During the IFAC Professional Accountancy Organization (PAO) Development Committee meeting in New York in October 2018, committee members, many of whom have worked for or closely with PAOs and accountancy regulators at national, regional, and international levels, discussed the future-ready PAO and what this means for capacity building. A complete summary of the workshop can be found here. This article is based on their discussion and conclusions regarding the importance of PAOs considering new elements to their existing capacity building and strategic initiatives.
The world is increasingly complex, interconnected and uncertain. To meet future needs and demands, the accountancy profession will need to change. Professional accountants’ skillsets will likely grow to be multi-disciplinary and include data analysis, effective communication, relationship building and management, creative and critical thinking, and tech savviness, among others.
Professional accountancy organizations (PAOs) will continue to be essential in stewarding the change and supporting these future professionals. However, there might be challenges that stand in the way. Over the last decade, IFAC’s PAO capacity building efforts have been guided by our PAO Capacity Building Framework, which encompasses three main pillars: sustainability, relevance, and standards and enforcement. These pillars have served PAOs well but in light of the anticipated future challenges, additional elements should be considered.
Relevance remains essential for a future-ready PAO but instead of being one pillar, relevance and its underlying components should be ever-present to guide PAOs’ capacity building. PAOs will remain relevant—meaning adding and providing value to members and students, stakeholders, and society—and future-ready by:
- Understanding the importance of communication and branding and capitalizing on it—PAOs must be ready to communicate and engage with members, the public, and stakeholders on a daily basis;
- Have an open and inclusive mindset;
- Stay up-to-date and understand the technology that future professionals will need to use while simultaneously shaping the skills of professional accountants that technology cannot do; and
- Govern for performance, not just conformance.
Communication Encompasses All
In order to properly and continuously respond to a jurisdiction’s market demand and needs, PAOs must regularly communicate with members, key stakeholders, and other societal groups and these days, communication encompasses more than just a press release or interview. There is no room to act in isolation in the future operating environment. In-person outreach and meetings will be essential to real relationship-building. A mapping exercise of stakeholder needs can help PAOs identify needs and ensure they are able to meet them.
Additionally, just as the future professional accountant must hone their communication skills and convey their value-add capabilities, PAOs must do the same. PAOs will need to clearly communicate their value propositions as part of their relationship-building and management. To do this, branding and marketing strategies should be a central component of overall strategic thinking.
Open and Inclusive Mindset
Like any other organization, PAOs need to fight the instinct of “we’ve always done it that way.” Simply because PAOs have operated one way in the past does not mean those ways of operating are automatically right for the future. In fact, this type of thinking will lead to stagnation rather than progress. By having an open and inclusive mindset, PAOs can move past a culture of rivalry, elitism and legacy. PAOs can apply an open and inclusive mindset to multiple facets of their operations and ask themselves key questions.
- Can the business model be redefined by expanding the doors for more members—public sector accountants, accounting technicians, public accountants in business?
- How can the PAO pivot its activities to be open and accessible to the next and future generations?
- Can the PAO board be more diverse by age, gender, race, and profession?
- Can the PAO consider focusing more on other value-add activities and regulation (education, ethics, investigation & discipline) to mold future accountants?
- Could smaller, resource-strapped PAOs merge with another PAO in order to be sustainable and add value for members?
If the answer is yes to any of the above, the next step is to incorporate these objectives within the PAO’s strategic work plan. Don’t forget: a significant portion of shifting mindsets will be communicating about change!
Technology looms large for the accountancy profession’s future. Instead of fearing it, PAOs should embrace it and explore how to tailor its products and services—including education—to incorporate technology and prepare members to offer value-add services. Moreover, and equally important, PAOs should be prepared to enhance the skills of professional accountants that cannot be done by technology—those that will still require human thinking and knowledge. This might include relationship management, creative thinking and problem solving, and communication.
In determining these offerings, PAOs, in partnership with stakeholders, could assess the impact of technology on accountancy services in its jurisdiction and corresponding market needs.
Furthermore, new technologies will facilitate greater and greater cross-border interactions without even leaving town. This means that professional accountants can more readily provide services across borders—and will need transferable skills. PAOs should take advantage of signing and implementing mutual recognition agreements so that the competencies and skills of professionals are well-known and established.
Govern & Manage for Performance
Governance arrangements should be re-examined and refreshed with an eye to the future. PAO governance structures will need to be agile enough to take on challenges and achieve performance, value-add objectives. While a solid, legal framework is needed, PAOs will also need the flexibility to creatively address challenges that arise. This means having the right human capital—staff, management, and volunteers—supporting the institute’s operations. As the accountancy profession is a touchpoint for all businesses, PAOs may consider opening up positions on their committees to include other professionals and their expertise in decision-making processes. Since PAOs need to attract students to the profession, perhaps this means having a younger professional serve as a liaison to the board in order to bring new viewpoints.
There is no right or wrong approach to addressing these elements, although this conceptualization of the additional elements was a favorite at the recent PAODC meeting. In the shape of the sun, the conceptualization reminds us that the accountancy profession seeks transparency and serves the public interest.
The future is bringing new opportunities for the profession to better serve businesses, economies, nations, and push the world toward collective sustainable development goals. To be future-ready, PAOs must be prepared to think and act differently right now.