The Chartered Accountant • Journal of ICAI July 2022 • Vol. 71 • No. 1 • pp. 48–51
VISION - GLOBAL LEADERS

Accountancy revolutions: How the profession needs to respond to technology and sustainability

Jelena Misita Author is Chair of Professional Accountancy Organization Development & Advisory Group, IFAC. She can be reached at jelena.misita@revicon.info and eboard@icai.in

The Dual Catalysts: Technological Acceleration & Sustainability Mandates

On technology, the COVID-19 pandemic and resulting current environment has accelerated the need for PAOs use of digital technologies to create new, or modify existing, business processes, including member and student experiences.

On sustainability, the recent establishment of the International Sustainability Standards Board (ISSB) has accelerated the need for the profession to lead on services related to climate reporting and other material environmental, social and governance disclosures—contributing to strong and sustainable financial markets and economies and enabling the United Nation’s (UN’s) Sustainable Development Goals (SDGs).

The Imperative to Adapt Accountancy Education

But PAOs also need to consider how they are equipping current and future members with the competence and subject matter expertise required for the digital world and sustainability-related services. Accountancy education needs to adapt.

Even where strong educational infrastructure is in place, the maintenance of that infrastructure is a resource intensive activity. PAOs, together with the various role-players in accountancy education, face a significant burden to maintain educational resources while upskilling qualified professionals in emerging competency areas such as technology and sustainability.

Technology and Digitalization: From Tools to Institutional Transformation

Our daily life has become a digital life. Business increasingly means digital business. Governments increasingly deliver services through e-government solutions. Many PAOs have invested in information technology solutions to support them to find efficiency in their traditional ways of delivering member-services. But having adequate technology is only one part of the story.

“Digital transformation should be the long-term objective and endeavour for all PAOs. For the PAO, investment in digitalisation is necessary because, at a minimum, it will permit continuity of core activities and increase efficiency, effectiveness, and quality of member services.”

It requires organisational leadership support and buy-in, building workforce capabilities, empowering people to work in new ways, and increasing effective communication throughout the transformation.

IFAC & cloudThing PAO Digital Readiness Assessment Tool

Given the importance of digital transformation to PAOs’ long-term sustainability and resilience, IFAC has partnered with cloudThing to create a PAO Digital Readiness Assessment Tool. The PAO Digital Readiness Assessment Tool has been designed to measure how digitally ‘mature’ an organisation is or where they already are on their digital transformation journey.

This tool is not only an instrument to help PAOs develop their strategy and plans, but it is also an educational resource to help PAOs continue their journeys.

Fostering a Bottom-Up Cultural Shift

Digitalisation presents an opportunity to adopt a bottom-up culture whereby staff and members are equally enthusiastic about driving change as senior management and leadership. Getting feedback and ideas from staff and members will build confidence and trust, ensure investments benefit a PAO’s primary audiences, and communicate the PAO’s longer-term vision and strategy.

Key Findings: IFAC & cloudThing Digital Readiness Report

This transformation is most needed in the context of accountancy education. In a new, soon-to-be-released report from IFAC and cloudThing on the digital readiness of PAOs, it has been found that:

  • 66% of PAOs are still trying to define an approach to online learning (including online examinations): This means that most PAOs are still offering education through traditional classroom channels, and exams are predominantly paper-based. But the pandemic has highlighted the urgency for PAOs to leverage technology in their approaches to accountancy education. This is important for the PAO to remain relevant and to reach a wider audience, including those outside of major urban areas.
  • A significant global divide exists in how technology is covered in accountancy education: While developed PAOs have been able to fully integrate technology competencies into their curricula and assessments, PAOs in less developed markets need more support and involvement in making this transition on how to enhance the professional competence and development and application of the knowledge, skills, and behaviours needed in ICT by aspiring and qualified professional accountants. All involved in accountancy education are encouraged to utilise this valuable resource.

Sustainability: The UN 2030 Agenda & Emerging PAO Challenges

The UN 2030 Agenda for the SDGs is the clearest and most comprehensive framework to address the issues of sustainability and is quite clear when it says the SDGs are “integrated and indivisible and balance the three dimensions of sustainable development: the economic, social, and environmental.”

Sustainability reporting and related services are critical pillars in the fight against climate change, social inequity, and the achievement of the SDGs. These services also represent a great opportunity for the profession to contribute to the public interest.

Sustainability reporting, as well as the assurance of sustainability reports, is quickly becoming an essential function for the accountancy profession. Outside of the profession, an increasing number of companies, development agencies, and governments are starting to embrace sustainability goals. Still, there are several challenges for less-developed PAOs that must be acknowledged:

1.
Curriculum & Competence Building:

Work is needed to equip existing and future members with the subject matter expertise they need for sustainability-related services.

2.
National Advocacy & Standard Adoption:

PAOs need to advocate in their countries to support the adoption and implementation of international sustainability standards and to demonstrate why accountants are best placed to provide sustainability-related services.

3.
Empowering Small and Medium-Sized Practices (SMPs):

While the larger accountancy firms are already upskilling their network firms across the globe, local small and medium-sized practices (SMPs) will find it particularly challenging to take hold of the opportunity presented by sustainability reporting. Less-developed PAOs need support to in turn, support their SMP members in this area, including:

  • Convincing them of the opportunities that exist.
  • Helping them to upskill themselves to be able to offer relevant services.
  • Positioning their practices to respond to the market demand for sustainability-related services.

The time for action on sustainability is now: IFAC recently issued a call to action for the profession which delineates the actions the profession must take, why and how the profession must lead on the path of sustainability.

The Multidisciplinary Future & Our Ethical Comparative Advantage

In closing, technology and sustainability are areas where there is much opportunity for the profession. The accountancy profession is becoming more multidisciplinary as the expertise of non-traditional contributors becomes essential to our daily work. This is an opportunity as these developments will create a need for trusted advisors with wide skillsets and collaborative abilities.

The Ultimate Comparative Advantage

“The integrity and professional ethics of an accountant remain our comparative advantage. Wherever economic growth is sustainable, these qualities will be prized.”

IFAC Global Resources, EdExchange Series & PAO Advisory Group Mission

For more information on these topics, IFAC has dedicated webpages for technology and sustainability. For those interested in exploring further, the impact of these topics on accountancy education, IFAC has published a series of presentations by experts through its EdExchange Video Series, several of which relate to technology and sustainability.

As the PAO Development & Advisory Group, we are actively contributing to these agendas and supporting PAOs through advising IFAC, enabling access to relevant resources and expertise, assisting and mentoring developing PAOs, and advocating for the strengthening of PAOs in support of the profession.