The “Sharing Economy” Presents Challenges and Opportunities for the Profession

Alta Prinsloo, Paul Thompson | November 17, 2015 | 3

Over the past few years there’s been exponential growth in the sharing economy, characterized by collaborative consumption where we share space, cars, skills, whatever. Perhaps the most prominent example of this trend is the success of Airbnb and Uber, businesses that have leveraged technology to create virtual marketplaces matching supply and demand—for a room, a ride, a task, etc. These businesses have significantly disrupted the hotel and taxi industries and broken down traditional business models, and, in some cases, now accommodate and transport more people than their traditional equivalents.

This trend surfaces an important question: could the accountancy profession find itself similarly “disrupted,”—or Uberized, as Bill Sheridan, Chief Communications Officer for the Maryland Association of CPAs, puts it? Rachel Botsman, a global expert on the power of sharing and collaboration, in conversation with Bill Sheridan, says the accountancy industry is already being disrupted. To be sure, the sharing economy presents our profession with a unique set of challenges, but, by the same token, also corresponding opportunities.

On the challenge side of the ledger there is, for example, a risk that accounting firms could be substituted by individuals—including those that cannot legitimately call themselves a professional accountant—offering discrete tasks, like bookkeeping and tax returns, perhaps through an app.

On the opportunity side of the ledger there's the fact that the success of businesses like Uber is based on trust, influence, and "reputation capital," as Botsman explains in a TEDTalk. Trust and reputation are things the accountancy profession prides itself on. IFAC President Olivia Kirtley, speaking in Ghana recently, said that ethics, trust, and credibility were the three key pillars of the global accountancy profession and that a professional accountancy qualification was a visible reminder of integrity, expertise, and trust, and a mark of a trusted advisor. This reputation of trust gives our profession a crucial competitive advantage in the sharing economy. We just need to be smart at leveraging it.

So what might the sharing accountancy economy look like? Botsman looks at three apps that offer a glimpse, each of which is more disruptive of the existing accountancy business model. First, TaskRabbit is an online, mobile marketplace that allows users to outsource small jobs and tasks to others in their neighborhood. Users name the task they need done and the price they are willing to pay, and a network of pre-approved contractors bid to complete the job. Could simple accounting services like a tax return or bank reconciliation for a small business become a TaskRabbit task? Second, UpCounsel connects clients with vetted attorneys who best match their needs and budgets—without a law firm being involved. Again, it’s easy to see how this could be applied to accountancy. And third, VouchedFor is a UK-based service that matches clients with independent advisors, including accountants—completely cutting out accountancy firms.

How is IFAC helping the global accountancy profession prepare and adjust to trends such as the sharing economy? Our Strategic Plan for 2016-2018—which has been informed by a survey of our member organizations and key stakeholders on macro trends, their implications for the profession, and the possible IFAC responses—identifies rapid advances in Information and Communications Technology (ICT) as one of the trends that is having the most profound impact on the profession, and we aim to help the profession respond in a robust and timely manner to such trends.

One of the ways we do this is by leveraging our role as a credible knowledge convener and providing a global forum to share, synthesize, and create knowledge to support professional accountants in providing high-quality services. For example, the IFAC Global Knowledge Gateway, on which this article is posted, seeks to match demand and supply for news, resources, and debate for the profession. On the Gateway and through other channels, we hope to gather a variety of responses to emerging trends impacting the profession and share them for the benefit of all. Another way IFAC helps the profession prepare for trends with seismic implications for the profession is through speaking out to raise awareness and put the profession on alert. For example, in October, President Kirtley spoke at the 70th Congress of the CSOEC, The Digital Accountant, regarding technology and how it is impacting our profession.

In her conversation with Sheridan, Botsman concludes by saying, “We have three options, essentially a Hobson’s choice: bury our heads in the sand and wait to die; fight the disruption and lose; or become pioneers and embrace the disruption as an opportunity.” In the sharing economy, businesses will either disrupt or be disrupted. We need to find different ways to offer value to our clients. We need to find ways to leverage technology. But, above all, we need to realize the opportunity presented by our profession’s reputation, integrity, and trust.

