ISCA-ICAEW Report: Amid Digitalisation, Integrity, Ethics, and Professionalism Remain the Foundation of Accountancy

-  Technology is reshaping business models, but also presents opportunities for value creation.

- The profession can play a bigger role in global issues like ageing population, global warming and income inequality, say accountancy undergraduates

Singapore, 27 June, 2016 – Changes brought forth by disruptive technologies present a mixed bag of opportunities and threats to the accountancy profession. While the future business landscape will require accountants to learn new skills, the profession’s distinguishing traits of integrity, ethics and professionalism will continue to be its key strengths.

These were some of the views captured in the “Our Future Together” report, jointly published by the national accountancy body, the Institute of Singapore Chartered Accountants (ISCA), and the Institute of Chartered Accountants in England and Wales (ICAEW). The report follows an event where professionals from diverse fields and accountancy undergraduates gathered to discuss the future of accountancy. The report covers issues ranging from new business models arising from disruptive technology to how the role of accountants will change in the future.

“The Committee on the Future Economy, which aims to keep the Singapore economy competitive by identifying potential growth areas, has acknowledged the accountancy sector as playing a vital role in Singapore’s future economic development. ISCA is playing its role to prepare the profession for the future. Continuous learning is necessary as skills that are currently relevant and useful can be quickly made obsolete by newer, emerging technologies.” says Mr Gerard Ee, President of ISCA.

“The accountancy and finance profession will face many challenges and opportunities in the future. They may come from new technologies, new markets and business models, changing regulatory landscapes, society’s shifting expectations or ensuring sustainability and interacting with the natural world. What will never change is the need for trust, integrity and professional judgement. This is why bodies like ICAEW and ISCA work together to support and develop the accountancy profession, both now and going forwards. Whatever changes the future brings, the need for trust in business will always be paramount, and this is what we deliver.”says Mr Andrew Ratcliffe, former President of ICAEW.

A Profession Differentiated Through Trust, Integrity and Ethics

The report pointed out the growing possibility of artificial intelligence (AI) taking over certain accounting functions. In the report, the situation is compared to self-driving cars, which may hit the roads as early as 2020. Unlike human drivers, self-driving cars can work tirelessly, and are likely to be more fuel efficient as compared to their human counterparts. This poses problems for drivers in the transportation and logistics industry as their relevance comes into question.

Likewise for the accountancy profession, AI threatens to replace the role of an auditor. However, the report noted that while AI is increasingly getting more powerful and reliable, the key distinguishing traits of trust, integrity and ethics are what separates man from machine. It was also noted that ultimately, technology is invented by humans, and they will assume the responsibility as designers of automation. The report stated that “in the next five years, more of the auditing work may be performed by AI under the auditor’s oversight. However, compared to audit opinions issued by a robot, clients would have more trust if audit opinions are issued by a human auditor. This is because the issuer has the attributes of integrity and professionalism, which are the defining qualities of accountants.”

Technology Boosts Corporate Capabilities

The report describes technology as a double-edged sword. On one hand, it can lead to the potential loss of current jobs. Concerns were also raised regarding the way technology is reshaping traditional business models.

For example, some cloud-based accounting software can enable businesses to store their financial data online anytime, and allow access to them anywhere from any device with an internet connection. They are also able to automatically record transactions through a simple snap of an expense receipt. The accountant will only need to verify the information and confirm the entry, making some accounting functions like book-keeping redundant.

On the other hand, the same technology can also present opportunities for accountants to create value. For instance, accountants can use cloud-based accounting software to reduce the time needed for manual entries, freeing up their time for more important areas, such as risk management and strategic planning.

The report states that “armed with advanced technological tools and a keen understanding of their business, accountants are able to perform higher-value work such as data analysis and business strategy. This will further strengthen the accountant’s role as a strategic business advisor in their organisation. Amidst these changes in job roles, accountants will have to acquire new skills and competencies to stay relevant.”

New Strategy Needed for Talent Attraction and Retention

The report also reflects the need for the accountancy profession to overhaul its image in order to attract the millennial generation.

The report states that while accountancy undergraduates agreed that “an accountancy degree was a well respected and versatile one” many did not want to join accountancy firms upon graduation, and would rather use their degree to enter other fields. This highlights the need to find a way to improve the image of the profession in order to attract and retain talents.

The report notes that accountancy undergraduates saw potential for accountants to play a greater role in global issues by contributing to discussions on areas like ageing population, global warming and income inequality. This ties in with the profession’s role to act in the public interest.

The report suggests that the current accountancy degree curriculum will need to be updated to prepare future accountant for the future workplace. Subjects like Psychology, Information Technology and Human Resource should be included in the accountancy degree education. On top of that, transferable skills like leadership skills and critical thinking are seen as a priority.

The report highlights the need for the accountancy profession to change. An analogy used by the accountancy undergraduates was that accountancy as it is practised now is like the “Ultraman” television series. Each episode of Ultraman is repetitive and predictable, much like how an average day in the life of an accountant is perceived to be. However, the accountant of the future has to be more like “Spiderman”. Spiderman was a metaphor used to describe future accountants as nimble and flexible, being able to adapt to complex situations. The report also states that “accountants are also expected to become more dynamic, embrace job mobility and leverage on technology such as Big Data to enhance decision making”.

The “Our Future Together” report is based on comments from group discussions among more than 40 business professionals from diverse fields and expertise such as accountancy, legal, information technology, human resource and academia. The report also included the comments of accountancy undergraduates from Nanyang Technological University, National University of Singapore, SIM University, Singapore Institute of Technology and Singapore Management University

The full report can be found here. Quotes on the Future of Accountancy by various participants can be found in the Annex.

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For media queries, please contact:

ISCA

Betsy Tan, Senior Communications Manager

Tel: 6597 5608 / 9641 6920 Email: betsy.tan@isca.org.sg

Shaun Tay, Communications Executive

Tel: 6597 5613 / 9147 7633 Email: shaun.tay@isca.org.sg

ICAEW

Rachel Lok / Archanaa Raja

Tel: 6220 2623 Email: icaew@ketchum.com

About the Institute of Singapore Chartered Accountants

The Institute of Singapore Chartered Accountants (ISCA) is the national accountancy body of Singapore. ISCA’s vision is to be a globally recognised professional accountancy body, bringing value to our members, the profession and wider community. There are over 30,000 ISCA members making their stride in businesses across industries in Singapore and around the world. 

Established in 1963, ISCA is an advocate of the interests of the profession. Possessing a Global Mindset, with Asian Insights, ISCA leverages its regional expertise, knowledge, and networks with diverse stakeholders to contribute towards Singapore’s transformation into a global accountancy hub. 

ISCA is the Administrator of the Singapore QP and the Designated Entity to confer the Chartered Accountant of Singapore - CA (Singapore) - designation. 

ISCA is an Associate of Chartered Accountants Worldwide – supporting, developing and promoting over 325,000 Chartered Accountants in more than 180 countries around the world.  

For more information, visit www.isca.org.sg.

About the Institute of Chartered Accountants in England and Wales

1. ICAEW is a world leading professional membership organisation that promotes, develops and supports over 145,000 members in more than 160 countries. We provide qualifications and professional development, share our knowledge, insight and technical expertise, and protect the quality and integrity of the accountancy and finance profession.

As leaders in accountancy, finance and business our members have the knowledge, skills and commitment to maintain the highest professional standards and integrity. Together we contribute to the success of individuals, organisations, communities and economies around the world.

Because of us, people can do business with confidence.

1. ICAEW is a founder member of Chartered Accountants Worldwide and the Global Accounting Alliance.