The accountancy profession is changing as new technologies increasingly impact the business environment. Institute of Chartered Accountants in England and Wales believes that the profession needs to be ready to adapt to these changes in order to stay relevant and deliver valuable services in a digital economy.
Digital technology is rapidly changing the business environment, with technology now at the heart of most business operations, strategy, and risks. This is increasingly impacting on the accountancy profession, presenting opportunities to increase the value offered to clients and businesses, but also raising long-term risks of reduced relevance or marginalization.
ICAEW’s IT Faculty has published a report that outlines how the profession needs to think about a technology-driven future, and how it needs to work together to achieve this in practice. Providing Leadership in a Digital World brings together a number of themes around technology and its impact on the profession.
The report takes stock of how new technologies are being applied across the profession. It focuses on three areas of technology that have particular relevance. First, given that accountancy is grounded in financial data, improved capabilities in data, including big data and analytics, will have a significant impact. The importance of data also emphasizes the need for good cyber security. Second, technologies such as cloud, mobile, and social media deeply change the way that we can interact with clients and across businesses. Third, new financial technologies, including cryptocurrencies and distributed ledgers, will also have significant relevance to financial services and associated areas of accounting.
On the basis of these technology trends, we see many examples of innovation across the profession. Cloud accounting is now mainstream in many countries and enabling greater collaboration between accountant and client. The large audit firms are investing in new capabilities in data and analytics to improve the audit process. Cyber security has risen up corporate agendas in the wake of large-scale data breaches, providing opportunities for new assurance and advisory services. Financial services firms are seriously looking at technologies such as blockchain to improve efficiencies. Mobile money innovations are transforming financial inclusion.
These opportunities were emphasised in a speech given by US SEC Commissioner Kara Stein at ICAEW’s Chartered Accountant’s Hall in 2015 about digital disruption in capital markets. Drawing on four themes of cyber security, big data, borderless business, and new business models, she challenged the profession to add more value in a digitally-based economy. New sources of data could enable greater assurance over non-financial data. Cyber security presents opportunities for important new services. Audit in a world of real-time data could be entirely reimagined to add more value.
So, there is no shortage of ideas and innovation across the profession. But there are also long-term challenges. In particular, we need to ensure that accountants have the skills to deliver new services, and can take advantage of new waves of automation.
Improvements in artificial intelligence enable greater automation of many bookkeeping and compliance services, leading to real fears about the jobs of the future. Of course, automation is not new to the profession—the introduction of computers automated a lot of accounting work and changed what accountants do. As a result, we remain very positive about the future of the profession and see automation as an opportunity to focus on more value-adding work. But jobs will change, and we need to understand the implications for skills and training models. It will also require a greater emphasis on life-long learning and the ability to adapt to new technologies through a career.
In addition, there are potential new competitors from the technology industry, both from the start-up community and established companies extending their reach. The FinTech movement, for example, is creating many interesting innovations that compete with established banks and financial institutions. The larger firms are partnering with or acquiring technology companies to boost their capabilities in the field. But smaller firms also have the opportunity to use networks and the digital infrastructure to expand their horizons.
The profession needs to rise to these challenges, and innovation by individual accountants and organizations is at the heart of a successful future. But the profession also needs to work together sometimes to support these ambitions. This could be in raising awareness of change and supporting individual accountants to build the skills and confidence in new technologies. It could be in collaborating to support the development of new markets or services. We may also need to work with standard setters and regulators to achieve deeper change where that is needed.
ICAEW has a long tradition of supporting its members on technology issues through its IT Faculty. We also want to work with others who are interested in technology in order to share the experience and insights of our members, as well as support the process of change. Our work in cyber security has shown the potential power of collaboration, partnering with the firms, government bodies, industry associations and others to share knowledge, develop consistent approaches and help businesses understand the issues.
The future of the profession is an exciting one, but only if we embrace new technologies and focus on the value that we can offer to businesses and our clients as a result.