Digitalisation and technology adoption
New technology is changing the way people work and influencing client expectations. This shift to digital transformation has been accelerated by the pandemic, with changes to remote working practices that are unlikely to revert to pre-pandemic conditions.
What’s more, recent systemic changes from the likes of HMRC, including the previous and pending phases of Making Tax Digital, serve to ensure the adoption of appropriate technology – making familiarity with digitalisation an essential skill in the modern accounting industry.
Those who don’t commit will undoubtedly get left behind.
ESG: A growth opportunity for auditors
The pandemic and COP26 have shown that environmental and sustainability issues are fundamental to an organisation’s survival, with them becoming increasingly accountable not just for their finances but for the sustainability of their operations.
This is not just simply to ensure compliance, but increasingly, it is driving businesses short-term and long-term prospects. Consumer demand for environmental sustainability is likely to outstrip government-mandated action, but both should, and will, drive business adoption of sustainable practices.
This offers the accounting industry a significant opportunity, as managing that sustainability requires risk assessment and reporting skills, things that they are ideally placed to provide. As sustainability efforts evolve, so too is the sector primed to innovate through offering eco-conscious services to help their clients measure the degree to which they are operating sustainably.
Environmental, social and governance (ESG) issues are also now key concerns, as well as a major attraction, for global investors, with their sights fixed on sustainability and climate change. As a major part of that criteria, businesses will be required to measure and reduce their greenhouse gas emissions. As there aren’t yet any defined standards for ESG – although there are global standards under development – this offers a widespread growth opportunity for auditors.
Digital skills gaps
Artificial intelligence (AI) will change the face of accounting operations, delivering efficiencies, reducing errors, and optimising workflows, while assisting professionals with real-time business decision making based on data-driven insights. Demand for AI-based accounting software has increased thanks to the sharp rise in digital payments, fuelled by the pandemic.
According to a 2021 survey by the Institute of Financial Accountants, the automation of accounting tasks by AI and the increased use of cloud-based accounting tools by clients are the technologies recognised as potentially having the most significant impact on the future of accounting.
However, knowledge of AI technology was also lower than that of other technologies, with 55 percent of those surveyed indicating they had at best ‘some’ knowledge, while 15 percent indicated no knowledge at all. Meanwhile, 47 percent of respondents indicated that additional areas of training, including AI, incorporated into their accountancy training syllabus would better arm them for the challenges they face as an accountant. This clearly identifies a gap in training that must be addressed if the accounting industry is to stay up to date with the latest advancements in this area, particularly as the AI market is set to experience huge growth.
Demand for cryptocurrency services is growing
Foreseen by one major accounting firm as being well placed to “drive real productivity”, blockchain technology is already making progressive leaps in the sector by driving efficiencies and streamlining the tracking of digital assets. In simple terms, blockchain theoretically creates an entirely unique identifier, for example for a monetary transaction, making it fully traceable for its lifetime of transfer. This increases accountability, but also risks issues of ownership through theft and fraud.
Meanwhile for cryptocurrencies while these digital assets are currently only used for remittances, purchasing illicit goods, and transferring money internationally – mainstream adoption is said to be imminent. Trading platforms are also seeing a boom, with small-time investors and SME businesses dipping their toes into the crypto waters.
Although still in its infancy, blockchain has a lot of untapped potential, which is why an increasing number of firms and agents are adding it to their skillset. The demand for cryptocurrency services is rapidly growing and expertise in this area is still rather niche, presenting a significant market opportunity for accountants to seize.