Current Technological Trends in Accounting

The global accounting industry is changing rapidly, partly because of productivity optimisation made possible due to advanced technologies. Accountants in present times are no longer pressured with task-centric projects. Rather, owing to the transition in dynamic accounting technology, automation is ruling accounting software programs and the role played by accountants is transforming to that of advisories. As digital technology shapes finance and accounting into an analytical powerhouse which obtains insights from data, accounting talent will require a new set of skills (Islam, 2017). The present report makes a detailed comparison between the existing and future trends in technological innovations in the accounting industry. It also encompasses the skills, job opportunities and work ethics for accountants in the two scenarios.

Accounting technology has had an instrumental role to play in rendering the job of an accountant easier. As the industry’s knowledge of technology augmented so did the ability of accountants to evaluate statistical figures. This is still applicable as we gradually proceed through 2017 with an emphasis on accountants having a greater expertise in advanced skills, particularly now that majority of the routine jobs are being done by computers (Haque and Islam, 2015). Currently, in Australia and even globally, technology is changing the industry in below mentioned five ways:

1. Cloud Computing-  This is an internet based computing which offers shared computer processing data and resources to the computer on demand. This enables accountants to do their tasks from anywhere irrespective of their current location together with the ability to provide financial reports and information through the cloud. This has paved a novel means for accounting firms to collaborate with their clients. There is a greater time in hand to get involved with the customer and concentrate on business strategy rather than getting burdened with cumbersome procedures (Miles, 2016). The real strength of cloud accounting software lies in its flexibility. Xero by itself provides more than 500 features in its ecosystem. This helps bookkeepers and accountants to develop a bespoke practice to meet client requirements.
2. Innovations in Tax Related Software – The tax software being used presently has facilitated higher accuracy whilst mitigating margins of error – something firms wish to adopt to prevent tax penalties and avoid issues with stakeholder groups. Advanced tax software also assists in streamlining audits thereby making them more effective and efficient.
3. Mobile Accounting – Professional accountants are increasingly becoming reliant on their mobile devices for accessing data. Higher mobile connectivity creates a bridge between accounting firms and their clients. Accounting software providers like MYOB and Xero are introducing the mobile epoch of accounting in the SME sector of Australia. The mobile apps offered by these companies enable accounting firms better manage their operations while being on-the-move (Kepczyk, 2016). Accountants can add receipts send invoices, reconcile and build expense claims from their mobile devices.
4. OCR Technology – This technological innovation allows accounting firms to convert scanned paper documents, images or PDF files taken by a digital capture into searchable and editable data. Such kind of record digitisation has assisted in streamlining the archiving process by making documents sortable, searchable and transferable. OCR also provides the added advantage of empowering accounting organisations to become nimbler with their activities and processes. This innovation has at last eliminated the hand-fed receipt. Though OCR has already enhanced manifolds, however, there is enough scope for process improvement (Nixon, 2016).
5. Social Media – For companies wishing to engage with their existing and future clients whilst extending their branch reach, social media has turned into an imperative tool. This tool is continuously evolving and offering accountants a significant marketing and sales platform which can instantly link companies to their existing and future clients. Maximum accounting organisations fathom the significance of incorporating conventional marketing into their business development plans. However, several firms might fail to acknowledge the power of converging social media with their long-run marketing strategies (Bell, 2016). Those companies that are consistently doing this have amplified the efficacy of all their business and marketing efforts. Social media is disclosing more data as compared to any corporate assurance report.

Starting compensation packages for bookkeepers and accountants in Australia increased by 3.7% in 2017. This is because accounting firms are expecting more from the graduates seeking to work in this industry. This is partial because of the way technological innovations are influencing daily operations in the sector (Marr, 2016). One data extraction and categorization get automated, new skills and competencies come into play. One of the trends in the accounting industry currently is the need to find qualified and skilled accountants. As it is a customer-centric industry, firms require employees who can cultivate relations with clients, whether on phone or face-to-face. Automation of manual work implies that the firms can move the accountants having passion and energy up the chain and get them to interpret the numbers and assisting customers, rather than chasing them. This also implies that newcomers to the sector ought to be technologically aware and possess the skills and intuition to make it work for the clients (Drew, 2012). Some of the key skills and qualifications currently demanded by employers in the industry for specific positions are as follows:

Accountants – To qualify for recruitment, candidates must have sufficient credentials and certifications to serve as evidence for accounting competency. The most desirable certificate for a career as an accountant is CPA. Affinity for numbers, analytical skills, communication skills and sound knowledge of computers is required to pursue a career as an accountant (Fleay, Poustie and Mroczkowsku, 2011).

Accounting Assistant – This is an entry-level job and demands a certificate of accounting assistant to get employment. Applicants seeking this position should be able to do arithmetical computations, have knowledge of key entries, are able to define problems, organise, evaluate and draw logical conclusions. Being capable of dealing with tax returns and running payrolls conforming to Australian standards are also crucial skill sets (Scott, 2017).

Current Required Accounting Skills

Bookkeeper – This position demands strong technological capabilities and mathematical skill-set, high attention to detail and excellent interpersonal skills.

