1. Future of Professional Accountants
Presented by: Rashied Small
SAIPA Northern Region Mini-convention - July 2016

2. Endangered Species – Professional Accountants
Future of Accounting

3. Accounting Profession – Future????
Will your job be stolen by a Robot?
93.8% to 97.6% of the work of accountants will be automated
Future of Accounting

4. Technology & Professional Accountants
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5. The primary responsibility of the Professional Accountant is to protect and serve the public interest:
Vibrant and competent professionals
Highly trained & ethical
Value of Professional accountants:
Contribute to the economy and economic growth
Ethical business behavior and reporting
Confidence in the accounting profession
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6. Demanding Environment
Business owners: require more than standardize financial statements (past performance) – business information and advice for decision-making (immediate response and information)
Financial Reporting: standard financial statements (compliance with IFRS) has increasing compliance and cost implications - may not meet the requirement of the SME business owner (emphasis on the engagement and regulations)
Ethical behaviour: balance between serving the interest of the client (business owner) and the public interest – responsibility for reportable irregularities and business risk (professional conduct)
Regulations: compliance with regulations and standards (holistic business responsibility with respect to compliance issues)
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7. Important Role of the Accountant
The success and sustainability of a business is underpinned by the reliability and accuracy of the accounting records maintained:
Measure of the business activities carried out
Measure of the performance of the business
Basis for decision-making and planning
Major requirements of SMEs:
Planning and control – budgets and forecasts
Compliance with financial reporting requirements – SARS and debt providers
Utilisation of technology for monitoring performance
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8. Journey of the Professional Accountant
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9. Analysis & Review
60% of accounting services costs are tracked to labour
Accountants work an average of 2,172 hours annually
25% of accountants work part time
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10. 7 Sins of the Accounting Profession
Emphasis on transactional versus value add
No single “source of authenticity or truth” for data
No strategy to manage talent
Lack of focus on staff development
Staff’s expectation gap - disconnect between concept of responsibilities & expectations
Mismatch of skills alignment with allocated roles & responsibilities
No plan for future growth & expansion
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11. Market Expectations of Professional Accountants
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12. Changing Expectations
More than financial reports: it is not sufficient to just provide accounts, statutory and backward focused compliance related support
Value added service: approach that support the business growth and not just dealing with numbers in isolation
Proactive: be a trusted business advisor/consultant and partner
Trusted business advisor
Beyond financial statements: do not presents numbers; present insight about the numbers
Value added service: understanding of the client’s business and the available levers that generate value
Advisor: make recommendations that are practical and actionable
Strategic partner: conceptualise the vision of the business and the impact recommendations have on its success
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13. What does the future hold?
1. Compliance reporting is commotitised – static and standised
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14. Survival of the Professional Accountant
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15. Future Trends
1. Increased focus on client service: Providing enhanced customer service, leveraging technology to automate processes and free up staff, while providing more personalized and strategic advice and counsel to clients - connections have shifted to deep to ever-present and open-ended.
2. Technology integration challenges: Making strategic investments in technology while providing a smooth migration and integration to emerging technologies - technology will have a major impact on their ability to provide service, support, and added value to clients.
3. Digital mobility opportunities: Reducing capital costs; increasing service and employee productivity by leveraging mobile devices and digital platforms; and consolidating and integrating cloud-based information repositories - .
4. Talent management and succession planning: Identifying and managing talent, developing new and different skill sets, and managing the retirement of senior leaders – human resource planning through training and development, succession and exit planning.
5. Social media as a business tool: Becoming more sophisticated in the use of Twitter and other social media to market their business, finding and engaging clients online, and monitoring the competitive landscape.
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16. Evolution of the accounting environment
Pre-electronic:
Manual process with high risk on accuracy & costly
Electronic:
Use of computerized packages with low accuracy risk & improve efficiency
Post-electronic:
Use of cloud & multi-media & improve accessibility
Pre-electronic:
Manual process with high risk on accuracy & costly
Electronic:
Compliance report – financial reporting in compliance with legislation
Post-electronic:
Business advisor – value added services with a focus on sustainability
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17. Future of Accounting

18. Relevance of Professional Accountant
Making a difference
Feedback value
Predictive value
Timeliness
Business owners: require more than standardize financial statements (past performance) – business information and advice for decision-making (immediate response and information)
Financial Reporting: standard financial statements (compliance with IFRS) has increasing compliance and cost implications - may not meet the requirement of the SME business owner (emphasis on the engagement and regulations)
Ethical behaviour: balance between serving the interest of the client (business owner) and the public interest – responsibility for reportable irregularities and business risk (professional conduct)
Regulations: compliance with regulations and standards (holistic business responsibility with respect to compliance issues)
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19. Future of Accounting

20. Transformation of Professional Accountants
Provider of financial information – compliance function
Provider of qualitative information – sustainability & integrated reporting
Trusted business advisor – consultant for business decision-making
Report on the value creation capacity of the business – reporting beyond financial statements
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21. Future of Accounting

22. Evolution of report
Financial reporting: reporting in compliance with accounting standards (facilitated by the use of accounting packages)
Sustainability reporting: reporting on the going concern and sustainability of the business (corporate governance and business risk)
Integrated reporting: reporting of the utilization of resources/capitals to achieve the strategic objectives of the business through its business model.
Value reporting: reporting on the activities which generate value to the business and stakeholders
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23. Value Added Services
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24. Value Reporting Prioritise business objectives
Business performance measures
Operating performance
Business value reporting
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25. Eliminate barriers to change Technology integration
Client Centricity
Eliminate barriers to change
Value employees
Diversify skills
Technology integration
Evolve
Accounting firms must embrace a more client-centric approach to doing business if they are to prosper, grow and remain relevant into the future.
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26. Evolution of Accounting Services
Virtual CFO
Strategy, Financial planning & decisions
Stewardship Services
Management Report, Financial statements & Cash flow analysis
Transactional Services
Bookkeeping, Payroll & Tax
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28. Future of Accounting

29. Need to enhance Business Reporting
Historical financial statements
Enhanced business reporting
PAST PRESENT FUTURE
Lagging Indicators
Leading Indicators
IFRS for SMEs (one size fits all)
Tied to mission, vision and values
Ignore non-financial information
Tied to critical success factors
Report results of past decisions
Moves decision criteria to the forefront
Backward looking (feedback reporting)
Forward looking (predictive reporting)
Historical (usually cost basis)
Real-time (usually value-basis)
Financial and quantitative reports
Comprehensive and customized reports
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31. Big Data and the Professional Accountant
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32. Illustrating the Use of Big Data
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33. Virtual Accounting
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35. Value Added Service
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39. Professional Accountant – Your Choice
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40. Professional Accountant – Your Choice
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41. Future of Accounting