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The four drivers of change

Since the turn of this century, the accountancy profession has undergone exponential development and evolution.

Not so long ago the stereotypical view (rightly or wrongly) of an accountant was of a dull, old, grey-haired man (not a typo!) crunching the numbers in a back office. Expectations were low; these accountants were not ‘people people’. They probably didn’t interact with customers. They had limited contact with other departments within organisations. Decision-making and the setting of the strategy was not the role of the accountant but of the sales and commercial team, which was the driving force in most organisations.

Fast-forward to 2019, and there are some interesting facts concerning Chartered Accountants. Consider this, from the Institute’s 2018 Annual Report:

  • Eight of the top 10 Irish companies have a Chartered Accountant as either CEO or Chief Financial Officer;
  • 41% of the roughly 27,300 members of Chartered Accountants Ireland as at 31 December 2018 were aged 37 or under;
  • 64% of the membership work in business with further analysis of the membership suggesting that roughly 700 are CEOs, 900 are business owners, and 2,800 are directors; and
  • At 31 December 2018, women constituted 41.5% of the membership.

Chartered Accountants are business leaders. Accountancy practices are recording unprecedented growth rates in both fees and employee numbers. So, what has happened in the last 20 years that revolutionised our profession and how we are perceived?

A few key drivers have changed the skill set of the successful accountant:

  • The impact of technology on record-keeping;
  • The effect of technology on how we do things;
  • The availability of data; and
  • The expectations of clients/stakeholders.

The impact of technology on record-keeping

It is no secret that technology has changed the nature of accounting. The transition from the manual capture of transactions to the use of computerised application packages is one of the most significant changes in recent years. I remember my first assignment vividly as a trainee accountant. I had to prepare an organisation’s year-end financial statements. 

The process went as follows:

  • Record purchase and sales invoices manually onto a paper-based sales and purchases ledger daybook;
  • Record all the payments made during the year by manually writing up all payments in the paper-based payments ledger using the cheque stubs; and
  • Manually prepare a bank reconciliation, and so on and on.

I wrote everything in pencil: no typing, no Excel formulas – all manual. One mistake in totting and I had to start over. My trainee days were not all that long ago, and it has been exciting to observe the changes in record-keeping in the intervening years.

The accountant has evolved from a data processor to an analyst. Mundane processing no longer consumes his or her time, allowing the accountant to step out of the detail and begin to analyse, interpret, question and provide insights thereby meeting the current expectations of the accountant. While technical ability is still an assumed skill, analytical and problem-solving skills are now a standard requirement on any job description for an accountant both in practice and business.

The form of examinations for trainee Chartered Accountants has changed in recent years, particularly at FAE level, to meet this expectation of our qualified accountants. The exams, through case study scenarios, reward students for their ability to apply technical knowledge to given situations and resolve problems identified rather than just regurgitating memorised material. 

The effect of technology on how we do things

In recent years, there have been significant changes in how we “do” our work (outside of record-keeping, as set out above) with advancements in technology. Basics such as email and social media have enabled easier and quicker communication and information flow. Take the audit profession as an example, which has transformed in the last decade due to an increased focus on technology in audit methodologies or simply as a tool to collate our audit documentation.

It is impossible to avoid the phenomena of blockchain, robotic process automation (RPA) and artificial intelligence. All these have begun to change how we do things, but more is to come as these technologies start to unfold and usage gathers pace. RPA, for example, automates high-volume, low-complexity administrative tasks. 
The use of RPA will not replace the entire job of the accountant, but it will save time in performing specific basic tasks which, as alluded to earlier, will allow the accountant to concentrate on analysing and interpreting data rather than producing it.

The spread of digital technologies and their impact on business has transformed, and will continue to transform, accounting and the competencies that professional accountants require. Accountants will need to be technology-aware and embrace technology as part of their day-to-day work. 57% of those members who completed the Chartered Accountants Leinster Society Annual Salary Survey 2018 believed that automation would have a positive impact on their career. 40% felt that the same was true for artificial intelligence. Judging by these statistics, we possibly have further ‘embracing’ to do.

The availability of data

With the increased use of technology also comes a vast increase in data. Accountants are now required to decipher large volumes of data promptly and be capable of summarising and presenting that data in an understandable manner for the end user, often non-accountants. Presentation skills are, therefore, another critical capability.

Data analytics is now an industry in its own right, with many of the larger accountancy firms employing hundreds of analysts to assist their accountants in analysing and interpreting data. 51% of members who completed the Chartered Accountants Leinster Society Annual Salary Survey 2018 believe big data will have a positive impact on their career.

The expectations of clients/stakeholders

With the advances in technology and the ever-changing world of business, the expectations from our clients and stakeholders have changed. We are no longer assumed to be in the back office processing but instead on the front line advising and challenging the status quo.

Communication and interpersonal skills are no longer ‘nice to have’ qualities. They are now required competencies for successful accountants. The building of relationships with our clients and stakeholders is vital as we make that transition from back-office operatives to front-line advisors.

Conclusion

Technology will continue to influence the work of accountants into the foreseeable future, and application of existing and emerging technologies will be necessary. Technology should, therefore, be embraced and not seen as a threat. The role of the accountant will continue to be exciting and challenging. Technical ability will become an assumed skill alongside other skills such as analytical skills, problem-solving skills and presentation skills. These will become the ‘must have’ skills for the successful accountant of the future.

Brian Murphy is Director, Audit and Assurance, at Deloitte and incoming Chair of Chartered Accountants Ireland Leinster Society.

This article was originally published in the June 2019 issue of Accountancy Ireland.