Accounting jobs are high in demand in Australia because of the enhanced nature of corporate financial concerns. Several firms are recruiting qualified people with accounting certifications, education and experience to manage their fiscal operations. Many accounting firms are seeking individuals to ensure that their checks and balances and accounting services satisfy industry standards. Due to the growing number of corporate scandals and audits, organisations are recruiting more people to undertake financial auditing and accounting services (Ghasemi et al., 2011). Certified accountants have a plethora of job opportunities, with full-time employment available in the fields of financial services, business, health-care, education, military, government, etc. Apart from being an auditor or accountant, there are many related jobs in the financial services sector, wherein employers need people to have accounting experience and education. Some of these include budget analysts, tax examiners, financial analysts, etc. However, with greater integration of technology in this field, all the above positions demand one thing in common and that is digital literacy (Suddaby, Saxton and Gunz, 2015).

The Accounting Professional and Ethical Standards Board Limited has issued APES 110 which is a guide to ethical conduct for professional accountants. All professional accountants in Australia ought to abide by APES 110 and also when extending Professional Services in an honorary capacity. A differentiating factor of the accounting profession is its espousal of the responsibility to serve in the interest of the public. Hence, an accountant’s responsibility is not just to meet the needs of the employer and/or client. By serving in the public interest, accountants must observe and abide by the Code (Gleeson, 2016). An accountant needs to conform to the following key principles namely: integrity, professional competence, objectivity, due care and confidentiality.

The very core of accounting is the processing of numerous amounts of data, which is assimilated, presented and employed to offer accountability and make sound decisions. Cognitive learning and computer-oriented automation are supposedly the ideal combinations for an industry heavily reliant on the convergence of human diligence and wide amount of data. Artificial intelligence in accounting goes beyond the usual defined computation and automation of procedures to stimulation of human acumen (Kaplan, 2016). Data analytics is an expected opening port of call. There is a profundity to assessing data with human astuteness. It is one thing for computers or software to implement the already-defined logic on organised data, but another for it to comprehend what is crucial by reiterating over examples of unorganized data. For instance, Kira Systems provides machine learning blended with contract evaluation. By seeing current unorganised contracts and documents, and learning with time the importance of information to the parties examining them, it can differentiate critical clauses, determine precisions and style loopholes, and emphasise them for further analysis. Last year only Deloitte announced that it has started employed Kira to effectively discern and give insights into customer-specific issues by reviewing pertinent documents (Warren, Reeve and Duchac, 2017).

Current Career Opportunities

The auditing domain is especially interesting, where substantial transitions in the process like sampling are likely. In some cases, machine learning could be employed to the whole database preventing the requirement for individual and manual analysis. KPMG claimed that its recent association with IBM is likely to lead to a quantum leap in the kind of information used in compliance and auditing and the speed with which it is processed. However, the audit is not the only target. Companies are looking at how automation and AI could be used in advisory and taxation domains (Ford, 2015). There is a high level of multifariousness in interpretation and administration of tax law. However, this does not stop computer programs from playing an instrumental part. Automated learning can be employed for interpreting legal and case law amendments and determine where they are pertinent to individual customers. Advisory can also be an important application of data analytics. Chartered Accountants Australia & New Zealand (CA ANZ) is formulating CA Kairos, a big data platform which when presented to the member accountants will facilitate the extraction of germane data and conceptual picture of the insights (Jha, 2013).

Besides data analysis, the second avenue for Artificial Intelligence in Accounting is the utilisation of voice recognition technology. MyFirmsApp is scheming to utilise the technology used in Amazon’s Alexa to build AI applications for accounting. This may come in the form of hearing client requests and extracting information. Voice recognition will provide a “face” to the clients and an interaction ability, while the potential of machine learning could give content (Frank, Roehrig and Pring, 2017). The use of this technology could prove to be valuable in general admin functions also. If this is converged with AI based communications, e.g. simply chatting, writing letters or communicating solutions, companies will have strong PA which could be at the discretion of their clients 24/7. By 2021, more texts will be conveyed by machines than humans (Woods and Linsley, 2017).

Such breadth of usage raises the question about the role of professional accountants in a space where AI assumes more and more workload. Similar to most technological innovations, the consent appears to be that AI is likely to leverage an employee’s ability to perform functions, rather than entirely replacing them. Cognitive learning allows for higher collaboration between systems and humans – hence, though it is a game changer of accounting in the context of the profundity of assessment, it is still going to need insights from skilled accountants and auditors (Harrison, 2016). Likewise, automation has mitigated the dependence on humans for trivial tasks; AI carries the potential to decrease the dependence on humans in myriad applications radically. This must imply that accountants will be independent to innovate, improve and refine their skills for higher-level tasks.

With the seemingly great amount of benefits future accounting technology is likely to bring for the accounting profession, it is crucial to take a look at their limitations as well. These include:

Security Breaches – As accounting firms will be storing their critical information on remote cloud servers that can be accessed merely by a password and username, they are exposed to losing their information to viruses, hackers and people with malicious intentions (Kshetri, 2013).

