On 29 March we organised the Accountancy Europe Digital Day. Olivier Boutellis-Taft and Jyoti Banerjee share their views after the event.
Since the clay tokens of around 7000 BC, the accountancy profession has a good track record of adapting to technological innovation. As with all waves of change, many say this time is different; it may however be true in that for the first time, the human brain is losing some of its monopolies.
Today, knowledge, expertise, and experience are stored, built, used, verified, and shared in radically new ways. Computing power and connectivity make complexity a piece of cake rather than a headache – for machines, that is. Plus, developments in artificial intelligence and natural language interaction bring new prospects for robots.
How do these changes impact the accountancy profession? Artificial intelligence, machine learning, and data analytics do more than automating processes and replacing clerical staff: they open up new ways of doing things and create new things to do.
Thinking about new ways to do the same things we have always done will not take us much further. We must look at what new things can be done, what needs are emerging. While digitalisation represents a massive change, it is only one of the mega-trends currently reshaping the world. To make sense of what is happening, we must consider it in the light of other transformations taking place:
- Environmental destruction is directly impacting us through resource scarcity, the rising death toll due to pollution, and new waves of climate change-driven migration.
- Security threats make fighting against terrorism financing, money laundering, and other financial crimes a collective imperative.
- Income inequalities are having a negative impact on society and the economy through alienation, exclusion, and social unrest.
- Corporate or governmental information can be analysed – or leaked – more easily than ever, and are expected to be available and widely shared. With unprecedented scrutiny, public opinion increases political pressure.
What we see today is a growing demand from society for trust, ethical behaviour, and social and environmental responsibility. The hard truth is that any professional activity, including accounting, only exists if it creates value and responds to the needs of society. Technology can help us, but only if we use it effectively.
In such a changing environment where most of the things professionals used to do are being automated and new social expectations are emerging, we need to reinvent ourselves: what is the unique value proposition the profession can make? Five roads appeared to be worth exploring further.
Differentiating between means and ends
Machines can replace most of the tasks that professional accountants currently do, except deciding what these tasks are. Computers and robots can do many things except inventing their own purpose. Humans get to define what we want computers to do. However, once the task is defined and standardised, the need for human beings to perform it diminishes or even disappears; except where adaptability and flexibility are required (e.g. to change plans or stop a process), at which point the need for human judgement and emotional intelligence returns.
Defining and discovering the (real) problem
The most intelligent person or machine cannot solve an unidentified problem. Troubleshooting systems, and self-help tools can do wonders; except when the user leads those systems to the wrong problem. All professionals dealing with clients know that the true problem is not always what the customer thinks it is. Accountants still need professional judgement and emotional intelligence to understand and decipher the issue they are asked to solve. Over the past few decades, the profession has mostly focused on technical expertise – precisely the bit that is easiest to replace by robots. Soft skills, and emotional intelligence in particular, matter a lot more today.
Providing ethical judgement
Machines have no notion of right and wrong; they cannot respond to society’s demand for more ethics and moral values. This is a terrific opportunity for accountants whose professional values are more important than ever. At the end of the day, the profession’s purpose is to provide transparency, integrity, and trust – more than technical expertise, which is simply one of the means to that end.
Promoting responsible business
At a time when business is expected to become more socially and environmentally responsible, it is striking that the United Nations Sustainable Development Goals are not currently accounted for. We need technology to help us bring some clarity to the impact of business on the Goals, but algorithms on their own will not provide the answers we are looking for. Trained professionals are needed who can assess the impact of business decisions on other parties and stakeholders, on the public interest, and on future generations.
Accounting for more than finance
Over the last forty years, the evidence is that accounting and financial information is explaining less and less how companies create value. The International Integrated Reporting Council (IIRC) outlines the role other capitals (natural, human, manufactured, social and relationship, and intellectual capitals) play alongside financial capital in value creation. Modern technologies, such as cloud, mobile, and big data analytics, are rapidly multiplying the information that is being picked up across all the capitals. But someone needs to make sense of these capitals: making sure that business is absorbing the growing volumes of data and making good decisions in the short, medium, and long term. Clearly, the accounting profession is in an excellent place to be the conduit and arbiter between multi-capital data and sustainable value creation. But this will only take place if the profession is willing to move beyond financial capital as its sole focus – the challenge is for accountants to become multi-capitalists.
Building on the profession’s long-time commitment to the public interest, there is a unique occasion to refocus on what matters most by responding to an acute demand of society and become more relevant than ever. However, to be able to seize the opportunities, it is critical the profession not only embrace change but also reinvent our ways of thinking and acting.
Olivier Boutellis-Taft has been Accountancy Europe’s Chief Executive since 2006, drawing on a diversified professional experience as a consultant or a director in the worlds of professional services, European affairs and technology.
Jyoti Banerjee moderated the Accountancy Europe Digital Day conference. He has over 25 years’ experience of the intersection of business and technology. He leads the <IR> Technology Initiative at the International Integrated Reporting Council (IIRC).