Accounting industry sees shortfall in ‘techXpertise’, says IFA survey

Accounting industry sees shortfall in ‘techXpertise’, says IFA survey

A recent member survey by the Institute of Financial Accountants reveals a knowledge gap in emerging technology as accountants assess their future roles, with the industry body urging the sector to address such challenges to seize a golden opportunity for growth

Accounting industry sees shortfall in ‘techXpertise’, says IFA survey

In a recent survey, the IFA asked accountants aged 41 and under about the changing role of the profession in order to learn about the challenges presented by new technologies and to identify any skills and training gaps.

Automation of accounting tasks by artificial intelligence (AI), and the increased use of cloud-based accounting tools by clients, were the technologies that were recognised as potentially having the most significant impact on the future of accounting.

However, what the findings also revealed was the lack of knowledge of these technologies among agents and firms, something that warrants access to more training opportunities across the industry.

The game-changing potential of AI

AI is one aspect of new technology which is without doubt set to transform accounting operations, delivering efficiencies, reducing errors, and optimising workflows, while assisting professionals with real-time business decision-making, based on insights driven by accounting data.

AI-powered automated accounting software – demand for which has increased due to the sharp rise in digital payments, fuelled by the pandemic – will enable accountants to get more done, quicker, freeing them up to focus on other areas, expand their skill set, add value, and generate more revenue.

AI presents a significant opportunity for the accountancy sector but the apparent gap in training must be addressed if it is to stay up to date with the latest advancements in this area. Now is the time to provide aspiring professionals with the understanding and knowledge required by the future-ready accountant. It is becoming clearer how intelligent systems can enable better decisions in business and how accountants can harness them to their advantage.

Bridging the skills gap

This knowledge gap has been laid bare by the IFA’s survey, with 75 percent of respondents saying that they had at best ‘some knowledge’ of blockchain and cryptocurrencies, and 55 perecnt indicating a lower level of knowledge of AI, with 15 percent indicating no knowledge at all.

Of the five percent who indicated they had comprehensive knowledge of AI, all were based overseas. When asked about the effectiveness of their accountancy training and what areas they would like to see incorporated into the syllabus, 47 percent said that including technology – notably cloud software, data analytics, AI and practical business skills – would have better prepared them for the challenges they have faced as accountants.

What was perhaps particularly encouraging was that more than 65 percent of respondents said they felt confident in their knowledge, flexibility, and ability to keep up with technology and other challenges. Yet what’s important is to ensure all respondents – and indeed, all accounting professionals – have the same level of confidence, something that further training can support.

Value-added and specialist services

Members felt that offering broader strategic services, in addition to technical accountancy skills, was the most needed action to address the challenges facing accountancy (70.4 percent), followed by 58.6 percent seeing developing specialist skills in areas such as R&D, fraud prevention, and capital allowances as important.

This focus on training in non-traditional accounting skills was picked up strongly, with more than 73 percent of responses indicating that the sector could provide support in this area to help equip accountants in their future careers.

Industry trends and opportunities

New technology is drastically changing the workplace, as well as influencing client expectations. This shift to digital transformation has been accelerated by the pandemic, and Brexit has highlighted an appetite for education in the context of the global business landscape.

Cited by one leading accounting firm as being well placed to “drive real productivity”, blockchain technology is already making progressive leaps and bounds in the sector through driving efficiencies by streamlining the tracking of digital assets.

Expertise in this area can also ensure accountants are confidently positioned as specialists in their field, to guide and affect how blockchain is embedded and used in the coming years, and to develop blockchain-led solutions and services.

Furthermore, the scope is there for accountants to take on an advisory role offering guidance on assessing the costs and benefits of the new system to companies that are considering joining blockchains themselves. With a combination of business and financial know-how, accountants are ideally placed as key advisers serving as the glue between those who develop and apply the blockchain technology and their business stakeholders.

The pandemic and COP26 have also shown that environmental sustainability issues are fundamental to an organisation’s survival, as they become increasingly accountable not just for their finances but for the sustainability of their operations. Environmental, social and governance (ESG) issues are becoming key concerns – and a major attraction – for global investors whose sights are fixed on sustainability and climate change, offering a widespread growth opportunity for auditing.

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 for the modern accountant. Those firms which don’t commit will undoubtedly get left behind.

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