The Creative Destruction of Accounting
South African Institute of Professional Accountants
4 September 2019
The media expounds daily on how accountants will become obsolete in the Fourth Industrial Revolution (4IR). Their work, it says, will be taken over by robotic process automation (RPA), or software bots for short, and their analytical functions will be assumed by artificial intelligence (AI).
“In fact, 4IR could be the ‘extinction event’ the Profession has been hoping for,” says Shahied Daniels, Chief Executive of the South African Institute of Professional Accountants.
Adapt or die
Both businesses and Professional Accountants are constantly exposed to the “stick” argument, that either practitioners find ways to add more value to their services or become redundant in the face of emerging technologies. According to Daniels, there’s a strong “carrot” side to the story.
“For too long, highly trained accountants have been held back from realising their true potential as trusted business advisors by menial data administration and laborious number crunching,” he says. “Rapid advances in technology will take the pain out of accounting and free the practitioner to focus on service delivery excellence and diversifying their offerings.”
Less data capture
Much of an accountant’s work is administrative in nature and is sometimes considered to be nothing more than a necessary evil that cannot be avoided. But RPA applications have become affordable enough to perform traditional data entry. Further, AI and data analytics systems can assist with the heavy number crunching on which the practitioner’s talents are often wasted.
Less physical measuring
It’s not unusual for an accountant to, for example, fly out to an oil rig and spend a week personally checking output levels. They are so often called on to give assurance on non-financial information that a dedicated standard exists to regulate such activities. Now, companies can attach cheap sensors to the appropriate equipment and have the desired information transmitted over the Internet of Things (IoT) directly to their management information system (MIS). This allows AI-driven data analytics to not only validate the measures but also predict future performance.
An important aspect of RPA and AI is the speed with which work can be completed. Decision-making is time sensitive but the required administration and reconciliation of accounts, and subsequent compilation of management reports, can sometimes take weeks. New technologies can reduce decision-making delays and allow leaders to respond to business conditions in near real time. It also empowers accountants to focus on outputs and their impact rather than the truth and accuracy of inputs, which is assured by the business system itself.
A shock to the system
Accountants who find themselves relieved of their traditional duties may feel like a fifth wheel in a system they helped build. Daniels believes it is an ideal time for them to reflect on their true purpose. “The Professional Accountant has been forced by systemic inadequacies to operate more at the points of input and processing,” he says. “They must now embrace a paradigm shift and discover the full spectrum of opportunities that exist beyond the point of output.”
SAIPA, in collaboration with its parent body, the International Federation of Accountants (IFAC), of which it is a voting member, continues to work closely with its members to prepare them for 4IR through expert support, future-ready competency frameworks and technology-aware accounting standards.