Institute of Management Accountants Senior Director Dr Josh Heniro says to remain future-relevant, Accountants must make a concerted effort to expand their knowledge beyond traditional accounting paradigms.
By Dr Josh Heniro
With 2021 approaching, transformation is upon us with the intersection of macro forces such as a changing economic and business landscape, and major advancements in technology such as data analysis with AI cognitive models.
Several of this year’s trends represent fascinating combinations of macro forces and other technology advances that will drive industry-wide transformational change in the years to come. This is especially so in the field of accounting – an important bedrock for the global economy.
For finance and accounting professionals, digital transformation is the perfect opportunity to use technology to enhance traditional management of regulatory reporting and compliance processes, which have remained unchanged for a long time. At the heart of this is tapping into advances in information technology and open data standards to reduce lags and latencies in business reporting and compliance processes. Today, corporate reporting teams, even at the largest global companies, are using myriads of basic spreadsheets and old technology to recompute, reformat, and reconcile the same data for compliance and submission to different agencies, regulators and end-users.
For the accounting and compliance professionals tasked with navigating this labyrinth of differing regulations, the ascendance of machine learning, artificial intelligence and automation provides the opportunity to aggregate and streamline data for reporting purposes with far improved efficiency.
We recently commissioned a study “A Digital Transformation Brief: Business Reporting in the Fourth Industrial Revolution,” which drew on research by Workiva, a provider of cloud-based compliance solutions, to addresses this issue and provide solutions.
Calling for a full data revolution in global reporting and compliance, the paper connects the ongoing digital transformation with the need for companies to better manage and automate the processing and reporting of data to multiple jurisdictions.
With unprecedented connectivity through increasingly sophisticated technologies, data standards such as XBRL (eXtensible Business Reporting Language), and innovations such as blockchain, cloud computing, and natural language processing, efficiency is increasing, underpinning new competitive opportunities and, notably, ensuring auditable data. AI will enable valuable improvements to an entity’s reporting process and transform regulatory monitoring systems. The accounting professionals who master the critical data in internal and external reports that drive the business will be invaluable in the Fourth Industrial Revolution.
How Finance Industries are Evolving
One key change we are seeing is the role of the accounting professional. With dynamic accounting technology, today’s accountant is no longer burdened with task-oriented projects. Instead, the shift in accounting software programs are becoming more automated, and the role of the accountant is changing to that of a business advisor.
Due to the time freed up by technology more efficiently performing routine tasks, the accountant of the future will spend less time on data manipulation and reporting, and more time on creating value through decision support, data analytics, data visualization, and storytelling. Instead of preparing reports, future accountants will interpret them and make recommendations based on the data.
They will capitalize on opportunities and mitigate risks. In this way, accountants will shed the perception of “compliance cop” and become strategic business partners and trusted advisors who use their financial acumen to inform:
Analysis. Deciphering the story contained in the numbers. Accountants cannot stumble onto patterns and trends; they must always be reading the data, proactively searching for them, being inquisitive, asking the right questions, and discovering answers in the data.
Strategy. Using data to not only report on an organization’s finances but to plan the future. Accountants will be called upon to make a greater contribution to long-term plans, drawing on the insights provided by Big Data and AI.
Leadership. Accountants must be able to properly communicate their findings and agendas to the rest of the organization and take ownership over initiatives. This will require skills that have never been fundamental to accountants, including the art and science of storytelling.
As companies face a shortage of these skills with their current finance teams, they also will likely commit more resources to train and re-train; this will offer opportunities for accountants to obtain the competencies and credentials required to succeed through corporate-funded programs.
Finally, accountants must be proactive in finding the jobs that will expand their capabilities and make them increasingly in-demand for years to come. As the changing priorities of the Big Four illustrate, the 21st-century accountant will be different from that of the last century. He or she must adapt accordingly. Nothing less than the relevance and influence of the accounting profession is at stake.
Universities and educational institutions are adapting their curriculums to prepare their students and subsequent graduates to be more future-ready for the workforce. The Certified Management Accountant (CMA) certification has updated its curriculum to be more relevant to the rising new demands, and the core practice areas include Technology and Analytics, Risk Management, Internal Controls, Professional Ethics, Financial Statement Analysis, and others.
When management accounting professionals have the necessary skills and abilities, they can create value in various leadership roles using strategic analysis, including:
- Help to develop innovation and growth strategies
- Review and refining strategies to create greater long-term sustainable value
- Analyze where the company is in a competitive life cycle
- Communicate the strategy within the company and to the board of directors
- Develop information for investor relations presentations by the CFO
- Evaluate merger and acquisition (M&A) opportunities and risks
- Assess the strategic risks of the organization; and
- Develop a strategy for the finance organization.
To become relevant in the future, accountants will need to make a concerted effort to expand their knowledge beyond the traditional accounting curriculum. From current students to experienced professionals, accountants must focus on reskilling and upskilling for the future. This will include certification in relevant programs that emphasize analysis, strategy, and leadership in addition to the more traditional financial accounting body of knowledge.
(Ed. Featured image of Dr Josh Heniro provided courtesy of IMA.)