At a glance
The role of the accountant has shifted significantly over the past decade. Accenture’s Finance 2020 report predicts that robotics will automate – or eliminate – up to 40 per cent of transactional accounting work by 2020. Will this weaken basic accounting skills?
Fellow at the MIT Initiative on the Digital Economy
I am concerned about the occupational future of accountants, but I am not very concerned about the loss of basic accounting skills. What worries me is the loss of basic accounting jobs – particularly at the entry level.
There is considerable evidence that a portion of routine accounting tasks will be taken over by smart machines in the near future. The Big Four accounting firms have substantial initiatives underway in this area, and it is already clear that many audit and tax tasks will be automated.
The tasks to be taken over are relatively routine: extracting key provisions from contracts, performing inventory counts, retrieving information from multiple information systems, and the like.
Such tedious activities never involved a great amount of skill in any case, and I suspect accountants will be able to maintain enough knowledge of the process to take over if necessary. However, those routine tasks are precisely the ones performed by entry-level accountants. If we automate them, we’ll need substantially fewer entry-level hires.
There will still be a need for professional accounting judgement and expertise to interpret the results of automated processes, but I am concerned that with many fewer entry-level workers, how will higher-level judgement and expertise be cultivated in the future? It takes years of experience, which may be difficult to obtain. To my knowledge, no firm is addressing this issue.
Tony Young FCPA
Partner, Audit, KPMG
It’s not a case of automation undermining skills – it’s about equipping young accountants with the skills they require both today and tomorrow.
Mundane accounting and audit tasks will become history. Graduates won’t join firms and be vouching invoices; they will be solution architects, problem solvers, data analysts, design thinkers or storytellers instead. These are the skills that will drive enhanced audit quality.
In the world of distributed ledgers/blockchain, a deep understanding of debits and credits will be less important and an understanding of IT controls and access controls much more critical.
Already, traditional audit sampling of financial transactions is fading out; analytics tools and machine learning can assess whole populations and identify outliers or anomalies. At KPMG, our use of cognitive technologies is accelerating, with a series of applications currently in deployment that cover intelligent automation through to chatbots and machine-learning algorithms.
Within 10 years, the client finance function could consist of a CFO, a series of bots that process transactions, and an AI platform to help with the judgements. The numbers will be accurate, material errors non-existent, and there will be a full audit trail.
Audit quality is critical and will continue to be the focus of our future accountants. The skills of our people plus intelligent automation tools make the future an exciting place.
Manager, accounting and finance, Robert Walters
Transactional accounting tasks are certainly becoming more automated, but this doesn’t mean that basic accounting skills, such as picking up on financial anomalies, are being undermined. The principles are still important, it’s just that accountants don’t need to apply them directly in their roles to the same extent, because technology can do it for them.
I think the automation of some routine accounting tasks is resulting in a change in the learning process for entry-level accountants, whether that’s at university or when obtaining their professional qualification. It’s becoming fine-tuned towards stakeholder engagement and analysis because that’s where their greatest point of value is heading. These are the kinds of skills that employers are looking for across all levels of the accounting profession.
Historically, the accounting role was considered a back-office function that was tucked away in the corner of a business. Now it’s very much a front-line role that is viewed as essential for driving a business forward. We’re seeing a shift in the market; the term “accountant” is being replaced by “finance analyst” and “business partner”. This reflects the evolution of the role.
Automation is clearly having an impact on the accounting industry, but this skill set will always prevail: commercial acumen, and the ability to analyse financial information and communicate that to other areas of the business. Whether you’re at an entry level or a more senior point in your career, these are the skills that are in demand.
Thomas Davenport is the president’s distinguished professor of information technology and management at Babson College in Massachusetts and co-founder of the International Institute for Analytics. He is also a fellow at the MIT Initiative on the Digital Economy, and senior adviser to Deloitte Analytics. He has written 19 books and hundreds of articles and blog posts. His most recent book (co-written with Jeanne Harris) is the revised and updated bestseller Competing on Analytics: The New Science of Winning.
Tony Young FCPA
Tony Young is a member of CPA Australia and an audit partner at KPMG. Other roles he has held at KPMG include chief operating officer and senior partner, energy and resources.
Mark Hetherington has worked for Robert Walters recruitment consultancy both in Australia and the UK, and currently heads up one of the accounting and finance teams in Melbourne. Degree-qualified in finance, and having recruited in the industry for a number of years, he has closely watched how the accounting discipline has transformed on an international scale.