Current Ethics

Accounting Fraud – Accounting software data demands a high degree of security to avoid issues such as embezzlement and fraud. With software, it becomes easy for users to change data, thereby rendering it easier to manifest fraud. Consequently, future technologies will require more internal auditors to review any data inconsistencies (Scott, 2017).

Human Error – While there may be technologies in future which completely eliminate human error, but likely future innovations do not eliminate this loophole. Though it is easier to write figures wrongly, it is even simpler to mistype a figure. Feeding data into the software in a hurry might lead to big errors and with the programs doing computations, it could be more challenging to trace the root of the problem (Warren, Reeve and Duchac, 2017).

Changing technology – Due to rapid changes in technology, automated accounting systems might become obsolete over time. The operability of an old system is restricted as compared to an updated one. This implies accounting firms either continue to operate on the system having lesser features or invest every time to upgrade to an updated version (Harbison, 2016).

Emerging trends and drivers in business, technology and science are rewriting the landscape for professional accountants. Some of these drivers influence the complete accounting profession, while some influence particular specialist roles and areas. By 2020, all accountants will be required to cultivate and exhibit the ability to merge their technical knowledge and skills with soft skills pertaining to interpersonal qualities and behaviours (Islam, 2017). The professional quotient (PQ) of every accountant will show their skills and competency across seven areas namely: Experience (XQ), and Technical Skills and Ethics (TEQ) will be merged with digital awareness (DQ) and intelligence (IQ); Interpersonal qualities and skills will be manifested in quotients for vision (VQ), creativity (CQ) and emotional intelligence (EQ) (ACCA, 2016). Some of the strategic competencies expected to be most critical for accountants in the next five to ten years are demonstrated below:

Technical competencies	Skills, Behaviours and Knowledge
Holistic perception of corporate accounting and reporting	Enhance the reporting of non-financial data and match it with prevailing financial reporting needs.
Financial Reporting Framework	Oversee modifications and evolving trends in accounting regulations and standards. Analyse the financial position and performance of clients. Assess the different valuation frameworks employed by standard setters (ACCA, 2016)
Communication	Managing relations – engaging, influencing strategies and negotiating with the clients. Balancing contradictory interests, assuming a global stance.
Expertise in digital technologies	Hands-on knowledge of prevailing and emerging digital technologies. Comprehension of digital delivery systems and novel mechanisms to access IT resources like private and public clouds (ACCA, 2016)

AI, automation and cloud accounting will not eliminate the need for professional accountants. In fact, such technologies are likely to create more demand for skilled and digitally adept accounting professionals. Human direction and oversight will be required and wanted for in the future. For the accounting professionals, the key would be to concentrate on those domains of their work which are more challenging to automate like business advisory function, instead of mere number crunching. Simultaneously, it is important that all accountants adopt the new realities and learn how to work with intelligent algorithms and software tools (Gleeson, 2016). By figuring out how to work with, instead of fighting automation, accounting professionals are likely to get a stable career path in the future. This is because the demand for Data Scientists, Scenario Planners, Behavioral Scientists and SAP/Oracle consultants is likely to grow in Australia in the next 5-10 years.

The future accountants will also need to evaluate the ethical dimension within business decisions and issues and their effect on financial strategy and management. They should be able to set ethical financial policy, strike a balance between conflicting stakeholder requirements, and align with professional ethics. They will have to contemplate and behave with professional scepticism, integrity and independence. Future accountants should continue to follow codes, guidelines, procedures and principles stated by the Australian professional body, global standard-setters and local regulators (Harbison, 2016). They will need to set and conform to procedures and policies for minimising threats to independence, like familiarity with old clients and execute suitable safeguards.

Future Technological Trends in Accounting

The group reached the consensus that advancements in accounting technology in Australia have allowed accounting firms to automate their information systems. Due to growing automation, accountants ought to develop the skills required to run these systems. The group is the belief that the use of advanced technology is bringing opportunities for accounting firms to undertake accounting operations more efficiently and effectively because cloud, mobile technology and automation have introduced considerable cost and time savings. Obviously, many fear that such growing innovation will eliminate jobs, but the group believes that this is a job creator. This is because in the short-run it is not likely that firms will completely trust a machine to perform such complicated and critical tasks. Human direction and supervision will be required. Our group perceives the medium-term future of accounting industry replete with intensifying automation where much of the processes would be completely automated and where company accounts would be prepared by machine learning algorithms and submit the tax returns independently. Simultaneously, audits would also be undertaken by AI tools, and tax returns and accounts examined and checked automatically by the machine learning systems of taxation authorities. The group thinks that the most popular breakthroughs and trends in the accounting industry till date entail complex tasks such as regulatory compliance, risk management, receipt reconciliation and trend analysis.

Conclusion

It can be concluded that computers, the Internet, servers, personal and wireless digital devices have changed the way accounting firms do business. Software packages have also enhanced conventional processes and operations. The accounting industry of Australia and in fact, globally has experienced remarkable advancements due to the innovations in technology. Accounting software facilitates automation of traditional accounting books and paper ledgers. User-friendly interfaces and low-cost cloud-based software have proliferated in the past some years, encompassing not just industry leaders like Xero and MYOB but also incumbents like Wave, Mint and QuickBooks.

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