In an environment where businesses are evolving constantly, what does the future hold for accountancy professionals? Two ISCA Council members offer their insights on how the profession can evolve to take the lead.
Even as the world grows bigger with new inventions and business models being created at breakneck speed, it also grows smaller in that the lines between industries become more indistinct.
Accountancy is one of the oldest professions in the world and an essential part of every organisation and business that turns in a profit or makes a loss. But with the advancement of technology, the traditional roles of the accountant and auditor are being challenged in different ways. New developments in business, from cryptocurrency to environmental, social and governance (ESG) considerations, require new parameters in accounting.
It is apparent to leaders in the profession that accountancy needs to evolve quickly – to not only meet the new needs that have arisen in this knowledge economy but also to find and stake its place in the businesses of the future. Two ISCA Council members – Lim Yeong Seng, FCA (Singapore), Managing Partner, KLP LLP, and Christopher Wong, FCA (Singapore), Head and Partner, Assurance, Ernst & Young LLP – share their perspectives about the future of the profession.
TAKEAWAYS
- With digitalisation and the emergence of new industries, opportunities abound for accountancy professionals.
- The future of the accountancy profession could lie in specialisation, where there are specialists who only focus on certain areas of work; people are then able to refer specific jobs to those trained in that particular area.
- Creative/Innovative solutions are needed to solve business problems, and accountants are best placed to step up as advisors to the top management.
Creating A Culture Of Financial Specialists
Lim Yeong Seng, FCA (Singapore), Managing Partner, KLP LLP
To Lim Yeong Seng, the future of the accountancy profession lies in specialisation, much in the same fashion as in medicine. “In the medical field, if you want to be a specialist, you start off as a generalist, then take up a specialisation, and work your way up from there,” he elaborates. “In a hospital, there are specialists for every part of the body, and the GPs know who to refer patients to. I guess accountancy has not evolved to the level where we have specialists who practise only their specialisation working with the rest.”
Mr Lim, a member of ISCA’s Public Accounting Practice Committee, has more than 35 years of experience in audit, corporate recovery, tax, secretarial, finance and administration. He acknowledges that this “evolution” in the accountancy profession is beginning to take form, but it is not yet commonplace nor universally accepted. “Specialists are not finding enough work in that role – or there could be some work, but not enough (to make a living),” he adds. He believes that the accountancy or finance profession should move into an arena where there are specialists who only focus on certain areas of work, and people are able to then refer specific jobs to those trained in that particular area.
Opportunities abound in specialisation. “This is already happening, albeit slowly, and it’s all over the place,” Mr Lim opines. “We are seeing fintech specialists and, now that ESG is a big thing, should there be ESG specialists?” he asks. “Nobody has really thought it through – what is our role? How do you specialise in some of these areas? How can you get people to refer work to you?”
BRACING FOR CHANGE
The role of the accountant has not changed, Mr Lim feels. Audit and accounting remain the backbone of what an accountancy professional does. What have changed are the business environment, and the increased responsibility that falls on the role. Change comes about with every downturn, he notes, and recessions often give rise to a re-evaluation of standards. “Some businesses will collapse, and people will then look back and say, ‘Hey, you know, these are the things that need to be changed’,” he shares. “So that has made accounting more and more ‘onerous’ in a sense.”
One of the things that Mr Lim feels has not really caught up with the rapid changes in business is the definition of accounting – and who we want to consider as an accountant. “Nowadays, if you look at finance, it is a very wide scope,” he emphasises. “For example, you have transfer pricing, audit of cryptocurrencies, the move to online transactions, so the accountancy profession needs to evolve faster to meet the needs of such emerging areas. Let’s not forget that our profession started because somebody needed to account for profit and loss.”
Mr Lim points out that it is those trained in accounting and audit who are the de facto financial experts in business. However, what is currently happening in the business world does not reflect this. “There are companies that require someone with a keen eye to see and make sense of their businesses, and take on those necessary and vital roles,” Mr Lim elaborates. “However, the accountancy profession has not captured these different roles and is not able to say, ‘Hey, you know, these roles should be considered under our purview’.” In his view, “the accountant should be so equipped that he is the financial advisor to the CEO”.
As the accountancy profession has not changed quickly enough to capture the new, existing opportunities, less qualified individuals are assuming the main finance roles in companies and, predictably, may overlook or fail to spot issues that will require reparation down the road.
