TAKEAWAYS
Artificial intelligence (AI) is not the only emerging technology that is disrupting accountancy education and practice. Other emerging technologies are also impacting different aspects of the accountancy profession and industry. How then should we deal with them?
Chat Generative Pre-trained Transformer (ChatGPT) took the world by storm when it was released on 30 November 2022. It is a tool for conversation and provision of information for an enquirer. Immediately, the academic world was concerned about students using ChatGPT to complete their assignments; there was also worry that ChatGPT could spell the demise of educators.
While there is no doubt that ChatGPT will significantly change the way education and work will be conducted, this is just the beginning of the technological revolution for accountancy. For accountancy schools, the key challenges include:
The answers to the above questions, from the accountancy schools, will determine their continuing relevance.
There are plenty of discussions on the disruptions caused by various technologies on the accountancy and finance profession. The World Economic Forum (WEF) surveyed companies and listed the technologies that will likely be adopted by the financial services sector by 2025 (Figure 1).
Figure 1 Technologies likely to be adopted by companies in the financial sector by 2025
The following will focus on the “(ABC)2” of emerging technologies that disrupt accountancy education and practice. (ABC)2 stands for artificial intelligence, big data, cloud computing; automation (robotic processing), blockchain, and cybersecurity.
Artificial intelligence
A simplistic form of AI, “expert systems” was introduced in the audit profession in the 1980s but the progress was hampered by limitations in computer hardware. However, today, AI can be taught and trained to mimic human behaviour and human decision-making. AI learns from extensive data of similar past behaviours, enabling it to “grow” like a child. Some postulate that it is possible to create a “firm-wide, fully autonomous, self-aware and self-improving accounting system” where the AI “manages structured and unstructured data and regulations from various sources” with human-like cognitive abilities. Figure 2 demonstrates the use of ChatGPT and Bard in providing advice in an audit setting.
Figure 2
Generative AI tools, such as ChatGPT and Bard, will only become more intelligent over time, given the amount of data and learning.
Big data/Data analytics
Big data are characterised by four Vs, namely high volume, high velocity, high variety, and high veracity. Accountancy professionals are prime movers of financial information but their roles are redefined with big data. Accountants need to use appropriate data analytics on the big data to perform data visualisation, verification, fact finding and data-driven decision-making. This is to allow accountants to tell their data-driven story more convincingly. This enhances the role of accountants as key gatekeepers and experts in data-driven decision-making.
Cloud computing
The COVID-19 pandemic has allowed cloud-based solutions and services to demonstrate their usefulness. The role of accountancy professionals in analytics, compliance assessment and reporting is substantially carried out in the cloud, away from physical presence in the office. Accountancy professionals need to be well versed in cloud computing skills and knowledge to navigate and perform their roles in this new environment. In addition, they need to be cognisant of the security challenges in a cloud setting.
Automation (robotic processing which includes text, image and voice processing)
Accountancy practices that are most susceptible to productivity gains are those that are repetitive and adhere to well-defined rules-based algorithms. Automation or robotic processing will be ideal, as repetitive, tedious and labour-intensive works are replaced by reliable and highly efficient robotic processing, much like an automated manufacturing line.
Blockchain
Bookkeeping has been traditionally conducted through hardcopy documents to provide the needed audit trail for updating the accounting ledger. Blockchain can be a game changer as it becomes the immutable digital version of the traditional ledger. The use of blockchain can disrupt the traditional recording and processing of financial information. Cai C.W. (2021), in an article published in Accounting and Finance, advocates a triple-entry bookkeeping system using blockchain. The double-entry bookkeeping is augmented with a third entry in blockchain for a firm. The blockchain entry has the advantage that it can be verified efficiently and effectively by auditors. This is notwithstanding the possibility of smart contracts using blockchain.
Cybersecurity
The use of cloud computing will magnify a firm’s cybersecurity risk because huge amounts of information can be accessed remotely. This gives rise to concentration risk where all the “information eggs” are in one basket. Accountants must manage this cybersecurity risk to protect their works from being corrupted or exploited by sinister elements. In addition, cybersecurity can also become a domain where accountants can thrive in, by providing specialised assurance or consultancy services.
ACCOUNTANCY EDUCATION EVOLUTION
Figure 3 summarises the evolution of accountancy education. In the first instance, the Pillar Approach is where the technical accounting and business domains are taught in a deep manner. With the passage of time, accountancy students, as financial gatekeepers, are required to have soft (essential) skills which allow them to better communicate their accountancy services.
The T-Shape Approach becomes the next education paradigm. In this Industry 4.0 world, accountancy students need to have a good foundation in information technology or digital skills. This results in the I-Shape Approach with information technology and digital skills as the foundation.
Figure 3 Accountancy education evolution
In surveying the five autonomous universities (AUs) in Singapore with accountancy programmes1, it was found that these emerging technologies are already in their curricula, especially data analytics (Figure 4).
Figure 4 Emerging technologies offered by local AU accountancy schools
The accountancy schools have incorporated these technologies in their curricula to make their graduates more effective and employable to the industry. Data analytics is already deeply entrenched but not the other five technologies.
Ideally, these technologies should be taught by accounting instructors who straddle between accounting and technology, failing which the technologies should be taught by a combination of accounting and technology instructors. The hybrid approach (Figure 5) is recommended, where there is at least one standalone course in emerging technologies and thereafter, the technologies are incorporated into the accounting courses.
Figure 5 A recommended hybrid approach for accountancy education
Although the approach sounds simple, in an ASEAN Federation of Accountants sponsored study2, a significant percentage of accountancy schools in ASEAN which responded to the survey had opined that the key barrier is the shortage of experts in these technologies (Figure 6).
Figure 6 Lack of expertise in accountancy schools to teach emerging technologies
With these disruptions, how can the accountancy schools, professionals and professional bodies in accountancy work together to turn the challenges into opportunities? Here are three suggestions:
a. Accountancy schools must work closely with the accountancy professionals to provide inputs on technology needs, and bring their expertise into the classroom to motivate the students to acquire the emerging technologies.
b. Accountancy schools must work closely with the accountancy professionals to curate business cases and data sets, and share technology tools to provide realistic learning scenarios for the students.
c. Professional bodies in accountancy must work with the accountancy schools and professionals to formulate a technology roadmap for the accountancy sector, and then incentivise the stakeholders to actualise it.
In Singapore, ISCA has begun work on advancing accountancy education to meet these technological needs. This year, the Institute commissioned an extensive study under the ISCA Research Fund to bridge accountancy education with new needs, including technological advancements.
The accountancy profession in Singapore enjoys a very enviable status in ASEAN as well as globally. The accountancy schools are well positioned to be leaders in accountancy education, and they can cement the coveted position by continuously reinventing accountancy education in the presence of disruptions, to re-learn their technological ABCs.
Ho Yew Kee is Professor of Accounting, and Cluster Director, Business, Communication & Design, Singapore Institute of Technology.
1 Nanyang Technological University, National University of Singapore, Singapore Institute of Technology, Singapore Management University, Singapore University of Social Sciences
2 ASEAN Federation of Accountants. (2023). Technology Adoption by the Accountancy Profession in ASEAN Countries. Working manuscript.
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