The world is changing fast and to keep up you need local knowledge with global context.
The number of students interested in accounting and auditing has been falling worldwide. A member of the Public Company Accounting Oversight Board, Christina Ho, recently called the shortage a “crisis”. This has also been the case in South Africa where the profession is facing the same challenge. The CEO of the South African Institute of Professional Accountants (SAIPA), Shahied Daniels, told BizNews that a reason for the decline is digital transformation and the lack of skills thereof. He reveals the professional accountancy organisation (PAO) is upskilling its members with digital tools to ride the Fourth Industrial Revolution wave, sustainably and ethically. According to him, the days of bean counters as well as the title chief financial officer, are over, as they have evolved to much more. The era of the chief value officer and Professional Accountant (SA)– who plays a much bigger role in business and society, and contributes to the sustainability of the economy of the country – has arrived. – Linda van Tilburg
Excerpts from the interview with SAIPA CEO Shahied Daniels
Fewer entrants into accountancy profession – a global problem
Several issues cause this, which I think are predominant. I am currently the chairman of the Edinburgh Group, which consists of SME practitioners in the global accountancy landscape. It’s a global organisation, a lobbying body, advocacy, for those who are not members of the big firms, so medium-tier firms and small and medium practices (SMP). On our agenda is the recruitment and retention of talent within the profession. I had a colleague in Portugal who expressed concerns, and a colleague in Australia said exactly the same. So, it’s a worldwide challenge.
There is a change in business linked to digital transformation. In January 2020, the local MEC of Education tweeted after the matric exams and he said, accounting is a dying subject at schools. We [SAIPA] responded to that. The accountancy profession is competing against other professions in the digital wave. There is also a perception that accounting is a dying career and it’s not. A lot of the activities or functions are absorbed by technology, but you still need professional scepticism, professional judgement, to give opinions and create value in the business. If you’re not trained in that way, that is going to be a challenge for us. But yes, we accept technology is affecting the profession. So, it is a concern within the profession and, more specifically, in the SMP sector of the profession.
Maths lit does not prepare you for an accounting career
I believe a challenge in South Africa is that there is a lack of mathematical passion to teach, and learn. There is no passion for teaching maths because right at the beginning the learners were told maths is a difficult subject so that barrier is already up. Maths is the foundation and at SAIPA, we have held the National Accounting and Maths Olympiad for over 12 years because it goes glove in hand. We offer that to the schools and say here is a practical and theoretical Olympiad for you to gauge how your learners are positioning themselves for the profession going forward.
Bean counters belong in a museum, rogue accountants tarnished the profession
The days of a professional accountant in a dark suit, grey shoes, with no humour, the number cruncher, bean counter, which we are often perceived , are long gone. That’s history. The Professional Accountant (SA) has a much bigger role to play in business and in society; to contribute to the sustainability of our economy. That is one aspect. In terms of corruption, it is greed that drives this. Many have let their guard down because of greed; sadly, there are a few rogue accountants in the profession who are tarnishing the image of the profession. If you look at what happened in 2003, at the Enrons and the World Coms and Parmalats. Locally in South Africa, the Masterbonds and Leisurenet. These things happened all the time and it is because people let their guard down. So, we have to comply with the code of conduct; however, to some the proverbial carrot poses too much of a temptation. It is what Professor Wiseman Nkulu questioned: “Are we enablers or are we victims?” I think some of us are enablers in this corruption that we contribute towards self interest.
The second issue is the multidisciplinary firms, where you have assurance and/or audit consultancy which is audits on the one side and they offer all sorts of accounting, advisory or other services. There are different schools of thought on this. Are multidisciplinary firms still appropriate within the profession? We need to get to the bottom of how we hold ourselves accountable in the profession because of how a few people have tarnished the image of this noble profession.
Upskilling and ‘ethics rule’ to ride the Fourth Industrial Revolution wave
Changes happen at such a fast pace, we need to be at the cutting edge to make sure our current members and the new entrants to the market remain relevant in terms of how we train and how we recapacitate members. I don’t like the word unlearning because once you learn something, you know it. I call it the reskilling and upskilling as we have totally upgraded and revamped our competency framework.
What is also important is that we uphold our code of conduct. Our code of conduct and ethical behaviour are of crucial importance, not only for professional accountants, but for human society and all businesses. It does not matter which profession you operate in; if we don’t behave in an ethical manner or hold ourselves to a code of conduct, we may find ourselves in this corrupt environment, contributing to it or enabling this corruption. .
How SAIPA is transforming digitally and taking members with them on the road to sustainability
Our role has evolved to more than just debits and credits, income statements and balance sheets. Sustainability reporting is important, but it is not limited to climate change. If you look at the SME sector, predominantly in developing countries, the engine room of their economies is the SME sector.
We use tools and initiatives such as artificial intelligence, data analytics and robotics, which go hand in glove, to become sustainable. We look at all of these things. We’ve developed a competency framework and are busy with our curriculum design to position ourselves at the cutting edge to be relevant, to make a difference within the profession to contribute to clients, the business and the sustainability of the economy in the jurisdictions within which we serve.
We are currently not using any software for our infrastructure. We have developed and customised our own. So, we are using a platform called Microsoft.Net and are developing the system. We call it MySAIPA. We developed it from scratch as we evolved, with our members and the profession in mind.
The International Federation of Accountants (IFAC) has appointed a firm in the UK to do an assessment of all the professional accountancy bodies across the world to see how future ready they are and how have they transformed into a digital environment. We were one of the first to be assessed and I’m grateful to say we ranked quite high; we are about 80% digitally transformed in comparison to several First World countries’ professional bodies. But it doesn’t stop there. We are continuously evolving and there are currently two major software packages in the market that we continuously benchmark ourselves against.
We have decided to develop a digital strategy for our members encouraging them to be future ready. And the simplest are cloud computing and connectivity to start. So, we partner with major companies here in South Africa and just last month, we launched a Digital Hub. Within the Digital Hub are a number of products. One of them is the Digi-Kit. It is connectivity and cloud computing. We have Cyber-Kit, Hardware-Kit and the Practice-Kit because as you know, we are involved in this digital era and there is a risk that comes with it. We prepare our members and partner with leading companies to offer these products to our members at relatively low cost as the bulk of our members are in the SMP sector. We do have members in corporate South Africa, academia and the public sector, but the majority of our members fall in the SMP sector. We created this relationship or ventured into this relationship where we provide services for all our members so we remain at the forefront of the challenges and the demands of the profession.
Bye-bye CFO… hello chief value officer (CVO)
Mervyn King, a highly regarded leader within the corporate governance fraternity said accountants can save the planet. What does that mean? If you drill deeper, the role that the Professional Accountant (SA) is playing and the contribution that accountants make to all other sectors of business, and life in general, is that we can make a difference. We are moving away from the CFO, to be a chief value officer. If you work in a corporate company, what value are you contributing to the company you serve? Sometimes we focus too much on the reporting side of the profession instead of the value-creation side and that is what we need to embrace… Professional Accountants (SA) must do different things, and this is where value creation comes in, to make a difference and remain relevant, to be able to meet the challenges and the demands not only of the profession, but of business and life in general. To make a contribution.
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