Future of Accounting

By Gordon Greene,2014-05-16 11:05
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Future of Accounting

The Future of Accounting?

Amended Excerpt from the article:

    Apocalypse now: do accountants have a future?

    by Mike Walsh, Accounting & Business (ACCA)

    - see ACCA website for full article:

“......The accountancy profession has been indulging in a prolonged bout of really serious navel gazing


    The Americans naturally have launched the biggest enquiry.......Not to be outdone, ICAEW published its own vision of the future.........The message was.....:

    ? As a profession we face a much more competitive market for professional services.............

    ACCA has been ...... researching the competencies of its members worldwide........As a result of this exercise, ACCA has developed a competencies framework which identifies the range of skills and

    underpinning knowledge accountants will require to satisfy modern business needs and for some time to come.

    ACCA found that employers still value the traditional, core competencies of accountants, but these will no longer be enough. These competencies cover financial accounting, management accounting (including financial analysis and performance measurement), taxation and audit......., however, accountants will not be expected to be expert in all these areas.

    That was all there used to be to accountancy, but not any more.....increasing technical specialisation in the work of accountants, there is now a widespread requirement for a broad range of business advisory skills. Accountants are increasingly involved in the decision making process whether working in

    practice, industry, commerce or the public sector. Communications skills are almost more important than technical skills.........

But that‟s not all. Accountants must also have generic skills such as people management, personal

    development and, of course, IT skills. IT systems impact on all on almost all areas of finance and accountants must understand a number of IT roles in order to operate effectively. The ability to manage teams and projects will also be essential. In a rapidly changing environment the ability to identify personal needs and to update skills and knowledge will also be essential.

    ......all the research worldwide points to the same general conclusion: that life for accountants is tough and will become tougher..........

    So where do professional (accounting) qualifications go from here? First, they should, of course, preserve those traditional strengths which the market still values and which made accountancy the premier business qualification this century, at least in the UK culture. In the US, (however,) MBAs (have) long since acquired this role the most prestigious business schools.

    Clients (of accounting firms) still value professional accountants for their integrity and objectivity. AICPA (American Certified accountants‟ institute) views this as a natural market advantage which should not be thrown away lightly. This is one reason why AICPA is trying to leverage new assurance services off the traditional attest and audit functions of accountants. AICPA has spent $2 million developing its WebTrust product which will allow CPAs (American Certified accountants) to provide assurance to customers when using the Internet for electronic commerce.

    Note: Amendments are generally in brackets, or, as normally the case, words are missed out using

    „......‟. Otherwise, the only amendments are the addition of prefixes „:‟ and „-‟ with a new

    extra line „return‟ and extra „space‟ in order to accentuate points made in the article.

IMA (American Management accountants‟ institute) found that employers take it for granted that

    accountants will have excellent basic accounting skills and this is simply not true of MBAs. Accountants will still need solid technical knowledge, including:

    - understanding the balance sheet and income statement;

    - cost accounting; and

    - the interrelationships between debits, credits, assets and liabilities.

    Computers will produce the financial statements, and this will reduce the number of clerical staff involved, but somebody will still have to understand what is really going on.

    The catch is (that) accountants will have to explain this (i.e., their accounting technical knowledge) to non-accountants and non-accountants will also have far greater access to both financial and non-financial information. This is why accountants must have:

    - good written and oral communication skills;

    - good presentation skills;

    - excellent interpersonal skills;

    - the ability to work cooperatively and be a productive member of a team; plus, of course, - computer literacy and spreadsheet skills.

    The days are long gone when accountants could dump a large print-out on a manager's desk and walk away.

    This explains why IFAC, AICPA (accounting bodies in the US) and others are advocating qualifications in which:

    - only one third of the content deals with technical accounting, while

    - one third deals with business related studies and

    - the other third deals with non-accounting, non-business issues.

    The problem is this will lead to long, and costly education programmes, and a long period before trainees start earning their keep. The solution is that education does not come to an end at the final examination but goes on forever (i.e., continual professional development). Otherwise there is always book-keeping and you get to keep the abacus (or calculator).”

- See also ACCA Professors‟ Round Table, „The other millenium time bomb: educational malaise and

    technological change‟, July 1998: /199807p .htm

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