ACCOUNTANTS AS PROBLEM SOLVERS
It is not just the changes in the business world that will impact the profession, however. Mr Lim, for one, is convinced that automation is here to stay, and that it will spell the takeover of some accounting functions. At present, considerations are being made for how to put in controls, via technology, to accomplish tasks across different businesses that are using different software. “I don’t think anything will stop the progress of automation,” he states. Such change – technology, plus the evolution of business – may be seen as a threat, or an opportunity. “The opportunities in the next 10, 20 years lie in the fact that the trends are moving,” says Mr Lim. “There will always be new problems, and accountants need to be problem solvers.” He cites the example of ASEAN, which is poised to become the next big global player, after the US and China. “The questions to ask would be, ‘How can ASEAN be a big player? What are the different regulations in the ASEAN region? How does transfer pricing play a part? How do we perform audit in such a way that we can audit the different regions easily?’”
Thus, it is key to understand that the way things are done will change. “New people coming into our profession will need to know there is basic training. But we have not developed that basic training; we have always moved it towards accounting and audit, but such training needs to include other things,” he says. “We’re not trying to train just accountants – we are trying to train financial experts. What are the modules we can prepare so that each of these individuals can pursue his/her area of interest?”
At the end of the day, Mr Lim is clear that all financial aspects of a business should come under the purview of the Chartered Accountant. It then comes down to the profession as a whole, and a body like ISCA, to work out what roles people play in finance, and the ways to ensure that these people are qualified. “Qualification is key,” he emphasises. “When I entered the Investigation and Disciplinary Panel, I realised that there were no criteria for someone to be a CFO of certain listed companies; he could be a trained engineer and be the CFO. Some are unqualified accountants, or they have taken their eye off the actual work, creating huge messes that will ultimately need more work to rectify.” He adds that sometimes, such errors are not immediately apparent. “It’s only one or two years later that the effects of the error will arise and, to go back and rectify it, especially if things are voluminous, can be very taxing.”
What the industry needs to do is to train accountants in such a way that they are recognised and valued for their skill sets. “We need to make it clear that the role of the CFO needs to be held by a trained accountant. If not, things will go bad.”
MAKING ACCOUNTANCY GREAT AGAIN
Mr Lim frankly expresses that he feels the profession is not attractive to young people today. “I say it is onerous because increasingly, the accountant and auditor are bearing more responsibility,” he reflects. “Why study something so that I can get a job that will cause me to be blamed a lot of the time?” It is for this reason that there is a need to widen the scope of the accountancy profession – and make that the future of accountancy. While audit is an important function, Mr Lim believes there are other roles for accountants.
His proposed solution is specialisation. Young accountants must expand their vision of what they are able to achieve. “Train to achieve a basic level of accounting competence, then specialise in different roles. Ultimately, what we want is to be able to support the CEO. This means the accountant must know everything about the business, whether it’s human resource or IT,” he says. “When I was a CFO, I implemented the whole IT system and when something went wrong, we were the ones who stepped in and solved the problem.”
“We are the financial gateway to business. Every growing business needs a strong finance person. If you’re a unicorn and you don’t have a good finance person on your team, you will fumble somewhere down the road. So, in training, we need to take the lead in matters of finance and be able to say, ‘Hey, that is our value’.”
Accountancy professionals are already positioned for greatness, says Mr Lim. “We are a profession that, by the time we finish three years of school, would have seen a huge variety of companies, through internships and industry attachment programmes. Take me for example. I’ve visited banks; I’ve seen how oxygen is made; I’ve seen chicken farms, fish farms. The kind of experience you get as an accountant is fantastic. All businesses need accountancy professionals. We are the most flexible profession, with a basic knowledge that allows us to adapt to any business.”
Through A Different Lens
Christopher Wong, FCA (Singapore), Head and Partner, Assurance, Ernst & Young LLP
Innovative solution finders. Strategic drivers of growth. Progressive navigators of emerging fields. These are terms that Christopher Wong hopes people will readily associate with members of the accountancy profession today. “In the past decade, the diversification of work for those within the profession has greatly changed the public’s perception of it,” says the Head of Assurance and Audit Partner, Ernst & Young LLP.
He does not paint a completely rosy picture though. “Corporate and accounting scandals have tainted the stature of the profession somewhat,” he shares, listing the factors that might deter younger talent from joining the industry. “Furthermore, the long, demanding hours have made the work less attractive to a younger generation that places a lot more emphasis on work-life balance.” However, he believes that accountancy truly is a profession that offers unparalleled breadth of opportunities. “The work experiences one will be presented with as an accountancy graduate provide the fastest route to learning about any business from the inside out. With this knowledge, one can make the informed decisions that drive a business,” says Mr Wong, who has witnessed the evolution of the profession over the decades. “Given that CFOs or even CEOs today are expected to have multidisciplinary competencies, those with an accounting background – and a bird’s eye view of business processes – are well placed to lead businesses of the future,” he emphasises. “We could certainly do more to paint that positive, exciting image of the accountancy profession.”
