisdictions have a significant opportunity here to help their members adapt to new technologies. PAOs can train accountancy professionals to see the “bigger picture” and support a continuous education process that is flexible and relevant to the current business environment. Combined with available technological tools, professional accountants will be well-equipped to add value to their clients.
Promising Developments for the Region
In May 2021, Saudi Arabia’s Prince Sultan University launched the Global Islamic Finance, Tax, & Zakat Center (GIFTZ Center) to facilitate cutting-edge research and e-publications conducted by experts in the field of Islamic finance, zakat, and tax. With academic research available via the GIFTZ Center, PAOs in the MENA region can better engage with national stakeholders who are responsible for supporting financial education and assessing the needs of the population.