PracticeAuditFuture shock – what next for accountancy?

Future shock – what next for accountancy?

Accountancy Age is celebrating its 40th birthday, but what will the next 40 years hold for the profession? We ask the experts to find out

Ted Awty audit partner, KPMG

Common reporting internationally will drive consistent global approaches. IT
developments are key. We shall see comprehensive embedded audit tools
highlighting control compliance and exceptions, running irrespective of year
ends. These could extend along the entire supply chain in many industries and
will deal with all of the information at the core of reporting. Beyond this the
use of judgment in many areas will remain and the auditor will need to be
equipped to identify, test and confirm these judgments. With common
international reporting and a global IT infrastructure, the profile of an
auditor should be more consistent across the world leading to a global
qualification and an auditor population that has shifted towards the main global
economic centres of the day.

president, UK200Group

I believe there will still be the Big Four, unless an ‘Andersens’ type
catastrophe strikes one of them down, while there will be further consolidation
amongst the second-tier firms as they try to compete with them and shift their
focus to larger clients.

This will leave ‘smaller’ practices, such as those in the UK200Group to
service traditional owner-managed business (OMB) clients. There will always be a
market for good-quality, personalised advice, which firms such as the group’s
are perfectly suited to provide.

Will these OMBs still need an audit? I hope not! I would rather they spent
their money with us on something useful! Audit should only be compulsory for
those businesses which have stakeholders outside of the management.

Les Clifford audit partner and CFO programme leader, Ernst
& Young

Like technology, the pace of change accelerates at a compound rate over time.
To envisage what change may look like over the next 40 years, we should review
how the relationship between corporates and the accountancy profession has
evolved over the last 100 years – a marriage that has spanned a period almost as
long as many of today’s accountancy firms have been in existence. We have moved
from being bookkeepers and historical reporters to one of today’s key business
advisers to the corporate world.

However in the next 40 years a greater emphasis will be placed on
peer-to-peer relationships providing prospective advice and interpretive
commercial and financial analysis.

And in a future corporate world where finance has been totally automated and
assurance and analytical software has been embedded into standard operating
systems, we may see IT companies providing some of the accountancy profession’s
traditional services, or accountancy firms with significant global IT operations
as a core offering.

first editor of Accountancy Age

Audit will have been segregated from all other services as legislators pamper
to those advocating the purist intellectual argument about independence. Respect
for “accountancy” as a broad-based profession will have diminished further and
be seen entirely as a regulatory profession. Bright young graduates who are
seeking intellectual and/or commercial challenges in the financial and tax
arenas will look elsewhere – (i) in the legal profession or possibly investment
banking if they favour an advisory role or (ii) via business school with or
without commercial accountancy qualifications, if they favour the commercial

current editor of Accountancy Age

Advances in technology will mean news about accountancy will be radically
transformed with the print edition of Accountancy Age replaced with an
electronic version delivered to a handheld computer. This could come in the form
of a holographic presenter who will deliver yours news. If print does continue
it will also contain video on paper thin screens.

The news will be different – highly personalised, not only in your sector but
also about your specialism. News will be highly integrated offering a digest of
content that is both vertical and horizontal in nature. But be warned: the more
news is tailored, the more advertising content will be too – especially jobs. In
40 years, job ads will be highly targeted and presented only to those qualified
to do them – whatever the format. The days of general advertising will

Tony Murphy partner, Bridge Business Recovery

One of the reasons the UK market has fared so well in the last five years is
the availability of cheap credit and the ability of its recovery processes to
quickly resurrect businesses. We have been able to preserve enterprise value.
There have been enormous drives in recent years to make insolvency a core
process and increasingly over the next few decades, I believe we’ll see growing
levels of regulation potentially resulting in a completely court-driven, totally
formulaic approach much like that seen in France and Germany today. This may
result in transparency and neutrality of appointments but will probably not
reduce costs and will not allow for innovation or any flair.

global leader, public policy and regulation, PwC

40 years ago a regulator was just the mechanism that made clocks keep time
accurately. Professions self-regulated, although self-regulation was not a term
that resonated then. Today, almost every aspect of the profession is regulated,
and the world-wide trend is for more not less. Not all regulation is bad, but
equally not all ills can be cured by regulation. It may be that the pendulum
will swing back to a better equilibrium, although there is no chance the clock
will be turned all the way back. Let’s hope that in 2049 the strength of
professional ethos and universally expected behaviours will allow a more
balanced environment.

