We must adapt with Technology, says ACCA Business Development Manager Kada Phiri, FCCA.
The accounting profession is rapidly moving toward automation. Where does this leave us? It’s time to reskill and evolve with technology. “We are living in a digital age which provides unique opportunities but also places new demands on the accountancy profession,” says Kada Phiri, FCCA, Business Development Manager at the Association of Certified Chartered Accountants (ACCA).
The global accounting body began investigating the impact of emerging technology in 2016. Based on the results of that research titled ‘Drivers of change and future skills Professional accountants – the future’, it became clear, the ACCA qualification would need an overhaul to respond to the skills needed in this digital world changing at a rapid pace.
The birth of Blockchain, distributed ledger technologies and decentralised applications promised to move trust away from people and institutions and place it in the technology. Blockchain is essentially an immutable record of transactions. It works like a traditional ledger, recording the transactions of just about anything, movement of money, goods, secure data, a grocery store purchase, or the assignment of a government-issued identity number.
The timing of ACCA’s research came a year before the accounting profession, particularly external auditors, would be dogged by scandal. German Pprosecutors announced they were investigating massive accounting fraud at South African Retail holding company, Steinhoff. Shortly after that news broke in December 2017, Steinhoff’s shares dropped by 60-percent, resulting in losses exceeding R200 billion.
“So globally, the users of financial statements are questioning the role of an external auditor, and whether the information they are being presented is true, fair and reliable. The Steinhoff collapse came because alleged unethical business practice practices which affected the financial statements for previous financial years to be restated,” says Kada.
Most recently, the collapse of British Travel Group, Thomas Cook was blamed on a ‘failure in corporate finance’ rather than travel.
With these accounting discrepancies coming from historically respected and trusted independent companies, DLT and blockchain may become a more attractive, cost-efficient alternative in the near future.
ACCA’s extensive research into emerging technologies found that accounting professionals need to have a full understanding of the impact of digitization on their jobs. ACCA found that while the precise changes depend on the professional’s specialism, the need to exercise professional judgement and demonstrate the highest standards of ethics, independence and scepticism remain constant.
“Following that research, we relaunched the ACCA Qualification. In fact, last year when we introduced the Strategic Business Leader course, we included a whole syllabus area on technology, which includes cloud and mobile technology, big data and data analytics.”
With 18-years under his belt, Kada recalls his early days as a professional accountant. “Back in 2000, it was transferring everything to a laptop or computer, using spreadsheets, and at that time it was a new way of working.”
In his book ‘Real-Time Big Data Analytics: Emerging Architecture’, Mike Barlow suggests that the information age is coming to a close and we’re moving into a new technical era. The technical era is the era of automation, big data and artificial intelligence. As such these advancements have great implications for business and society, and the technology is advancing faster than the abilities of the people trying to use it.
ACCA’s research ‘Emotional quotient in a digital age’, also confirmed as much. The report also studied the effect of the digital revolution on the emotional quotient (EQ) which was the subject of the study. Emotional intelligence refers to ‘the ability to identify one’s own emotions and those of others, and are able to harness and apply them to tasks, and to regulate and manage them.’
Willingness to learn, grow and adapt to the rapid developments lies entirely with the EQ. Kada says, “In the context of accountancy, much has been said about the disruptive power of technology and its possible impact on jobs. In EQ, individuals have a resource that is integral to who they are as human beings, and that is inherently difficult for machines to replicate. “
ACCA believes this potential is often not recognised. So considering return on time and effort spent, there is a strong case for those in the accountancy profession to build their EQ competencies as part of strengthening their competitive advantage.
ACCA has developed a unique diagnostic tool for individuals to self-assess their level of EQ against a global benchmark specific to the accountancy profession. The tool provides practical guidance on how to improve effectiveness in the EQ competency.
This diagnostic tool takes around 15 minutes to complete and performs best on a personal computer (PC)