 Speaking at the 4IRSA Digital Economy Summit, held earlier this month at Gallagher Convention Centre in Johannesburg, President Cyril Ramaphosa said a host of digital-age subjects to be introduced at schools will help propel the country towards a competitive digital economy. They include data science and analytics, artificial intelligence (AI), blockchain, additive manufacturing, robotics and quantum computing.
With this focus on 4th Industrial Revolution (4IR) skills, will there be a place for Professional Accountants in tomorrow’s job market? “Without a doubt, accounting will continue to be one of the top career choices, but the roles and functions of Professional Accountants will change” says Professor Rashied Small, Executive: Education and Training at the South African Institute of Professional Accountants (SAIPA). Better economy, more accountants As more digitally astute workers enter the job market, South Africa’s position as a global contender could be greatly improved, strengthening its economy by not only providing financial information but interpreting them for economic decision-making. This trend alone will ensure the longevity of accounting. “It’s typical that, in a stronger economy, more financial transactions are raised due to increased trading – the processing will be automated, and more accountants are required to manage them for use by a range of users,” says Professor Small. This effect can be seen when comparing South Africa’s some 50,000 accountants to the UK’s 260,0000, since the latter enjoys direct trade links with the EU (at least for now). Automated accounting Won’t the work of accountants be automated to the point where they are replaced by machines? According to Professor Small, technologies like robotic process automation (RPA) and AI are not advanced enough to take over the higher functions of accounting, especially in a disruptive global economic environment. Both are geared mainly towards procedural, single-outcome tasks, like capturing supplier invoices or analysing financial statements. A different task requires the installation and training of extra RPA or AI processes to facilitate effective decision-making, governance and ethics. As tasks become more complicated and interactive, the cost of automation rises to the point where human intelligence becomes the optimal solution. “What sets human accountants apart is their ability to evaluate many complex financial scenarios simultaneously by applying integrated decision making across a wide range of associated business variables,” says Professor Small. “AI and RPA technologies do not operate at this level of sophistication – the outputs are results which will be used by accountants for decision-making across the entire organisation.” Pure maths a must Whether a pupil studies data science or accounting, pure maths is set to become the foundation of all future business. Data science is essentially about coding statistical solutions using appropriate data. A basic condition of statistics is a good understanding of calculus and algebra. So those studying digital subjects must be prepared to master pure maths. “Even accountants must learn pure maths, as they will not only interact with digital processes but also act as mediators between them and decision makers,” says Professor Small. “AI can’t explain their results; it is up to the Professional Accountant, as a business advisor, to guide corporate leaders on the effective application of that data during strategy development.” Accounting iNdaba 2019 SAIPA will address these and other effects of the 4th Industrial Revolution (4IR) at its upcoming Accounting iNdaba 2019, to be held at the Cape Town International Convention Centre from 13th to 15th August. The Institute welcomes Professional Accountants from all PAOs to register for attendance at www.saipa.co.za/accounting-indaba-2019. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants
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 “As automation and AI invade and occupy business services once exclusive to Professional Accountants, practitioners must reassess their value proposition,” says Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accountants (SAIPA).
Accountants are being advised by their professional accounting bodies (PAOs) to focus more on business advisory engagements. But what makes a good business advisor? To grasp that concept, says, Ngwenya, one must first understand the four types of accountants. The bean counter Offering only the standard accounting services, the bean counter knows where the beans are and how to count them. In other words, they are intimately familiar with their enterprise’s ledger and can perform the required financial reporting. However, they neither understand the operations behind the figures nor can their outputs provide analytical or predictive insights to help the business grow. The bean counter can be replaced with AI and automation. The bean mathematician The bean mathematician also knows the enterprise’s accounts very well. Additionally, they possess advanced reporting and analytics capabilities when it comes to counting the beans. As such, they are able to offer predictive insights and unpack financial dynamics. But because they still can’t see how their figures relate back to business operations, they can’t prescribe transformational changes. They are more concerned about compliance with standards and regulations such as tax authorities. The mathematician can be replaced with the analytical power of AI. The bean physicist The bean physicist knows where the beans come from, this is, they have an impressive grasp of how business operations affect their accounts. Unfortunately, they have only basic reporting skills and can’t project the future effects of those operations or suggest strategic optimisations. The physicist is not easily replaced with technology but is also not effective in enabling business growth or transformation. They are mainly problem solvers. The business enabler The business enabler has both a strong grasp of the business operations that produce the financials and advanced analytical and predictive capabilities. They provide data-driven insights into business growth and transformation opportunities, plus they can suggest practical operational improvements to achieve business development initiatives. They also know how to leverage technologies, like AI, predictive analytics, Cloud and more, to derive maximum value from financial and management data, creating a true competitive advantage. In addition, they know their employer's or client's organisation inside out. So they understand