AMPLE OPPORTUNITIES FOR THE AMBITIOUS
Mr Wong sees an exciting future for young accountants as leaders who will define emerging industries. “Sustainability is an area that every business needs to emphasise today. Given that it is still quite a new area of reporting, accountants have the opportunity to define how to extract and shape the data and reporting standards and, in turn, what sustainable practices are,” he opines. Similarly, accountants can play an instrumental role in shaping other new industries, such as blockchain and digital assets in the crypto world. “This is an industry at its infancy, with a lot of controversy surrounding it. Despite that, I would say to any accountant who wishes to enter this field, ‘Go for it!’,” he says. In his view, ethics is the fundamental fabric of the profession and, as professionals are guided by ethics and objectivity, accountants can certainly play that guiding role as the crypto industry continues to evolve.
Beyond shaping new areas in business, Mr Wong also sees accountants playing a pivotal role in the transformation of existing businesses. “Analytics and digitalisation have been huge areas of play in the last five to 10 years,” he explains. “Thus, accountants have the ability to help with the financial transformation of companies, taking them from outdated processes to modern, agile systems, be it in terms of data storage or introducing automation and robotics within the operation.”
The adoption of technology within the accountancy profession itself has also brought about major changes to the role accountants play, opening up new pathways for them. “There has always been an underlying concern about technology taking jobs away,” he concedes. “However, the reality is that technology takes the mundane tasks away, leaving the professional with more time to pick up and hone higher-level skills.” Mr Wong, who sits on the ISCA Council and is also an Accounting Advisory board member of the National University of Singapore Business School, also addresses the seemingly relentless onslaught of artificial intelligence (AI). “AI might be advancing, but there are human qualities that cannot be replicated by a machine, such as passion, ambition, empathy, camaraderie …,” he says, highlighting the finer, nuanced facets of accounting work that go beyond mere robotic processes.
“The younger generation embraces technology more readily. However, the benefits are to be reaped by all within the profession, regardless of the career stage they might be in,” says Mr Wong. He is of the view that with technology, the profession can go deeper, do more, and at a faster pace. This in turn allows accountants to help organisations cope with the rapid pace of change in the world today. Thus, he sees accountancy evolving into a primary driver of business development. “You can have grand plans, but nothing will happen without financing and projections, and accounting knowledge is key. The accountant’s role actually takes centre stage in the business world today.”
INNOVATING AROUND CORE PRINCIPLES
Needless to say, the diverse opportunities Mr Wong outlines call for diverse skill sets. To this end, he observes that tertiary institutions are going beyond equipping students with core knowledge and competencies. “While foundational knowledge is taught, other learning opportunities are also presented through project work, presentations and internships,” he notes. “Being able to persuade and convince is a critical skill for young accountants today; you can have all the knowledge in the world, but you would still lose out if you cannot present your point of view effectively.” He also emphasises a key mindset change that those in the accountancy profession should embrace, “Accountants need to be able to innovate. ‘Creative accounting’ is a bad term, but ‘creativity’ is not a bad word,” he stresses. “I see creativity and innovation as having the presence of mind to think through problems to find solutions.” Of course, accountants would need to discuss these solutions properly and examine them robustly before implementation, and brace themselves for the possibility of making mistakes. “But there shouldn’t be a climate of fear that kills innovation within the profession.”
Think out of the box, but always be guided by rules – this is Mr Wong’s advice to young accountants. “The rules in accounting are very principles-based and they are not as prescriptive as most people think,” he highlights. “There are few things that are not subjective, and if you think widely and broadly enough, there is scope within the rules for solutions.”
That said, Mr Wong stresses that ethics underscores the work of the profession. “I am not suggesting that we bend the rules or dance around them. Accountancy is a principles-based profession. As long as you follow the basic tenet of doing the right thing, you will be aligned with the law and public interest. One must never lose sight of the underlying values and ethics of the profession, whether you are an auditor or accountant. Without that baseline principle, anybody can do our job!”
Beyond balancing the books, accountancy professionals indeed have more to balance in their work, but Mr Wong urges the younger generation to look past the hurdles. “It is a demanding profession, but also a very rewarding one.” Drawing from his own experience, he shares, “Every single day of work has been eventful for me since I started as a young auditor, and I enjoy this greatly. I get to meet a wide spectrum of people, from the nice to the difficult and, the more difficult they are, the more they help to shape my character.”
“If you view learning experiences positively and have the resilience, you will appreciate that these are experiences that make you a better professional, then this is a job that will be rewarding on many levels.” And, despite the dark clouds of recession and global instability, Mr Wong remains excited for mid-career professionals and young entrants. “The profession has never been so exciting. It would be a loss (to individuals) to not take up the challenge to shape what the future accountant will be,” he enthuses. “It’s definitely what I would do if I were a 20-year-old now!”
Author’s name
Nil
Source
https://journal.isca.org.sg/2022/12/01/taking-on-tomorrows-challenges/pugpig_index.html