By David Lam
This is the question often asked by parents and children who are considering their career in accountancy. Am I pursuing a career that will be made obsolete soon by Artificial Intelligence (AI)? If I am an accountancy professional, will the robot take over my job? To provide answers to the above, we shall approach the questions in three parts:
• What are the jobs of typical accountancy professional?
• A survey on the current AI landscape for the accountancy professionals?
• How can accountancy professional work with and not against AI?
The Jobs of a typical accountancy professional
He is a money man. He is entrusted with the responsibility to manage the financial resources of the company – financial resources needed for the day-to-day operations, for projects, for investments and future growth of the company.
The jobs entail cash flow and working capital management, the sources of finance like bank overdraft and short- and medium-term loans from banks, issues of bonds, issue of shares, initial public offering (IPO). It also entails a good working relationship with stakeholders, like suppliers who provide trade credits, bankers, bondholders and shareholders.
To maintain good relationships and build confidence with these suppliers of credits, regular reporting of the financial position and financial performance of the company through financial statements is essential.
He is a Statutory Financial Reporting Man
He is responsible for the preparation of financial statements (from source data like customers’ and suppliers’ invoices, records of money received and paid), and the reporting and interpretation of the financial statements to the Management, the Board of Directors, to existing shareholders in Annual Reports and the Annual General Meeting of the shareholders, to potential shareholders who intend to invest in the company in the stock exchange, to bankers, bondholders, creditors, employees, income tax authorities and the auditors.
Often at the Annual General Meeting of the shareholders, he is seated next to the chairman to help answer questions raised by the shareholders in respect of the financial affairs of the company.
He is the Conscience of the Company – A Watchdog or a Bloodhound
As an accountancy professional, he needs to exercise professionalism in terms of ethics, integrity, and corporate governance to safeguard the financial resources of the company. He is responsible for implementing internal controls to ensure that the operations of the company are carried out in an orderly and systematic manner. He also needs to ensure there are checks and balances in the systems and procedures of the company.
He has to maintain close liaison with the internal and external auditors, Risk Management Committee and Corporate Governance Committee to ensure proper corporate governance is in place.
In the context of the Malaysian corporate scenarios where there are substantial leakages and corporate failures due to corruption and unethical practices, the role of the accountancy profession as a bloodhound is even more needed and significant to safeguard the financial resources of the company.
He is a Financial Performance Measuring Man
He facilitates the measuring of financial performance via the setting of financial goals and budgets for various strategic business units. He prepares and provides actual financial performance statistics while using these to measure against the financial goals established for each strategic business unit. In the measuring exercise, he provides analysis for the variances from the set goals and recommends remedial actions to enable the goals to be achieved. Often these financial performance goals are tied to the key result indicators of the responsible managers and form the basis to provide incentives and rewards for managerial performance.
He is a Strategic Business Leader
He is one of the strategic business leaders helping and facilitating the company to formulate short term and long-term decision making to sustain the operations as well as the growth through organic means or mergers and acquisitions.
Together with the Chief Executive Officer, he must have a deep sense of awareness of potential risks arising from the advent of disruptive digital technology that may disrupt and transform existing business models. He must be aware of what risks to avoid and what opportunities to capitalise with the ever-changing digital business.
As a strategic business leader, he must be deeply involved in the cognitive understanding of the business, its financial performance, the changing environment, the changing technology, the changing buying behaviour of its customers, the analysis of trends and the prediction of the future using the latest tools like big data analytics. In doing so he will be in a better position to avoid threats, strengthen weaknesses, capitalise on strength and opportunities to help ensure the sustainability of the company for the long run.
Brief Summary of the Jobs of a typical Accountancy Professional
• It is a position of trust and accountability – where professionalism, ethics, integrity must be exercised.
• It is a position that requires complex technical and professional skills involving analysis, decision making, judgment, scepticism, creativity, and innovation.
• It is a position of heavy responsibility – helping to sustain the short-term survival and long-term growth of the company.
Think! Can any existing AI machine do the above jobs?
Now let us turn our attention to the existing landscape of AI. The landscape of AI-related to the Accountancy Professionals.
Briefly, AI can be defined as:
Computer does something that requires the intelligence of a human, or anything that mimics human intelligence or the ability of a computer programme or a machine to think and learn.
Big data and data analytics
These relate to the systematic computational analysis of data and statistics which are now generated with very high volume, velocity and veracity. Through the algorithms, the computer can be programmed to recognise patterns and hidden trends and to help predict and trigger issues before they happen, rather than react after the event.
