All professional accountants will be expected to look beyond the numbers. They will also be expected to make professional judgments. Leo Lee, ACCA Deputy President, who is currently in Mauritius, is of view that the profession will continue to be in demand, despite technological disruption. It will be up to accountants to change and add value for their employers and clients. Whoever says that robots will replace accountants has got it wrong
Every year, ACCA registers thousands of new students. Can we say that the profession is more in demand than ever? If yes, why is this so?
The profession is in demand. I think that’s because finance is at the heart of every decision an organization makes, whether it is large or small, in the private or the public sector. The world needs professional accountants more than ever. The accountancy profession is crucial to keeping economies stable – and helping them to develop. Accountancy is vital for economies to grow and prosper – a strong profession makes society fairer and more transparent. In all sectors, professional accountants contribute to the success of their organisations which in turn strengthen their national economies. The role of the professional accountant has never been more exciting. But professional accountants need to change too. To add value for their employers and clients, the professional accountant of the future will need an optimal and changing combination of professional competencies: a collection of technical knowledge, skills and abilities, combined with interpersonal behaviours and qualities. All professional accountants will need to develop and balance the necessary professional quotients to fit their role and stage of career.
How do you view ‘accounting’ and ‘technology’? Are these two compatible?
Yes, absolutely and the profession has been very good at adopting technology to benefit the work they do. Over recent years there has been a lot in the news about robots taking over jobs. The accountancy profession was highlighted as one such area. We believe that automation and technology are having and will have a huge impact on the profession. But this does not mean the end of accounting. It means that certain skill sets are becoming more important and the value of certain skill sets will diminish. The key is to develop and balance the necessary professional quotients to fit their role and stage of career. Accountants have to be aware and understand the application of existing and emerging digital technologies.
We witness technological evolution almost every week or day. How can the profession evolve to keep pace with technology?
That’s very true. When I started in the profession things were very different. Technology is not a threat to our accountants: it’s an opportunity. Technology is the natural next-step in the evolution of finance transformation, but tech does not build relationships or replace systems and staff. The accounting profession is facing a unique opportunity. Digital is enabling the traditional finance function to shift up the value chain, from scorekeeper and caretaker to communicator and business partner. Transactional tasks are being outsourced, and cost effectively so, and opportunities have been freed up for professional accountants to become business partners.
Accountants are at the front line of change, and our profession has a huge role to play in ensuring that we embrace technological changes, and use them to efficiently run finance and businesses.
ACCA research shows that the next generation of accountants are aware and ready. According to our recent Generation Next survey of 18,000 finance professionals under the age of 36, more than half (57%) believe that technology will replace entry level roles in the profession, and the majority (84%) welcome this, saying that technology will enable them to focus on higher value-added activity. The accountants of the future will be highly trained in digital and ethical skillsets, and they will need these to manage the automated entry-level, as they focus on creating broader, more strategic value for businesses.
Should accounting firms limit themselves to the traditional services offered till now?
Those in and around the accountancy profession must constantly scan the horizon to identify, assimilate and then plan for the current and emerging trends and drivers that will have most impact on the business environment, the practice of accountancy and the profession. There is always room for development and I would say this is down to the individual firm. But as a profession, we also have to be mindful of the needs of the clients / customers. Firms need to adapt to grow – if indeed that is what they want to do. Some firms specialize, others are more generalist.
What role can the accounting industry play when businesses are disrupted by technology?
I think accountants can bring a much needed skepticism and trust to business in this increasingly technological world. The profession can also bring stability to disruption – the discipline of financial reporting for instance can bring clarity and certainty. But let’s go back to ethics here. It was recently the anniversary of the start of the global financial crisis, and we published around this time a new global study of accountants and business leaders which found that organizations need to put ethics at the heart of securing public trust in the digital age. Ethics and Trust in a Digital Age raises questions about how prepared businesses are to face new ethical challenges such as ransom ware attacks; crypto-currency transactions; intellectual property disputes and customer privacy. These are all disruptive technologies.
Nearly two thirds of respondents called for strong ethical leadership while a majority (54%) called for guidance on a new code of ethics for the digital age. The report draws upon the views of over 10,000 professional accountants and students, including over 500 C-suite executives. Professional accountants are often on the frontline of facing ethical questions in business. The financial crisis of 2007/08 revealed the extent to which highly complex financial systems make instances of unethical behaviour harder to monitor and report. What’s clear is that the digital age throws up new dilemmas where there are no easy answers. If you’re working in a business considering whether to start accepting bitcoin payments, or implementing cloud-based customer records, these are questions for the here and now. In the digital age there needs to be more, not less, importance placed on the ethical and professional judgement of individuals.
