Accounting firms around the world have been forced to drastically change processes, re-examine working environments, and support businesses’ economic recovery over the past two years. John Edwards, CEO of the Institute of Financial Accountants (IFA), unveils some of the key accounting industry trends expected to shape the year ahead
Digitalisation and technology adoption
New technology is changing the way people work and influencing client expectations. This shift to digital transformation has been accelerated by the pandemic, with changes to remote working practices that are unlikely to revert to pre-pandemic conditions.
What’s more, recent systemic changes from the likes of HMRC, including the previous and pending phases of Making Tax Digital, serve to ensure the adoption of appropriate technology – making familiarity with digitalisation an essential skill in the modern accounting industry.
Those who don’t commit will undoubtedly get left behind.
ESG: A growth opportunity for auditors
The pandemic and COP26 have shown that environmental and sustainability issues are fundamental to an organisation’s survival, with them becoming increasingly accountable not just for their finances but for the sustainability of their operations.
This is not just simply to ensure compliance, but increasingly, it is driving businesses short-term and long-term prospects. Consumer demand for environmental sustainability is likely to outstrip government-mandated action, but both should, and will, drive business adoption of sustainable practices.
This offers the accounting industry a significant opportunity, as managing that sustainability requires risk assessment and reporting skills, things that they are ideally placed to provide. As sustainability efforts evolve, so too is the sector primed to innovate through offering eco-conscious services to help their clients measure the degree to which they are operating sustainably.
Environmental, social and governance (ESG) issues are also now key concerns, as well as a major attraction, for global investors, with their sights fixed on sustainability and climate change. As a major part of that criteria, businesses will be required to measure and reduce their greenhouse gas emissions. As there aren’t yet any defined standards for ESG – although there are global standards under development – this offers a widespread growth opportunity for auditors.
Digital skills gaps
Artificial intelligence (AI) will change the face of accounting operations, delivering efficiencies, reducing errors, and optimising workflows, while assisting professionals with real-time business decision making based on data-driven insights. Demand for AI-based accounting software has increased thanks to the sharp rise in digital payments, fuelled by the pandemic.