Through this capability, the computer can be programmed to predict the buying pattern of consumers so that the company can predict and plan for specific expansion of the product line to capitalise on the buying pattern to increase revenue. Have you ever wondered why YouTube often predicts and recommends your favourite programmes?
The capability can also be used to speed up problem-solving, improve the quality of decision making. We often listen to entrepreneurs who say that I have been in this business for 30 years and I make my decisions based on guts-feel and I have not yet been proven wrong! Now he can improve the quality of his decisions on a sound scientific basis based on big data and data analytics. Data analytics are also used in weather forecasts and to predict the coming of natural disasters. Current users of big data and data analytics are Airbnb, Alibaba and Jindong to predict customers’ buying trends.
The spotting and prediction of pattern and hidden trend helps in the decision-making process. Big data and data analytics would not take over the jobs of accountancy professional. It is just a tool to help him make better decisions.
Robotic Process Automation (RPA)
RPA is a robotic process to automate the input of large volumes of data for accounting operations and ultimately for preparing financial statements. It is used in data entry, form processing, data migration and data input from paper to digital. It may also be used in pulling data from the website to find the best deal.
RPA can automate a very high volume of mundane and rule-based processes and help to reduce human errors. It is more efficient and works 24/7 without tiring. It reduces human drudgery by automating repetitive tasks. It is cost-saving and reliable and it also provides the audit trail.
RPA does not take over the job of accountancy professional. It helps to free his staff from the mundane, repetitive tasks to focus on jobs that add more value to the company like focusing on financial statement analysis and recommending timely remedial actions for adverse variances from the set financial goals.
To an accountancy professional, blockchain is a distributed, decentralised public ledger. The goal is to allow information to be recorded and distributed but not to be edited. Entry can be made at different geographical locations. It is verified but it cannot be changed. Therefore, it eliminates third-party verification. It is a secure, private, efficient, and transparent technology.
It is used by banks, Bitcoin, healthcare, property records and smart contracts and even in voting. It is also used by supply chain management in the real-time tracking of goods.
A Blockchain is a distributed ledger used to keep records more efficiently. In no way it can take over the jobs of accountancy professional. Whereas he can use this distributed ledger to do his job more efficiently.
Cloud Computing and Social Media Platform
Cloud computing is data and programmes in the “cloud”. It is used for file storage, data backup and disaster recovery. It is a service platform to enable flexible and remote working. Geographically dispersed teams can work together on the same project in real-time. Microsoft One Drive, Google Drive and Dropbox are examples of cloud computing platforms that we are all accustomed to using daily.
Social media like Facebook is a platform normally used in marketing to reach out to the target audience and potential customers. It is also used as a network to facilitate communication with peers. The influence in the voting trend in general elections and the use of the platform to call for street demonstrations exhibit the power of such social media. Likewise, in the lock-down pandemic scenarios, it may be a powerful marketing tool to reach out to your target customers. These are tools for users to help the accountancy profession in the performance of his jobs. In no way his job was threatened by these tools.
A great deal of the jobs of an accountancy professional will require multi-discipline technical, professional skills (accounting, laws, government regulations, accounting standards, listing rules and so on) and the synthesis of this knowledge and skills with ethics, integrity and human interaction to arrive at judgmental decisions, exercise scepticism and creativity to resolve issues, sustain operations and to plan. AI cannot do that!
For example, in the expansion of business through mergers and acquisitions, the process will involve business evaluation (valuing the worth of the business to arrive at a value for negotiation), negotiation (often many face-to-face meetings), preparation of sales and purchase agreement based on the negotiated terms and conditions (require legal knowledge and expertise) and the final cultural assimilation of the two or more businesses (the merging of business culture and practices involving human behaviour). It will be impossible for a machine to do the above jobs!
No Doubt at All- AI Cannot Take Over the Jobs of Accountancy Professional
With the ever speedy emergence of new technologies like AI, an accountancy professional needs to respond and embrace and harness new technologies like robotic process automation to enhance the productivity, effectiveness and efficiency of the company. He does not need to fight new technologies. He embraces new technologies to place the company in a competitive position and place himself too in a position where he is ahead of his peers
About the Author: David Lam Hai Chiang is the Director and Head of Imperium Centre for Professional Accountancy at Imperium International College. This is an opinion column. The thoughts expressed here are those of the author.