the constraints it faces and can expose opportunities it may be missing both internally and in its market. Most importantly, they have evolved soft skills like rapport building, communication, collaboration and emotional intelligence, empowering them to create better, inclusive solutions that have total buy-in from stakeholders. “The business enabler is involved in more than just financial management,” says Ngwenya “They’re invited to consult on risk management, business rescue, business development, IT and management information systems, and much more.” The future of accounting Professional Accountants who nurture the business enabler mindset while striving to develop the competencies of a business advisor will be in greater demand, even as technology absorbs their traditional services. Artificial intelligence can replace a lot of things but professional judgement is one skill that will hardly be replaced. Professional accountants of the future will remain relevant if they continually develop themselves, not only on routine compliance areas but sharpening their cognitive skills and business advisory skills. To find out more about the coming changes and how to address them, join SAIPA for its Accounting iNdaba 2019, to be held from 13th to 15th August at the Cape Town International Convention Centre. You can register now at www.saipa.co.za/accounting-indaba-2019. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African Institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants  Authored by: Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accountants (SAIPA) On the 18th of June, Facebook announced its plan to launch its Libra cryptocurrency in 2020. Bitcoin, the popular digital currency, has been around for over 10 years but hasn’t significantly changed how we trade. However, Facebook’s massive global user base could usher in wide-scale adoption of Blockchain, the technology behind modern cryptocurrencies. Blockchain is just one of the 4th Industrial Revolution topics being presented at SAIPA’s Accounting iNdaba 2019, to be held from 13th to 15th August at the Cape Town International Convention Centre. So it’s a good time to review the technology in layman’s terms. What problem does Blockchain solve? With physical money, each unit represents a quantity of value traded and therefore redeemable as goods and services. It’s tightly controlled to ensure its units are uniquely identified and resistant to duplication. Because it’s physical, only one person at a time can possess and spend it. Digital currency is simply a computer file that can be copied, so the same unit could be spent at the same time by different people. To prevent this, all transactions and subsequent ownership of a unit must be validated through a central third party. This incurs unnecessary fees and exposes our private data and financial history to someone else, like a bank. Blockchain tries to solve this problem. The Blockchain file A Blockchain is firstly a file on your computer that contains batches (or “blocks”) of transactions. Each block is linked to the previous one by a unique digital serial number computed from the contents of both blocks and a bit of cryptographic magic. This is the "chain". Because the serial number is based on the previous block, if past transactions were changed, the serial numbers would no longer agree, signalling that tampering had occurred. Tracing the discrepancy is accomplished by checking all the serial numbers down the chain until the first mismatching block is found. This makes a Blockchain resistant to amendment. Transactions are entered and maintained through a Blockchain management program, also installed on your computer. The Blockchain network A Blockchain file becomes useful for transacting when it is shared with other parties over a network. A Blockchain network is like a social network, but instead of exchanging personal news and photos, its users exchange a digital asset, like cryptocurrency. To avoid needing a centralised database, everyone on the network gets a synchronised copy of the Blockchain file. So their file holds their transactions and everyone else's! But transactions are individually encrypted, exposing only their values to other users. Validation Each block submitted to the Blockchain is validated by any computer on the network with the most available computing power at the time. This ensures that transacting parties have proper credentials and sufficient currency to spend and that no single computer can take control of the validation process. Each computer then updates its file with the successfully validated block. That's a very basic description of Blockchain and is intentionally flawed for simplicity's sake. The benefit of Blockchain Because the network shares transactions in a self-validated and secure manner, there's no need for a middleman. Although each validator earns a nominal fee, the cost is lower than banking fees. Also, ownership of a specific unit of currency is inherently tracked by the system so there’s no danger of double spending. Although Facebook will use Blockchain, its mechanics may differ from those described above. More significantly, Libra could be the first large-scale cryptocurrency that offers a viable alternative payment platform to rival incumbents like MasterCard and Visa. SAIPA’s role Professional Accountants should have at least a basic understanding of how Blockchain and other new technologies work. As their role of trusted business advisor becomes the focus of their services and more of their clients embrace 4IR, they will encounter scenarios where these technologies are being implemented, should be implemented or should be avoided. Knowing how to approach each is important to winning a client’s confidence and adding real value to their operations. SAIPA and its parent body, IFAC, continue to prepare our Professional Accountants for this and other innovations changing the face of the Profession. We're already developing advanced standards to ensure the public interest continues to be protected even when dealing with sometimes impenetrable technologies. The theme of our Accounting iNdaba 2019 is “The Future-Ready Professional Accountant in the 4th Industrial Revolution”. The event will set the tone for our coming initiatives to equip the industry for change. Accountants from all professional bodies are welcome and can book their place at the iNdaba at www.saipa.co.za/accounting-indaba-2019. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African Institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants |
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