Issues and Insights

Alta Prinsloo

Alta Prinsloo

Executive Director

Alta Prinsloo is an executive director with primary responsibility for IFAC’s new approach to advancing education for future-ready professional accountants.Ms. Prinsloo joined the International Auditing and Assurance Standards Board in 2002, and served as deputy director before transitioning to IFAC, where she has served in various executive roles, including governance and nominations, strategic planning, risk management, finance, operations & information technology, human resources and intellectual property. She has also overseen a wide variety of initiatives, including accountancy capacity building, Accountability.Now.—an initiative focused on transparency and accountability in the public sector—the IFAC Member Compliance Program, professional accountants in business and in small- and medium-sized practices, and the IFAC Global Knowledge Gateway.From 1997 through 2002, Ms. Prinsloo worked at the South African Institute of Chartered Accountants, becoming its technical director in 2000. In 1996, she worked at Amalgamated Banks of South Africa where she was responsible for professional development of the internal audit function. Prior to that, she worked in the national technical and training office of PricewaterhouseCoopers.Ms. Prinsloo is originally from South Africa, qualified as a Chartered Accountant (SA), and holds a master’s degree in financial management. See more by Alta Prinsloo

Paul Thompson

Director, European Federation of Accountants and Auditors for SMEs

Paul Thompson is EFAA Director and a consultant dedicated to thought leadership and development of the global accountancy profession. From 2004 to 2016 Mr. Thompson worked for IFAC latterly as Director, Global Accountancy Profession Support, a role that extended to overseeing the IFAC Global Knowledge Gateway, research and innovation, and activities in support of small- and medium-sized practices (SMP) and professional accountants in business (PAIB). Mr. Thompson also serves on the SME Implementation Group, an advisory body to the International Accounting Standard Board (Board), and is a member of Nottingham University Business School Malaysia’s Industry Advisory Board (IAB), an advisory group providing strategic advice to the Business School. He advises developing professional accountancy organisations in Europe and Asia. Previously Mr. Thompson worked for Touche Ross & Co., London before going on to lecture on corporate reporting and analysis at universities in the UK, Singapore, and Malaysia. He has a number of publications in academic journals and the professional press in the areas of ethical finance, corporate reporting, corporate governance, integrated reporting, practice management and the future of the profession. Mr. Thompson graduated from the University of Warwick with a bachelor of science in accounting and financial analysis and is a fellow of the Institute of Chartered Accountants in England and Wales. Mr. Thompson is an internationally ranked masters distance runner. See more by Paul Thompson

Join the Conversation (3)

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Ian Jenkins November 24, 2015

We need to realize the opportunity presented by our profession’s reputation, integrity, and trust? Unfortunately the status of the profession is determined by the politics of each of 200 national governments. Last week, for example, we saw high profile damage to the profession. A report by an 'official' agency was published which criticised the audit of an international bank that was eventually bailed out with billions of public money. But the final report failed to address the national politics involved - available elsewhere on public record.

Victor Melinceanu November 18, 2015

In Republic of Moldova, the accounting profession is organized in aforementioned manner, by individuals (99%), as employees, being and not being qualified/certified (a very low percentage rate of accountants are certified). Beginning with business globalization, this level of qualification is not enough to respond to internal and external reports’s users demand of trust, credibility and ethics. No matter who offers bookkeeping, accounting company or individual, neither one nor other will respond to stakeholders’s expectations if they will not keep their qualification at the level established by IFAC.

Szymon Radziszewicz November 17, 2015

Yes, most likely. Maybe even "Google-carized" with the AI technologies. So #AccountantsThatCode may be one way of taking the head of out of the sandpit. The profession can definitely reinvent itself. https://www.linkedin.com/pulse/little-lost-robot-accountantsthatcode-szymon-radziszewicz

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