ICAEW warns of risk of marginalisation and reduced relevance due to tech innovation
ACCOUNTANTS are in danger becoming ‘marginalised’ and ‘irrelevant’ if the profession fails to adapt to disruptive technology trends, the ICAEW has warned.
Capabilities such as cloud computing and data analytics are enabling accountants to do things even quicker, cheaper, better and with less human intervention, but trends like automation, self-service and information on demand poses risks to the future of the profession.
“There is a growing risk of marginalisation and reduced relevance of financial professionals due to tech innovation,” said Richard Anning, ICAEW’s head of IT Faculty. “Finance professionals should pay attention to areas that remain difficult to automate, such as where human judgement is required.”
The shift to online, cloud and mobile platforms has changed the nature of client relationships, the ICAEW said in its report, Providing Leadership in a Digital World.
The report takes a fundamentally positive view of the future and highlighted opportunities in new financial technology – such as cryptocurrencies, new payment systems, and platforms – to cut costs, improve revenues and provide new services.
“For those with the right skills, technology presents great opportunities,” Andrew Ratcliffe, ICAEW’s president, said at event in London to mark the launch of the report.
“Accountants have to see innovation as an opportunity they can embrace and benefit from. We need to help them prepare for changes so that they can thrive in a more automated and technology-driven environment’.
The large audit firms have invested heavily in big data and analytics to support new approaches to audit, as well as their other services. The shift to full dataset analysis means less reliance on data sampling when undertaking testing procedures.
This allows for “greater emphasis on spotting patterns, outliers and exceptions, focusing audit activities on the areas of greatest risk”, the report said.
The report also pointed to changes in corporate reporting in which balance sheet information could become increasingly irrelevant as corporate values become more reliant on data and other intangible assets.
“Historic financial reporting could become marginalised by new sources of real-time information about company performance gleaned from the internet or accurate predictive models,” the ICAEW said.