It’s the end of accountants as we know them, says Eric Tong, and the start of “accounting plus.” The new Institute President tells Jemelyn Yadao about his pursuit to help CPAs thrive through and beyond the onslaught of disruptive changes, and the Institute’s mission to help members get more out of their membership through enhanced communication and transparency.
Words such as artificial intelligence (AI), robotics, machine learning and blockchain dominated conversations in the accounting profession last year, forcing CPAs to question or look into their future-readiness. As the Institute President this year, Eric Tong is determined to add a new talking point to the mix – he calls it “accounting plus.”
“It’s time to see ourselves not as just accountants, but as ‘accountants plus’,” says Tong, Audit and Assurance Partner at Deloitte China’s Global Financial Services Industry Group. “Accounting knowledge gives CPAs a good foundation to move on to other areas and add value to business. It’s not just ‘accounting plus tax’ or ‘accounting plus information technology’ – there are so many options.”
To him, there’s no denying that accountants play a role outside financial reporting. This year, Tong will be working alongside the Institute’s Branding and Communication Advisory Panel to get this message out to members and the Institute’s other key stakeholders. The panel has hired third-party consultants to help ensure the Institute effectively connects with members through a well-informed approach. “The branding and communication project is going to be a big one as we need to build on the Institute’s brand and promote just how diverse the profession is,” says Tong. “This doesn’t mean avoiding issues in the profession, such as long working hours, but there are great things about accounting that need to be highlighted including the vast interests and skills of our members.”
Equally important to the branding is the communication aspect of the project, particularly amid the Institute hosting an Extraordinary General Meeting in March which considers resolutions raised by members. Tong highlights that in order to avoid similar challenges happening in the future, members simply need to be told more through improved engagement. “When I was appointed President, I said that the Institute needs to do better explaining the different roles it undertakes to members. The first one being that we provide member services. But at the same time, the Institute is a regulator and a registrar,” he says. “Because of this multifaceted role we play, members often do not know what we are fully doing. I want to give more transparency to how the Council works, and during my term this is something I’m going to look into.”
With the right technological tools, the Institute would be able to communicate with each member in a more relevant way, says Tong, which means sharing updates on topics that matter to them, and leaving out everything else. “Professional accountants in business’ interests are vast. They’re usually into management, treasury, risk management and more, while practising accountants may want to know more about financial reporting standards, auditing standards and ethics. We want to do more to cater to this need for differentiation.
“We hear comments from members that they wish the Institute could ‘do more CPDs on X.’ But in fact, we’re doing a lot of different courses but this information is buried somewhere in their emails. This year, we need to be more communicative when it comes to letting members know about our services and courses.”
Another area that needs clarity is the Institute’s standard setting work and its influence in the international arena. “Some members think that because we follow international standards, we don’t do much. When it comes to the implementation stage, yes there’s not much we need to do. The real contribution is at the discussion and drafting stage, where the Institute is recognized as a pre-eminent body and invited to national standard-setters meetings and international forums to share our views before standards are rolled out. That’s where we spend time,” Tong explains. “So it’s not that we put everything on a plate and hand it out. But again, members do not know so we need to communicate with them more.”
Tong will also be heavily involved in helping the Institute with its digital strategic plan with the aim of improv- ing its technological backend to better target each member’s specific needs when, for example, they browse the Institute’s website.
“A member may be very interested in data analytics and so we would know when they search it, and be able to prompt them about a new article or an upcoming event relating to data analytics, instead of providing a shop- ping list of topics. We’re looking at how technology can help enable this,” he explains. “The Institute wants to enhance the experience for mem- bers, knowing our members are very busy, knowing our members may not always be in Hong Kong. Even if they are in Hong Kong they are always on the go and rely on their smartphone for updates.”
This project is part of a broader aim of ensuring the Institute stays relevant in this time of constant change. Tong highlighted the need for the Institute to increasingly digitize its provision of thought leadership. “We have more than 42,000 members with a high number of them being under 40, and they expect to be communicated with through digital means. Last year, we released a smartphone- supportive version of A Plus. But is that enough? We want to do more.”
Tong adds that through digitization, the Institute also wants to offer more online-based courses to members as a flexible alternative to traditional face-to-face learning. “It takes some time for some members to get to our office in Wanchai. Building on this digital platform will allow us to do more e-learning,” he says.
