Article published on IFAC Gateway | The Accountancy Profession: This Way Forward
We are past the half-way mark in another unprecedented year, mainly due to the ongoing global societal crisis as presented by the COVID-19 pandemic. Recovery across the globe on economic and health fronts is unequal. Some jurisdictions are looking upbeat, with life returning to near normalcy. In others, not so, as the battle to safeguard lives and livelihoods continues.
Amidst this rapid-changing and volatile environment, the Confederation of Asian and Pacific Accountants (CAPA) has been monitoring the state of the accountancy profession as represented by its members, the professional accountancy organizations (PAOs) in, or with an interest in, the Asia Pacific region. The aim was to keep a finger on the pulse of the profession – to understand how the profession was responding, not only to the impacts brought forth by the pandemic but also to the inherent trends and challenges foreshadowed prior to the pandemic. We were also keen to understand and explore how the profession will move forward, how it will rise above all the noise in the midst of such global uncertainties, to remain relevant.
To assist pinpoint what defines the profession now and what will define it for the foreseeable future, CAPA undertook various surveys, polls, research and discussions at CAPA member forums to gain insights at regular intervals over the last two years. Some core themes and trends have certainly emerged.
In the most recent CAPA survey held in early July 2021, to which 81% of CAPA members responded, three (3) strong observations arose. These were further developed at a CAPA member forum that followed.
1. The PAOs and the profession remain positive, but effort was required to maintain stability
The sense of optimism observed in CAPA’s survey reported in the article1 on the IFAC Knowledge Gateway at the beginning of 2021, continued to prevail.
88% of the PAOs reported as being financially stable. Other positives highlighted included an increase in receptiveness to change, an accelerated rate of digital transformation, heightened innovation to deliver on member and student services, and the embrace of more nimble and dynamic operational models such as work-from-home practices.
Further, an overwhelming majority i.e., more than 90%, indicated that they have maintained stability or have thrived, with some changes being necessary. Considerable improvements were reported by some (18%). Correspondingly, a significant majority (94%) reported having made moderate or significant changes to their strategies, operating and business models.
The picture that emerged was of a profession working tremendously hard to adapt and succeed. However, in reaching this conclusion, one must acknowledge that in a few countries heavily economically impacted by the pandemic, such as where very dependent on tourism and/or with less access to developed technology and other infrastructure, the PAOs continue to struggle.
2. Key performance indicators (KPIs) remain strong but student metrics is an area of concern
KPIs such as member retention and engagement rates remained strong. 85% of the respondents indicated that they were able to provide CPD programs which met needs and requirements.
An area of concern did emerge surrounding students. While 55% of the PAOs reported that student engagement remained the same or was higher, other performance metrics had fallen. This included student registrations, and 64% noted the conversion rate of students to qualified members was lower. A few CAPA member representatives identified that the admission of new members in their jurisdictions was hindered by the inability to stage assessments on a timely basis.
On a positive note, respondents felt that the current setback to staging assessments was transitional in nature and should stabilize moving forward.
3. The need to focus on the next evolution of the profession is ‘now’
Confirming an earlier report2 published by CAPA at the onset of the pandemic, PAOs are now taking a ‘longer-term’ view. Besides focusing on recovering from the crises and maintaining organizational sustainability, PAOs and the profession are turning to reimagining what the future looks like.
Two predominant thrusts arose when PAOs were asked to divulge the top areas they felt required focus going forward to develop the profession. These were:
- The profession needs to remain relevant; and
- The profession must position itself, especially at the forefront of relevant global developments.
Diving deeper into what this means, namely what should the profession do to remain relevant and how should it define itself, four (4) areas of focus emerged:
a) Development of ‘future’ skills and competencies – CAPA members agreed that the development of ‘future’ skills and competencies will be necessary as the role and definition of the accountant evolves.
No longer record-keepers or assurers of historical data, the accountant is now a business partner, a corporate story-teller, the frontliner for economic recovery and assurer of knowledge. These are just some examples of the new definitions of accountants that have been mooted.
It is anticipated that to be able to meet the expectations and transition to these new roles, the accountants will need to either hone existing or develop new skills and competencies. These include an integrated mindset, analytical and critical thinking, complex problem solving and good communication skills. Not surprisingly, some of these were listed as top skills rising to prominence leading towards 2025 by the World Economic Forum3.
b) Development of further technical skills, including understanding non-financial information – A deeper understanding of emerging topics such as ESG4 data, sustainability metrics and climate-change disclosures is required, whether to report or provide assurance on. Many CAPA members agreed that greater emphasis needs to be given to the role accountants play, or will play, that will have societal impact including supporting the achievement of the United Nations’ SDGs5.
Further, changing market needs coupled with developments in emerging industries have also given rise to the need for further enhancements of the accountants’ skills.
c) Review of education programs and licensure models – CAPA members pointed out that it was absolutely critical to change and/or adapt education programs or licensure models to ensure that the accountant is relevant at present and is also future-fit.
For example, CAPA member AICPA6, in conjunction with NASBA7, recently announced a new approach to CPA licensure which adopts a ‘core-plus-discipline’ approach requiring candidates to demonstrate proficiency in the core areas of accounting, auditing and tax, together with an increased emphasis on technology, plus skills in one of three other disciplines. PAOs in Australia, Bangladesh and Mongolia have also recently revised their professional accounting programs, and AAT8 UK is also launching a newly revised accounting technicians program.
d) Raising the influence and profile of the profession – The view that the accountancy profession needs to position itself at the forefront of current major developments in the world strongly resonated at the member forum.
It was opined that the profession can play a role, but it is not a given role, and hence there was a need to identify the unique value proposition or differentiator that the accountancy profession can bring to global developments and policies. Areas where it was felt that the profession can appropriately position itself at the forefront included supporting the achievement of sustainable development and on harnessing technology to further value-add.
In some jurisdictions, the awareness and value placed on the profession requires further visibility and strengthening, perhaps reflecting historical legacy including restrictions placed on advertising, publicity and solicitation of work. In others, the loss of trust and confidence arising from some well-known corporate failures, continues to resound and the profession must respond.
This leads to the vital issue of ‘succession’. The profession has lost its pull in some jurisdictions. Not surprising therefore, that some PAOs have reported that attracting talent and developing the next generation, will need greater emphasis.
It is therefore up to the accountancy profession to correct any misconceptions and shed light as to what its role is now and going forward. It is for the profession to play a more predictive and proactive role and evolve to what is required. This may include taking the lead to measure, account, report, analyze and assure both financial and non-financial information; assuming roles where the profession already possess the required competencies and skillsets; and bringing it all together, ‘connecting the dots’ and helping it all to make sense for all stakeholders.
It is clear that the accountancy profession cannot sit back and merely react to the rapid changes that are taking place. However, the profession cannot be everything to everybody. It needs to have a laser focus on what it is best suited to do, undertaking the roles where it will make a difference, thus cementing its relevance in the 21st century. Perhaps a redefinition of the accountant is in order.
 The Accountancy Profession in the New Normal
 COVID-19 impacts – Challenges facing the profession and professional accountancy organisations, July 2020
 Future of Jobs Report 2020
 Environmental, Social and Governance
 Sustainable Development Goals
 American Institute of Certified Public Accountants
 National Association of State Boards of Accountancy
 Association of Accounting Technicians
This article was first published on the IFAC Knowledge Gateway on 9 September 2021.
To access the article on Gateway, please refer here.