IASeminars faculty member, Jerad Dias, explores the importance of accountants adapting to change.
A few days ago I came across a very interesting interview with Jane McGonigal, the contents of which I’d like to share.
McGonigal is a game designer. She builds simulations that help players imagine the unimaginable. In 2010, she invited around 20,000 people to immerse themselves in a future world besieged by a global pandemic; just some of the questions she asked were:
“How would you change your habits?”
“What social interactions would you avoid?”
“Could you work from home?”
Ten years on of course, we saw the real and genuine responses to what, a decade ago, may have seemed such an unlikely eventuality. Prediction, followed by reality.
The interview made me wonder about the continuing relevance of our own ‘world’, our own line-of-business. With the technological advances that continue to be made and that ‘disrupt’ traditional business models, my thoughts turned to how our very own accountancy profession stands-up to the complexities and uncertainties of a fast-changing world. In short, posed in a Jane McGonigal way, here’s my question.
“Could the traditional accountant disappear?”
Machine learning, artificial intelligence, blockchain, fintech, and robotic process automation are a few or the “buzz words” we hear most when the discussion turns to the accountancy profession and its potential demise. And now, on a more positive note we can add-in “the circular economy”, climate change and ESG as areas the profession will support and lead.
Nevertheless, to begin with let’s concern ourselves with the negative side of the ledger, for it does raise serious concerns for ‘our’ survival. Indeed, such is the concern the International Federation of Accountants (IFAC) has initiated a discussion forum called “The Future ready Accountant”, suggesting that we do in fact need to be ready (to change, to adapt, to be skilled) to survive. And IFAC is not on its own here. Many other global accounting institutions have begun to talk (and / or to introduce initiatives) to raise awareness about the need for ‘us’ to be better aligned or to adapt to what is potentially coming down the road.
But, hold on just a minute...in some respects, the accountant has always been ready for change, or has quickly adapted to it, have they not? When the computer revolution first arrived the manual ledgers disappeared, and accountants quickly learnt how to work with new tech. It all seems such a long-time ago! Most accountants are now, surely, familiar with software packages, and be comfortable with manipulating and analysing data within an Excel spreadsheet, at the very least. At the larger corporate level, it’s a near-certainty that one of the big ERP accounting systems will dominate the information processing, supported by the financial reporting teams.
So then, has the accountant disappeared with the massive automation that has occurred over the years? “No” of course is the very clear and proven answer.
How have we managed to come this far? Maybe it’s because of the distinction we need to make (and that we have made) between our role and that of the ‘pure’ information processor. Ok, whilst we might be involved in processing to some degree, our skill, our ‘value added’, has always been more centred on the interpretation of that information to contribute to the decision-making process.
Going forward then, for our continuing development and survival, maybe it’s about shifting our mind-set to be more and more focused on what really matters. Maybe it’s a simple shift of paying less attention to the pure record keeping (let’s leave that to the automatons, to the Blockchain) and more (and more) time focused on the information analysis, the critical thinking, awareness of business dynamics and applying professional judgement.
Surely, whatever happens around technology - or any other disruption that comes along - those qualitative aspects cannot be replaced, and our professional human intervention is necessary.
Consider this example, relevant to our post-pandemic environment - the impairment of assets. ‘The machine’ will surely produce value-in-use calculations fast, with much data and different scenarios, but who (or what) better understands market dynamics and future trends to build up cash those flows? Who can apply the critical thinking and judgement? Is it the machine or ‘me’? – by which I mean ‘us’, by which I mean our profession. Let’s not forget, this is not about producing massive amounts of information and analysis per se, but it is about analysis, interpretation and its place on the decision-making table. As I see it AI or Machine Learning, might well produce some analysis from all those scenarios and all that mathematical information, but where does the essential judgmental element come from? It’s this judgement that will help move the decision into action. Whilst AI can do some of the work, can the knowledge and experience of the accountant really be replaced? I think not.
So, coming back to where I started, I leave you with some questions that Jane McGonigal may have asked if her audience was the accountancy profession.
“What knowledge do you need more of for today and tomorrow’s decision-making environment?”
“How can you best access that knowledge?”
“To what degree will that knowledge need to be refreshed and updated in the coming years?”
I look forward to analysing your answers to these – but let’s not leave it a decade – that would be unimaginable!
About the Author
Jerad is a partner in the Audit and Assurance division at BDO Sri Lanka and Maldives. He also serves as the Head of Training at BDO. He is an Associate Member of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and holding a B.Com (Special) degree from the University of Colombo. He has more than 17 years’ experience mainly in audit, consulting and training functions. Prior to joining BDO, he worked at Ernst & Young (EY), Sri Lanka for nearly 10 years, including their offices located in Saudi Arabia, Singapore and Guam. After leaving EY, he worked in the BDO, Fiji office for two years as an Associate Director prior to joining BDO Sri Lanka in 2017.He was promoted as a Partner at BDO Sri Lanka in June 2020. He is specialized in general financial accounting, audit and in providing services related to IFRS training & consulting. His local and international experience includes auditing clients in different industries including, banking and finance, leisure, telecommunication, manufacturing, transportation, food & beverage, retail and services. He has conducted IFRS/Audit trainings in Fiji, Bhutan and in the Maldives. He is also serving as a facilitator at CA Sri Lanka and local universities in conducting various training sessions. He is currently researching and studying on Sustainability reporting/ESG and Impact investing. At CA Sri Lanka, he has served as a member of the Student Training and Skills Development Committee and the National Conference Technical Committee (2017-2019). He has also served as a member in the CAPA/National Conference Technical Committee, Audit Faculty, Financial Reporting Standards Implementation and Interpretation Committee and the SMP Task Force of CA Sri Lanka (2020-2021). He was the Manager in Charge of the SMP Audit Toolkit development project (2012) and a member of the SMP Audit Software development project (2019) and the Practical Training Guide development project (2019).