Over the past few years, we have witnessed an explosion of new technology that borders on what we may once have deemed science fiction. From driverless cars to wireless microneedles that can deliver a precise drug dose in personalised medicine, the world is changing at a rapid rate. And the field of accountancy is no different
financial and accounting professions face one of the most challenging times since the Great Depression. Much conversation has been had about whether tax, bookkeeping and accounting jobs are going to be eclipsed by advancement of technology that will lead to the automation of many key functions currently performed by accountants. Some even fear that the advancements of the Fourth Industrial Revolution (4IR) will render accountants obsolete in the next 10 to 20 years. But the truth is that as members of the accountancy profession the value of your work, your ideas and your contributions to the world will be just as important in the future as they are today, if not more so.
That said, your success in responding to the challenges 4IR will raise will be determined by your ability of to move beyond traditional capabilities and embrace aspects of value creation and sustainability that are currently either controlled by others or, in the worst cases, not addressed at all.
How do you do this? You need to equip yourself to make the most out of the opportunities that arise from 4IR. After all, people have a key part to play in technology and they must be taught how to harness these changes for their own survival.
It is therefore imperative that accountants start a lifelong learning journey to prepare for the era characterised by technological advances – particularly as it relates to artificial intelligence, blockchain technology, and integrated thinking and reporting.
‘There is significant transformation taking place across the globe. A couple of years ago, some of the things we can do with technology today may not necessarily have crossed our minds. To think that we could hold meetings and conferences live and effectively via apps like MeetMe or Zoom is something that may not have been entertained before the effects of last year’s pandemic, but the fear of contracting COVID-19 and the lockdown regulations have normalised the use of technology. Even the sceptics of technology have had to use it and accept that it is an effective way of communicating,’ says Professor Tankiso Moloi, Professor of Accounting and Research Chair in 4IR Skills at the University of Johannesburg (UJ).
The same will soon be true for artificial intelligence (AI).
In broad terms, explains Professor Moloi, ‘AI is the art of making machines intelligent. Traditionally, a human will command a machine; they would react based on that specific command. AI means that machines can learn and make their own decisions. It is for this reason that accountants need to have a good understanding of AI as the dominant technology of 4IR.’
Already, companies are using AI to automate repetitive accountancy tasks such as uploading documents, understanding entries and classifying them under the right accounting codes. While this removes human error, improves accuracy and productivity, it also means that accountants are able to interpret large quantities of data at speed in order to extract actionable insights in real-time that provide real value for their clients.
Thus, as an accountant, ‘understanding the forms of AI such as machine learning, natural language processing and robotic process automation can help you reflect on how you could potentially deploy a form of AI in your own organisation’, adds Professor Moloi.
Another key feature of 4IR is blockchain technology, which consists of three primary pillars, namely decentralisation, transparency and immutability. It is these pillars that accountants need to get a grasp on as blockchain’s disruptive technologies transform business, economic and social systems, counters UJ Associate Professor in Accountancy, Michael Adelowotan.
This is because ‘the accounting profession is primarily concerned with the collection, measurement, analysis and communication of financial information. Because of its capability to maintain a ledger of accurate and immutable financial information as well as effecting the transfer and ownership of assets, blockchain is essential accounting technology as it helps to reduce the time and cost of preparing, maintaining and reconciling ledgers and provides assurance over the historical and ownership status of assets,’ says Professor Adelowotan.
‘With blockchain cutting down the time and cost of traditional bookkeeping and reconciliation functions, accountants can now focus their attention on other areas that are considered difficult to measure and report on,’ he explains. ‘For example, within a blockchain technology-enabled environment, auditors can build on the capabilities of machine learning to create alerts about the occurrence of unusual transactions on real-time basis. In so doing, block technology ensures complete visibility of transactions and the audit trail, ensures that the reporting tools provide a more robust performance insight in real time, and enhances the accountability and auditability of data in a distributed ledger system. So although blockchain could be seen as a threat to accountants who concentrate mainly on reconciliation work, it nevertheless provides opportunities to concentrate on other areas that require professional judgement and advice.’
Integrated thinking and reporting
In addition to the demands imposed by 4IR, accountants must also maintain the role of fulfilling their responsibility to report the creation of value to stakeholders in a transparent manner. ‘Through the emergence of technological advances, the volume of data increased significantly and increased the complexity in which businesses are operated. Information is available more freely but could dilute decision-making if organisations do not have the correct information or the necessary skills to evaluate information effectively. Therefore, the usefulness of information becomes even more key for decision-making purposes. The longer it takes to absorb and evaluate key information, the bigger the chances are of losing the competitive edge in your business which could impact value creation and long-term sustainability of an organisation,’ explains Milan van Wyk CA(SA), Senior Lecturer in Accounting at UJ. ‘Research has shown that leadership in organisations that apply integrated thinking are able to make more effective decisions and improve the dialogue with stakeholders as part of executing the organisation’s strategies. This in turn makes an organisation more agile in an ever-changing environment full of volatility and complexity.’ As a CA(SA) it is your role to as a leader in business to manage the interests of others, to think, plan and report the ‘story’ of the business. In order to communicate the value created, you’ll need to brush up on your IR skills so that you can assess the impact and interaction of the ‘capitals’ in a business and in turn use your findings to create value and think differently in an integrated manner.
Rising to the challenge
Accountants – CAs(SA) in particular – ‘need to obtain a basic understanding of the various 4IR-related tools at your disposal and to initialise them for implementation within your organisation. Do not leave the initiation to a data scientist or any other technical expert,’ warns Husain Coovadia CA(SA), Senior Lecturer and Deputy HOD in UJ’s Department of Commercial Accounting. ‘At the end of the day, you will be working together with the various tools to help make better business decisions so as to create a road map that involves all role players in the business from leadership to the finance, operations, IT, HR and so on, to create a successful AI environment that includes all the functions of the business,’ he says.
‘Now is the right time for accountants and auditors to rise to the challenge by offering themselves up for acquisition of knowledge in the unfamiliar fields of computer science, technology and engineering. This new skillset will include the understanding of the functionalities of blockchain technology, cryptography, hashing, coding and programming languages and more. This will be necessary in order for the accountants and auditors to be relevant in this new age and new economy.’
In pursuing the vision of preparing you for 4IR, SAICA, in collaboration with UJ’s Department of Accountancy, has launched four fully online short learning programmes to help members seize the opportunity to equip themselves with the relevant skillset, mindset and toolset that will enable you to create a leap as value creators in professional service delivery.
To find out more about these programmes visit SAICA’s CA2025 website for all the details.
Karin Jacobsen, Project Director: Marketing & Communication – Nation Building at SAICA