Revolutionising accounting for a new era
WHEN talking about the Industrial Revolution, images that often come to mind include the extensive use of steam power, the birth of heavy machinery and ironworks, and bleak factories in England.
However, two more industrial revolutions have since passed and the 21st century is paving its way for the Fourth Industrial Revolution (IR 4.0), which is seeing the rise of autonomous decision making of cyber-physical systems and machine learning through cloud technology.
In simple words, IR 4.0 is the usage of artificial intelligence (AI) and the Internet to transform age-old processes and operating procedures across all industries.
With such change taking place, what does this mean for the accounting industry and where do accountants find their relevance in an era that looks to automate everything?
Calculating assets
In an interview with international education provider Kaplan, Malaysian Institute of Accountants’ (MIA) chief executive officer Dr Nurmazilah Datuk Mahzan said, “Among the current trends that are creating waves in the accountancy profession are big data and analytics.
“Companies of all sizes create massive structured, unstructured and semi-structured data every day. Organisations harnessing big data would be able to find new insights and discover unique patterns of their customer behaviour or even create new businesses that were previously not possible.”
Echoing her sentiments is Bryan Chung, Fellow of CPA Australia (FCPA), divisional councillor at CPA Australia (Malaysia), who believes that even though AI is good at matching patterns and automating processes – making technology useful to many functions in companies in the process – accountants still play a vital role.
He says, “While there is a lot of hype surrounding blockchain and AI in accountancy with more firms taking steps to increase or experiment with their use, it is unlikely that accountants (or auditors) will be out of a job anytime soon.
“It is likely that most of the administration process will be the first to be introduced to AI. Increasingly, accountants in business are given the opportunity to be less involved in automated operations and focus more on big-picture strategies, which gives a clear indication of the type of skills required in the near future.”
The challenge, however, is turning the current workforce in the accounting field into professionals who truly understand the implications of IR 4.0, not just in terms of their personal skills but also movements within the industry.
Discovering market potential
Gone are the days when sales numbers, website traffic and KPIs were sufficient information to measure monthly net profits.
In the same Kaplan interview, the organisation’s global professional accountancy head Tanya Worsley said, “Businesses today depend on their accountants beyond purely checking financial figures and balancing books.
“Financial professionals are expected to be able to provide their clients with actionable insights that can add value to the organisation’s overarching strategic goals.”
The changing role of accountants in the digital economy is what prompted MIA to launch the Digital Technology Blueprint in July this year, a document that outlines the five driving principles to help guide Malaysian accountants to respond appropriately to digital technology.
These principles are related to digital technology trends, the identification of capabilities, harnessing of digital technology, funding and governance.
Accountants who fail to stay updated with the latest trends and knowledge will cause their employers to lose out in the long run, while competing firms take advantage of the evolving cloud system.
For these reasons, upskilling and obtaining professional qualifications from MIA or accountancy bodies such as CPA Australia, Association of Chartered Certified Accountants, Institute of Chartered Accountants in England and Wales or Chartered Institute of Management Accountants should be considered a necessity instead of mere steps for higher management.
As most professional accountancy bodies require members to undergo regular training to maintain their memberships, these certified professionals are expected to be fully prepared for IR 4.0 and, by and large, artificial intelligence experts.
Chung adds, “IT knowledge is no longer an option. Lest we aim erroneously, it is not how extensive the IT knowledge is (as this is available in abundance and can be acquired easily), but the ability to understand the evolution of the profession and apply the knowledge appropriately.”
Explaining that accountants must use technology in their favour to elevate companies to new heights, he gives the example of successful tech businesses that used e-platforms to achieve massive scalability and visibility within a short time, despite having owners or founders who were not IT graduates.
“In the same way, accountants should be more strategic, make sense of the vast data available and deliver services based on the twin pillars of speed and quality,” he continues.
Eliminating liabilities
When combining this piece of information with the future route of total automation for jobs that are repetitive, rule-based and involve limited or well-defined physicality, the traditional job scope of accountants is coming to an end.
Employers are bemoaning the skill gaps currently present in the knowledge of digital technologies, forcing companies to spend resources retraining and reskilling their employees.
At the other end of the spectrum, constant news reports highlight the more pressing issue of employers having difficulty finding good graduates who can hit the ground running upon entering the workforce.
These situations highlight the dire need for a new breed of accountants who can provide more all-inclusive corporate reporting, which tells less about the numbers and more about the narrative of a company.
The Malaysian education system, for one, must move towards becoming an ecosystem for continuous upgrading of skills, working together with employers, be they officials from the Government, small business entrepreneurs
or industry experts from professional organisations.
Colleges and universities need to continue reviewing their course offerings so that graduates have an accurate understanding of the evolving industry while being trained to adapt to new technologies and autonomous changes at the workplace.
However, it is not all doom and gloom. Chung points out, “There are now many initiatives being undertaken by various professional organisations and associations to provide education to accountants to increase awareness of the changes taking place.
“There are efforts now by professional bodies, corporates and academia to come together to address the disconnect between what’s being studied at universities and what’s relevant in the business world.”
Given how the financial technology space has demonstrated the willingness of companies to use innovative methods, Chung is optimistic about the future as the accounting profession can not only make positive inroads but ride on the back of this momentum to accelerate the learning and adoption of technologies as the nation moves into a new era of automation.
Increasingly, accountants in business are given the opportunity to be less involved in automated operations and focus more on bigpicture strategies, which gives a clear indication of the type of skills required in the near future. Bryan Chung, FCPA