Can we say that the profession and the industry have not been proactive enough so far to up its game?
Like many, I think the global financial crisis was a wake-up call for the profession, bankers, politicians and regulators. Accounting scandals such as Enron have also been a wake-up call too. But I also think the profession has been ahead of the game with issues like environmental reporting and sustainable development goals. I am really proud how the profession has led the way on these issues and played an important role.
For instance, ACCA has recently just published a new report on SDGs (Sustainable Development Goals) in which we say that business and finance have a critical role to play alongside in helping governments deliver the SDGs. Accountants are at the frontline of mobilizing collaborative action. As the global economy increasingly faces new, complex and interconnected challenges, the report notes that finance professionals are well-placed to bring together business, finance and government to deliver on this important commitment.
The SDGs provide a framework for understanding context, risk and opportunities that is in line with the new nature of the global economy, the challenges it faces and the future contours of global growth. Organizations have the opportunity to take the common language of the SDGs and apply them to dealing with a range of interconnected issues, and there is a clear business imperative for contributing to creating inclusive, environmentally-aware and long-lasting prosperity. Because of this, professional accountants are facing growing demands for greater precision in reporting on performance beyond the financial, and to provide strategic advice about the impacts and opportunities that the new operating context horizons engender.
Are there more expectations on behalf of consumers and clients when it comes to the profession/industry?
Yes, there are and rightly so. This is why it is important for the profession / industry to think ahead and pre-empt that demand. Our research Professional accountants – the future: drivers of change illustrates this very clearly. As businesses evolve, so will the expectations of professional accountants. They will need the competencies, skills and outlook to enable them to meet more requests for comprehensive and forward looking information and more frequent ad hoc reporting from ever more stakeholders.
All professional accountants will be expected to look beyond the numbers. They will need to collaborate and partner with people in other parts of the business and outside the business; interpret and explain the numbers; provide insight and information; help organizations to achieve short-term goals and longer-term objectives; think and behave more strategically and become more involved in decision-making than before. Above all, professional accountants will be expected to make professional judgments and, in doing so, to exercise the highest standards of integrity, independence and skepticism.
There have been some recent changes in the ACCA world. For example, modules F5 to F9 are now Computer Based Exams (CBE). What is the rationale behind this?
That’s right. We made these changes in September 2016. We've taken a phased market-by-market approach. We had already introduced CBE for modules F1 to F4 exams.
The rationale behind this was to ensure ACCA students are even more equipped for the workplace. Our curriculum and standards have always been built so as to provide to students not only the best knowledge, but also knowledge that is relevant to the workplace, based on ongoing assessment of the industry.
Keeping up with changes in the workplace is crucial. We want our students to have the right skills. These new exams reflect real-life working practices and include up-to-date tools such as word processing and spreadsheets. Since their introduction, students have been telling us why they prefer to take their exams by this format: keeping answers more presentable; quicker and easier to edit answers; tools to manage their time and progress; no hand writing fatigue; enhanced employability skills. They’ve been a real success. Employers are endorsing the changes and maintain these will ensure work ready professionals.
ACCA has also introduced a new module called ‘Ethics and Professional Skills’. How is this module going to help accountants and aspiring ones?
The new Ethics and Professional Skills Module went live on 31 October 2017. ACCA already had an Ethics module in its curriculum for many years. This new module is an enhancement of the previous one and introduces some new content. The redesigned module focuses on developing vitally important ethical behaviour and judgment to ensure finance professionals are equipped with the skills needed to support exam success at the Strategic Professional level of the ACCA Qualification. This module ensures that ethics still has its place at the heart of our qualification –ACCA was the first to introduce a compulsory ethics module in 2007. The new module revisions ensure all members have the broader ethics, communication, commercial, innovation, analysis and evaluation skills core to membership and essential for shaping the future of business.
Through developing and demonstrating a high standard of ethical and professional behaviours alongside the strategic and technical expertise acquired through passing the ACCA exams, ACCA professional accountants will be able to make an immediate impact in their workplace. The Ethics and Professional Skills module develops skills in leadership, negotiation, conflict management, thinking commercially and professional skepticism development integrated with realistic business situations to improve employability and career success.