This focus on improving the Institute’s IT capability is in line with Seventh Long Range Plan, which will be finalized this year. “The Seventh Long Range Plan, while it’s still being developed, will consider the impact of technological changes on the profession, how we should commu- nicate more with members, as well as strengthening the profession’s talent pool,” he says.
This year, the Hong Kong profession will be affected by certain areas, including audit regulatory reform. Tong notes that under his leadership, the Institute will continue to be in discussion with the government and other stakeholders to ensure implementation goes smoothly. “We want to make sure that whatever the government proposes addresses our members’ concerns,” he says. “While we don’t 100 percent need to follow what other countries are doing, it’s the Institute’s belief that our current systems have overall been working fine as we have incorporated independent elements in our operations including Council. However, rightly or wrongly someone will consider the Institute a members’ organization.
“To maintain Hong Kong’s posi- tion as an international financial centre, we will need to transfer the listed companies and our full audit regulatory powers to Hong Kong’s Financial Reporting Council.”
New anti-money laundering (AML) regulations will also impact the industry this year. With the Anti- Money Laundering and Counter- Terrorist Financing (Financial Institutions) (Amendment) Bill 2017 expected to be passed by the Legislative Council soon, accountants work- ing in professional firms, lawyers and trust or company service providers will need to conduct customer due diligence and record keeping while carrying out particular kinds of transactions for clients. Similar to regulatory reform, says Tong, it is important for Hong Kong to be in line with international practices in relation to AML.
“AML is something that has raised a lot of voices in the profession. Having said that, I believe the government is trying to be as accommodating as possible with the Hong Kong situation while meeting the international requirement. The international approach is not a one-size-fits-all so there’s a need to meet local concerns.
“The international’s perception is important. We believe Hong Kong is not a tax haven but some people might because of our low tax regime, so there’s a lot of things that need to be considered, such as more stringent Know Your Customer and border procedures,” he says.
More to learn
In today’s ever competitive business environment, thriving as a small- and medium-sized practice or a large professional consulting firm is tough, says Tong. “Macro-wise, the business environment is changing, the world is bigger and it’s getting harder to get that differentiation. I think in the profession everyone will be trying to go that extra mile. That’s why we need a new breed of accountants who think outside the box and are more forward-looking. They will have the first-mover advantage.”
The new branding can help the profession attract and retain the best talent, including those with different educational backgrounds. The challenge is getting students to acknowledge the “accounting plus” message. “To promote this message, we start at the Qualification Programme (QP) level then move onto the profession. That’s why the new QP comes at the right time because it emphasizes the need for a mix of different skills, including the ability to look at the numbers and understand the business dynamics,” he says. “We need people with analytical skills, people with business insights, people who embrace or understand innovations.”
Tong hopes more young members will see the potential of new technologies to change the profession for the better. “One of the concerns you hear from junior associates is that they are doing mundane work such as sending audit confirmation letters. But in fact, there are companies offering automated solutions where you can audit in a more automated fashion, make the audit process more efficient, faster, less labour intensive,” says Tong. “With AI, the mundane work, especially during busy season, is actually taken away. Then you have more time to learn more about the business. We need to raise young people’s awareness about this.”
Learning more about business was what inspired Tong to become an accountant in the first place. And even after more than 30 years in the profession, he is still learning in this age of automation, he says. “It is one of the few professions where you get paid to learn the business. I like to see how the business evolves. And as an accountant, you are part of that process and you make a real contribution when you help companies get listed.
“The more I progressed in my career, the more I realized it’s not about the numbers. It’s about getting the trust of the business people and sharing insight with them. I never thought when I first joined this profession that I could be in this kind of situation.”
While it’s common for professional accountants in practice to make the move from practice to the commercial world, the thought of doing so never crossed his mind. “I like meeting and talking to people, and in practice, every year there’s something different going on. I don’t work in the same environment all the time.”
Indeed, this unwillingness to settle for monotony reflects his interests outside of work: music in all its genres. “I like hip hop, classical, rap, pop music such as Ed Sheeran and Bruno Mars, and local artists like Eason Chan (陳 奕迅) and Softhard (軟硬天師). I’ve seen big rock bands like Led Zeppelin and Guns N’ Roses in concert,” he says. He recalls an unforgettable night spent at a Metallica concert in the 1990s when he was a junior manager in London.
“Everyone there were head-banging guys wearing leather and with very long hair. I was the only extraordinary guy in a suit and short hair,” laughs Tong, accountant plus heavy metal fan.
This article was originally published in A Plus. You can read the digital version here.