CA student, PKF

The next 40 years? I honestly couldn’t say exactly, and that’s the fantastic
thing about a career as an accountant, it affords so much choice and
opportunity. Ideally, well I quite fancy life as FD of Manchester United! Should
they not need me perhaps a role in investment management, corporate recovery or
I hear being an audit partner has its rewards. Of course, I’m under no illusion
that such things take an incredible amount of hard work and a bit of luck, but
the challenge is what makes it so much fun, and that you can make your own luck.

Mike Power professor of accounting, London School of

Accountancy Age, December 2049, reports… A conference was held by the Chinese
Sustainable Standards Board to celebrate 30 years since its landmark publication
Carbon Accounting for Small and Medium-sized Businesses.

At the same event, speakers gathered to mark the 35th anniversary of the
abolition of the IASB and the beginning of the highly successful deconvergence
programme. The McDonalds professor of financial reporting diversity gave the
plenary address. In the UK, the Accounting Standards Board announced the
publication of a revised exposure draft on accounting for insurers.

chief executive, ICAEW

By 2049, there will be few, if any, barriers to individuals and companies
working and trading across markets. Business will operate on a truly global
basis and the accountancy profession will have evolved to reflect that. There
will be a limited number of high quality accountancy qualifications which are
recognised around the world and which will be held by the leaders of these
companies operating globally. These qualifications will be delivered by a select
few global professional accountancy bodies. They will continue to provide
services and support to their membership which will be spread around the world
with no focus on single individual country.

chief executive, ACCA

The next 40 years will see the rebalancing of the world’s economy from west
to east, with further redistribution of wealth as G20 and beyond come of age,
increasing the demand for more qualified accountants in the process. With
resource shortages likely to become more widespread, the ‘old’ world economies
will face a painful period of de-carbonisation as individual nation states seek
energy independence, which will enable finance professionals with expertise on
sustainability reporting to step out of the shadows in helping to save the
world. Globalisation of the profession will be the order of the day as outdated
protectionist and chauvinistic practices crumble. The profession will, at last,
catch up with developments in technology leading to enhanced reporting and
forecasting. International accounting standards will also have gone through a
root and branch plain English process, triggered by the extensive usage of the
IFRS for SMEs among the world’s many non-listed businesses.


There will be only two remaining professional bodies for tax agents.
Businesses will tend to seek tax advice from registered accountants but private
clients will prefer registered tax advisers as tax is more important to them
than accountancy. Registered tax advisers will typically work alone or be
employed by registered accountants, by lawyers or by big brands such as RAAC,
Tescobury, InsurancesDirect, The National Bank or The European Public Library
and Computer Service. All registered tax advisers will have a revenue officer
liaison opposite (ROLO) as their direct contact point in His Majesty’s Revenue
Collection Service.

permanent secretary for tax, HMRC

I’d like to think that relations between tax authorities and practitioners
will become less confrontational and more collaborative. If, by 2049, our tax
system is fully founded on trust and openness there will have been real
progress. I would like the tax system to be widely seen for what it is – the
provider of vital funds for public services. The internet and software that
powers financial services will become more intelligent, providing customers with
more control and flexibility over how they engage with HMRC. Sadly, there will
still be a need for compliance work and I think our systems will be driven by
intelligent software that anticipates abuse, taking action without reference to
human involvement. There will still be plenty for people to do because good tax
administration will always require sensitivity and judgment – that’s one thing
that won’t change.

national head of bankruptcy, Tenon Recovery

Today there are debtors and creditors – in decades to come there will, I am
certain, still be debtors and creditors. Debtors will need advice on their
options – at present in an increasingly complicated world; hopefully within a
simpler legal framework offering flexible and fair solutions in the future.
Creditors will want to know how best to recover their debt – at present in an
increasingly litigious world; hopefully in a more constructive environment in
the years ahead. Conflicts between debt recovery and the rehabilitation of the
debtor will though remain. IPs may look more like mediators than today; they
will still have a valuable role to play in advising all stakeholders on how to
resolve those conflicts.

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