From ledgers to AI: Inside the new world of accounting

To get a sense of the evolution of accounting over the past 140 years, consider the profession’s terminology and talking points.

While “ledgers“ is still common parlance, it is “large language models“ that sparks water-cooler conversations. Old-school “calculators” and “depreciation schedules” have ceded ground to “the cloud” and “agentic artificial intelligence (AI)” as the topics everyone is talking about.

The reinvention is about more than words, of course. The day-to-day work of modern accountants is vastly different to that of their late-19th-century peers. Dr Jasvinder Sidhu, an accounting academic and historian, says the profession can celebrate moving from a narrow focus on bookkeeping to becoming a strategic powerhouse that shapes organisational decision-making, public policy and digital transformation.

“Today, accountants are not just record-keepers; their role has expanded and continues to evolve,” he says. “They are risk advisers, data interpreters and governance leaders working within different teams and making significant contributions.”

Momentous times

In Australia, part of this force for change started in 1886 when 45 accountants met in Melbourne to discuss the future of the profession.

Recognising the need for greater rigour and substance in accounting, the group decided to form the Incorporated Institute of Accountants, Victoria (IIAV), which was formally registered in 1887. In so doing, those accountants became the founders of what is now known as CPA Australia.

Over the years, CPA Australia has grown to include over 176,000 members while opening offices in New Zealand and key Asian jurisdictions such as Singapore, Hong Kong, China and Malaysia.

Kaushika Jayalath CPA, a technology consultant at Oracle and a member of the CPA Australia board, says the professional body has made an indelible mark on accounting in the Asia-Pacific region, helping members stay engaged and informed on topics such as AI, cloud computing and environmental, social and governance (ESG).

“These are all aspects that I see a CPA Australia member being able to tap into much quicker than others because of our core program, as well as the professional development offerings available at our fingertips.”

Turning points

While the earliest known evidence of accounting practice dates back more than 7000 years to ancient Mesopotamia with primitive transactions involving animals, livestock and crops, the profession has truly progressed and thrived in more recent centuries.

In the 1880s, American railroads needed dedicated bookkeepers and accountants to keep trains on track financially. The Great Depression put the spotlight on weaknesses in financial reporting and auditing, triggering the establishment of the Securities and Exchange Commission in 1934 to tackle abuses and fraud in securities markets.

The world wars accelerated cost accounting. From the 1960s, the broad rise of multinationals fast-tracked global accounting standards. The Asian financial crisis in 1997 and the global financial crisis in 2008 underscored risk oversight. Earlier this decade, the COVID-19 pandemic demonstrated how accountants support resilience, cash-flowmanagement and government stimulus management.

“These events consistently expanded the profession’s scope and public value,” Sidhu says.

The Asia-Pacific region has also been at the forefront of changes, notably because of globalisation in the 1980s and the outsourcing of services and production from developed countries to the developing world. Key milestones have included the establishment of major professional bodies and the rapid rise of global capital markets requiring robust, harmonised reporting.

“More recently, the push toward integrated reporting and sustainability disclosure has been especially influential across the Asia-Pacific region,” Sidhu says. “Given the environmental and other sustainability challenges that we face, the role of accountants has become much more important in terms of sustainability and environmental reporting.”

Welcoming women

One of the most compelling subplots in the history of accounting has been the rise of women in the profession. Today, women make up about 50 per cent of CPA Australia’s membership.

This is a far cry from the days of Mary Addison Hamilton, who in 1915 became the first Australian woman to be admitted to a professional accounting body when she joined the Institute of Accountants and Auditors of Western Australia (a precursor to CPA Australia).

Likewise, the 1977 appointment of Price Waterhouse’s Elizabeth Alexander as the first female partner of any of the nation’s largest accounting firms stands as a pivotal moment.

Alexander remarked at the time that “once [male partners] realised I was serious about having a career and was prepared to put my shoulder to the wheel to achieve it, my sex became irrelevant”. In 1988, she went on to become the first female national president of CPA Australia (then known as the Australian Society of Accountants).

AI and automation

The growth of accounting has been fuelled by rapid advances in the technology used to perform many of its functions. From the first calculators and spreadsheets to cloud platforms, automation and generative AI, the advent of increasingly impressive technology platforms has allowed accountants to do their work with greater precision and scope.

One clear example of this tech transition is research that shows high adoption rates of digitalisation strategies among Chinese accounting firms.

Accounting software providers such as Xero and MYOB have also been game changers in recent decades, enabling automation for small and medium-sized enterprises that no longer depend on expensive in-house servers.

Today, AI in all its forms promises to take automation and capability to new levels.

An accountant can now deliver a report in a matter of minutes, not days. “That, in effect, changes the skill set needed to be an accountant, because now you need to be good at prompt engineering,” Jayalath says.

With an eye to the future, he believes CPAs will play crucial roles as “AI auditors who direct, control and validate the technology”.

The next phase

As economic trends, geopolitical tensions, ESG requirements and AI adoption reshape the profession, CPA Australia members are preparing for the next phase of change.

Expect the core values of integrity, accuracy and stewardship to be complemented by an expanded set of capabilities such as AI proficiency, data governance capabilities and sustainability reporting expertise, as the profession’s ethical landscape grows more complex.

Skills will also evolve as accountants respond to the need for new advisory services for environmental stewardship.

Jayalath believes that while the language of accounting will evolve, the fundamental meaning of the job, to hold people accountable, will remain a constant.

“Yes, we have gone from ledgers and books to calculators and computers and now to prompt engineering,” he says. “So accounting and its requisite skills will change, but the profession is still very much needed for the sustenance of the world.”