Here are the 14 ways Chartered Accountants and the wider profession are likely to evolve into the future.
In 1996, chess grandmaster Garry Kasparov was famously beaten by IBM’s supercomputer, ‘Deep Blue’. This event was heralded as the real dawn of the age of artificial intelligence (AI) and the beginning of the eclipse of human intelligence. Kasparov sees it differently. He believes that while the rise of AI heralds a change, this change will not see human intelligence becoming redundant. Instead, AI will “help us to release human creativity. Humans won’t be redundant or replaced; they’ll be promoted.”
Kasparov’s vision is one where machines and humans work together to create smarter tools, and where human work will evolve and adapt to open up new careers and industries in fields that are yet to be invented.
Although machines won’t replace humans, the impact of technology on the accountancy profession will be significant. Many reports have trumpeted the imminent arrival of new and powerful learning machines that will replace accountants. While accountancy remains one of the occupations liable to disruption, the future is less dramatic with a transformation of the role and impact of accountants more likely than wholesale replacement. Here are some of the changes we can predict.
1. The gig economy
The concept of the ‘job’ is fundamentally changing with professional service firms increasingly utilising flexible resources such as contingent workers and freelancers. Platforms such as Upwork.com allow professionals to sell their services to a global audience. According to Forbes, there were 53 million freelancers in the US in 2016. By 2020, this will rise to 50% of workers (this does not mean they will be full-time freelancers, however).
2. No-code AI
Software engineers and data scientist are expensive and in demand, but a new generation of technology is emerging. No-code AI will remove the need for engineers, making AI far more accessible. Some tools, such as Lobe.ai, use simple ‘drag and drop’ interfaces while others require no more technical ability than that needed to create a simple macro. These tools will enable skilled but not specialist users such as accountants to develop fully automated scripts with no coding know-how required.
3. The end of reconciliations
The good news is that the end of reconciliations is in sight with the rise of distributed ledger technology. Blockchain is one such technology and is probably most associated with cryptocurrency. One of blockchain’s most exciting aspects is that it is immutable, meaning a blockchain ledger will be permanent with an unalterable but transparent history of all transactions. Each verified transaction is timestamped and embedded into a ‘block’ of information, cryptographically secured and joined to the chain as the next chronological update. Blockchain’s applications potentially include decentralised digital, secure identity systems; the verification of qualifications through personal ‘skills wallets’ and reliable records of property ownership. Another new application already happening in real estate is tokenisation, which, as the name suggests, is the representation of an asset or equity in token form, which can be fractionally divided and held. A tokenised property would be similar to a real estate investment trust (REIT), but more flexible and low-cost due to the reduction in intermediary fees.
4. No more late night month-ends
As processes are automated and systems post data from several sources, consolidate and reconcile it, month-end cycles will become far quicker and more accurate.
5. The end of sample auditing
Audits will become more efficient and accurate as the audit of 100% of companies’ financial transactions becomes possible instead of a sample. AI will provide unique insights and a complete view of the financial health of the company, uncover fraud, highlight inefficiencies and provide further value from the audit.
6. Drones and robots
Amazon is already embracing using robots in its warehouses and testing drones for customer deliveries. Power utilities use drones to survey their lines while surveyors use them for mapping terrain. Just this year, PwC used drones during the audit of RWE, a German energy company, to measure stock, including coal reserves at a power station in Wales.
7. From compliance to insight
Technology will simplify many processes and augment our human capabilities. Over the next 20 years, there will be less focus on technical skills alone and a higher requirement for critical thinkers and those who can provide insights. Clients will likely prefer to deal with a human over a robot, and Chartered Accountants will have the opportunity to become a financial storyteller by bridging the gap between computers and the business.
8. Real-time, self-service data
Cloud technology has made accounting software accessible to non-specialists on any device and in any location. Information is available in a format that most business owners can finally understand. As this becomes the norm, the role of the accountant will be to give peace of mind, to provide reassurance, and to act as a sounding board. He or she will also be someone who understands the capabilities of the technology, can ask the right questions, and can find the right solutions.
9. Lifelong learning will become an imperative
Speaking at this year’s Influence conference, Ravin Jesuthasan, a thought leader on the future of work and automation, spoke about the impending changes to work. He said that while “we don’t know what is coming, we need to keep retooling ourselves”. We must change our mindset, he said, as the old model of ‘learn, do, retire’ is replaced by ‘learn, do, learn, do – repeat’. In this situation, lifelong learning is no longer optional; it will be necessary to remain relevant and employable.
10. The pyramid is collapsing
The familiar pyramid-shaped organisational structure will change. Traditional entry-level roles are unlikely to be needed in the same volume as routine tasks become automated. Conversely, the requirement for qualified staff is likely to increase. The challenge for organisations will be balancing these needs: how to train and develop individuals to the required level with fewer entry-level positions. The question for educators and those entering the workforce is how to bridge this gap effectively.
11. Thinking differently
While technical skills will remain crucial, a premium will be placed on soft skills, which are the skills that differentiate us from robots. Emotional intelligence, presentation skills and critical thinking will become even more valuable in the years ahead.
12. Chatbots and decision-making
Instead of diving into CHARIOT for technical information, accountants may have a unit on their desk – think Alexa or Google Assistant – which will be there to answer questions instantly. We could also see AI take a role in the review of complex documents so that, rather than spend hours poring over a 500-page contract, a machine will scan a document in seconds and determine whether it contains compliance and risk issues, for example.
13. Planning cycles will contract
Speaking at the Influence conference, Valerie Daunt, Human Capital Partner at Deloitte, said: “Long-term plans are gone”. Instead, organisations must be able to change course quickly. To underline this point, Standards and Poor’s recently reported that the average lifecycle of companies is shrinking, with the average lifecycle of companies on the S&P 500 expected to be just 12 years by 2027 – down from 33 years in 1964.
14. The changing nature of the workforce
The workforce is fast becoming more diverse, more international and with different values. Today, over 20% of the Irish population was not born in Ireland, and this rises to 33% of the working-age population in Dublin. Attitudes are changing too – one recently published survey found that 60% of workers are willing to take a pay cut to work in an empathetic company, while 35% said they would consider taking a reduction in salary in exchange for more annual leave. It was also reported that 50% of millennials would take a pay cut to work for a company that matches their values and that this cohort values “experiences over stuff”. Source: Joe Carroll is Head of Professional Development at Chartered Accountants Ireland.