The accounting profession has been continuously evolving. After the global financial crisis in 2008, businesses across the globe have taken a step back to evaluate their financial strategies and accounting practices. More recently, technological advancements and the increasing number of millennial accounting professionals drive disruptions in terms of how businesses operate and how their workforce is structured.
In an article published on the International Federation of Accountants website, Muhammad Azizul Islam, a CPA and associate professor from the Queensland University of Technology in Brisbane, Australia, shared three major developments that are shaping the accounting industry.
Understanding these trends will be necessary in order for you to future-proof your accounting firm. Below, we list the three items discussed by Mr. Islam and add a few notes of our own.
1. The Rise of Smart Technologies and Sophisticated Accounting Systems
The trend toward the adoption of smart software systems and cloud computing will promote increased collaboration, greater efficiency and transparency, and better relationships with stakeholders and the community. Furthermore, social media will continue to produce greater amounts of data that will be useful to businesses across all industries. In this regard, hiring digital natives such as millennials to join your workforce will prove to be beneficial to any business.
2. Opportunities Brought by Continued Globalization
Despite recent political events, globalization has yet to show signs of slowing down. As such, the decades-old framework that allows for the free flow of capital from market to market will not likely abate in the coming years. Accounting and financial services from developed countries will continue to be outsourced to developing countries such as the Philippines to minimize cost and improve a firm’s efficiency. Young accounting professionals will have a significant role to play in this scheme of things.
3. Increase in Regulation
Owing to recent scandals such as money laundering, transfer pricing, and tax evasion, governments will inevitably impose more stringent regulations. The resulting tax actions will have the greatest impact on the accounting profession.
Apart from these three items, the volatile global political climate, as well as other social and environmental issues, will have a major impact on the finance and accounting profession. In the first half of 2020, we saw how the Coronavirus pandemic threw us in an unprecedented situation in which businesses had to rapidly adapt.
With the accelerating speed by which businesses operate, firms will have to learn how to adapt, harness the talent of millennial accounting professionals, and enact timely changes to survive in the coming decades. It's crucial that you provide for continuous professional development for young professionals in order to maintain an agile, reliable, and easily adaptible workforce.
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First published on 14 October 2017; Last updated on 7 July 2020