In our Conversations series, our CEO Mark Edmondson sits down with some of the biggest names and sharpest minds in accounting and asks them to share their insights into the state of the industry.
It’s been fascinating and informative to hear how firms at the cutting edge of the sector are adapting to the sea change we’re in the midst of in the world of accounting.
Since we began recording these interviews, there has been a few recurring topics that our guests have touched on.
To give you sense of the discussions these trend setters and thought leaders are having with each other and within their own firms, here’s our pick of the most touched-upon topics across all of our Conversations:
Technology is going to transform the world of accounting
Our first ever Conversation was with Michael Izza, Chief Executive at ICAEW, and in this interview he told Mark: “Technology is going to absolutely transform every one of our member’s lives. Now it’s going to do that in different ways and at a different pace, but it’s coming, it’s coming fast, it’s like a tsunami and you can’t avoid it.”
For Geoff Woodhouse, Partner at Moore Stephens, the latest technology was not only going to change the way accounting firms work with their clients – you can say goodbye to working “from a darkened room in a client’s office” – it’s also going to change the structure of our firms. The “pyramid structure is dead”, he told Mark, with technology enabling a much more collaborative approach to the accounting process.
Mark Babington, Deputy Director of Audit Policy of the Financial Reporting Council, explained that “the business of today – and the business of tomorrow – is different, and auditors need to demonstrate they can respond to that”. For Mark, the key to that is the technological advances currently happening in the field – particularly because it’s going to transform the auditor into a forward-looking business advisor rather than someone who simply looks in the rear-view mirror.
Finally, there’s no doubt in Gary Boomer, CEO of Boomer Consulting’s mind: “In five years we won’t recognise the CPA profession”. And for Gary, the biggest change in the industry is going to be the shift from compliance invaluable advice.
Mindset is going to be crucial to your firm’s success in the coming years
Because of the huge shift in the role the next generation of accountants and auditors are set to play in their clients’ businesses, several of our guests highlighted that firms need to adopt a completely new mindset than they had just a few years ago.
Michael Izza believes that “the profession has got a good future ahead of it”, but accountants are going to have to adapt to a role that’s more “advisory than proprietary”. He continues: “I wouldn’t underestimate how much of a transition we have to make in that time period from being preparers to being people who give insight and explanations of the incredible amounts of data that businesses of all shapes and sizes are producing today”.
The way Sue Almond of Grant Thornton International sees it: “So will accountants be doing something completely different in the future? Well quite possibly. But is that a bad thing? Not necessarily… people are doing different things, but they’re getting and giving more in the process”.
Sue goes on to explain that while “accountants probably come with a mindset sometimes of a more structured way of doing things”, they “need to get into the habit of asking “what are the key risks and how are we going to address them?”. The answer “might be different next year to what it is this year”, and accountants needs to get used to the fact that’s going to be “the new norm”.
Adam Grainger, Director of IT and Projects at Baker Tilly International, echoed a very similar message in his Conversation with Mark. While he said “not everyone’s role is going to change”, he did say: “You might not be doing the same thing for 30 years [like accountants used to]. I just don’t think that’s going to happen anymore”. Like Sue, he didn’t see this as a bad thing – in fact, he believes accountants are going to being valued for their advice more than ever.
For Gary Boomer, to succeed as an accountant in the coming years you’ll need to have the right mindset. “Not everyone is going to buy into [the new way of working], and I can tell you from experience it’s not about age”, he says. “It’s more about mindset, and some people grow up with a fixed mindset, and others have a growth mindset”.
From our Conversations, the consensus is clear: to thrive during the next age of accounting, your firm will need to fully buy into a new approach to performing their roles, from top to bottom.
Clients’ expectations are changing (and technology is the only way to keep up)
Another common thread running through our Conversations was the fact that clients are starting to want the latest technology used during their audit.
“Client expectations are changing. It’s no longer acceptable to continue to produce the same audit file you produced last year”, explains Andrew Moyser, Partner at MHA MacIntyre Hudson. “Clients are demanding [the latest] techniques, and you’ve got to start looking at this process now”.
Lisa Leighton, BHP’s Head of Audit, says that she “can categorically say that we have won several clients over the past two years because we are able to say in our pitch that we can use data analytics in our process”. This is a big change from just two years ago, she says, when “If I approached a client two years ago and said ‘I want to use data analytics on your audit’, the first question they’d have asked me would be ‘how much does that mean my audit will go up by?’”.
For Sue Almond, the market is driving the transformation of the audit, and technology like artificial intelligence and machine learning is enabling accountants to meet that demand. She asks: “If what the market needs now from an audit product is not a bunch of transaction testing, which may have been the case 50 or 100 years ago, but something that is more future-looking, then why don’t we have the conversation about what that looks like for everybody and try to reimagine what the audit might be in the 21st century environment?”.
This gives a clear insight into the fact that there’s a clear demand for the latest technology from our guests’ clients, suggesting that firms need to adapt to the next generation of accounting technology or risk being left behind while their competitors do.
How to start implementing the latest accounting technology in your firm
All of our guests are big advocates for the technological revolution in the world of accounting, and several of them shared their advice on how to get started with data analytics software in your firm.
Adam Grainger‘s advice for any firm looking to take the plunge with the latest technology is to take “baby steps”. “Get your hands dirty”, he says, recommending that you put together a small team and a structure plan around trials of next-generation accounting software such as our own.
Mark Babington advises firms to identify a low-risk opportunity they can test a new approach on to build up confidence and familiarity in a safe envirnoment. He therefore recommends firms ask “where are the areas where I can manage the risk of that transition most effectively and in doing so make the greatest contribution to audit quality?” and go from there.
Lastly, Lisa Leighton recommend that you pick a single location and start your journey into next-generation accounting software by establishing a small team of forward-thinking champions there. In her experience, the results will quickly start speaking for themselves, and other teams will soon be asking to be part of this new initiative, leading to a smooth implementation across your firm in a short time.
So, there you have it: a quick look at the key themes and deepest insights into the future of accounting from our Conversations series. You can find the full interviews in our Conversations section, and you can start your journey of implementing the latest technology in your firm by signing up to our free trial today.