Tomorrow’s companies will have three main questions for their Professional Accountants: what will happen, what needs to happen, and how can we make the second outcome happen? “To answer them, practitioners must acquire competence across three domains - business expertise, soft skills, and a working knowledge of 4th Industrial Revolution technologies,” says Professor Rashied Small, previous Education, Training and Membership (ETM) Executive who has recently been appointed as the South African Institute of Professional Accountants (SAIPA) Thought Leadership Executive.
 
Data science
Above all, a grasp of data science is essential. Data scientists apply statistical algorithms to selected company data to solve given business problems. Automating this process for on-demand use is the basis for artificial intelligence (AI). Professional Accountants must understand how such solutions are developed. This will empower them to collaborate with data scientists to achieve meaningful results for their clients or employers.
 
Advanced statistics
Statistics is a major component of data science and the only way to accurately predict the future. Accountants who wish to remain relevant must understand how to apply algorithms to data to predict the probability of events occurring and discover the best strategic choices.
 
Data visualisation
Without appropriate graphical representation, complex analytical results may seem meaningless to a less technical audience. It falls to the Professional Accountant to close the gap between analysis and presentation by learning the craft of data visualisation.
 
Business acumen
A requirement of data science is domain-specific expertise. The same is true for Professional Accountants and will become their main competitive advantage in the near future. As trusted business advisors, they must attain a deep understanding of their client’s or employer’s business and the forces that impact its success. It follows that specialising in specific industry niches and striving for mastery of them will win the astute accountant more trust and therefore more business in those spheres.
 
Soft skills
Of all the soft skills, leadership will be the most important. Business advisors are influencers who can convincingly pitch strategy options, overcome adversity and win over dissenters. Accountants should therefore seek out opportunities to study and apply leadership in their duties. In addition, they should learn interpersonal competencies like reporting, teamwork, emotional intelligence, communication, conflict resolution, public speaking, and more.
 
Continuing professional development
Whether it is 4IR or any other changes in the business arena, Professional Accountants must devote themselves to lifelong learning. Apart from certified online courses and CPD events, many YouTube videos are available to explain these and other topics at various levels of technical complexity for free.
 
“Continuous professional development is no longer restricted to the Profession itself and may take us outside our comfort zone. But if we wish to remain of value to our clients, we must be willing to expand our skill sets to satisfy their evolving demands,” says Professor Small.

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

As traditional accounting functions become automated, accountants will focus more on business advisory services. The South African Institute of Professional Accountants (SAIPA) has identified critical thinking as one of the most important skills future-ready Professional Accountants must possess.

Says the Institute’s Professor Rashied Small, Executive: Education and Training: “Although they already apply critical thinking in their work, practitioners must upgrade this competency to cope with the high-level strategic problems they will face in the near future”.

Award-winning research
Dr Alet Terblanche of UNISA, whose PhD thesis was one of the winning papers in SAIPA’s 2019 Accounting and Tax Thesis Competition, has developed a conceptual framework specifically to facilitate teaching critical thinking.

Titled Developing Critical Thinking in Auditing Students Through Technology-based Educational Interventions: a Conceptual Framework, the study provides a number of important insights for accounting educators and their students. Her proposed framework can be applied in schools, universities or any professional training environment.

According to Terblanche, accounting education still focuses largely on delivering technical knowledge. “Although technical competence still remains relevant, much more emphasis needs to be placed on the skills required to meet the needs of the 21st century workforce, which include critical thinking,” she writes.

What is critical thinking?
Terblanche describes critical thinking as a higher-order capability that is supported by specific cognitive skills and a well-defined set of dispositions, that is, habitual thought processes.

The cognitive skills comprise the abilities to analyse and interpret data, make appropriate inferences from it, evaluate its meaning, effectively explain its implications, and self-regulate personal biases and assumptions. The dispositions are inclinations towards seeking truth, open-mindedness, inquisitiveness, thinking systematically, having confidence in one’s own reasoning abilities, and judging matters maturely. Each of these qualities can be fostered by setting up the right learning environment.

Teaching critical thinking
Terblanche’s work identifies constructivism as the optimal approach for teaching critical thinking. This learning theory favours students actively solving problems over rote learning. The main learning tools are case studies, problem-based learning and simulations of real-world problems.

SAIPA’s own Project Achiever programme, designed by Professor Small, implements a constructivism-style model. The course prepares participants for the Institute’s Professional Evaluation (PE), an entrance exam all prospective members must pass before being admitted and awarded the designation of Professional Accountant (SA).
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“Apart from the ability to apply their previous learnings to real-world scenarios, we strive to impart vital soft skills to attendees, including critical thinking, in an interactive environment,” says Professor Small. He attributes this focus to the fact that Professional Evaluation results and top achiever spots are typically dominated by Project Achiever graduates.
     
The importance of research
In addition, the Institute is busy implementing a continuous professional development (CPD) strategy that gives greater weight to enhance soft skills, like critical thinking.
 
“As we reengineer the Institute’s training programmes to prepare our members for an advisory-focused future, good research will be vital in informing our tactics,” says Professor Small. “It is, for this reason, we awarded Dr Terblanche’s outstanding work and will continue to support research in the accounting and tax domains.”

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

With the country facing another potential downgrade, more South African companies need to embrace integrated reporting to demonstrate their value to existing and potential investors. This is according to Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accountants (SAIPA). "Integrated reporting offers assurance to investors that a company is being governed with integrity and foresight, and has control over its future prospects," she says.

Moody's, the only rating agency that has not dropped the nation into junk status, will review its credit ranking in November. However, observers are not optimistic about its chances of maintaining its current standing.

South Africa ahead in integrated reporting
According to the International Integrated Reporting Council (IIRC), 21 countries accounted for 85% of those using integrated reporting. Of these, South Africa and Japan are the top two reporters, making up 43% of total reports. This was revealed in the Council’s recent study of 2017 submissions, commissioned by the French Autorité des Normes Comptables (ANC). However, the same report found that more developed countries are lagging in adoption, with only 29 US companies doing integrated reporting as of 2019. The IIRC is chaired by Professor Mervyn King, Chairman of the King Committee on Corporate Governance.

What is integrated reporting?
Over time, the requirements of corporate reporting have evolved to encompass a number of elements: financial statements, management commentary, sustainability, and governance and remuneration. 

Even today, much of the work done to compile these reports are isolated to the concerns themselves, resulting in duplication of effort and lack of cross-reference between them. The result is complexity in the final output, making it difficult for consumers to clearly determine an organisation's position.

Integrated reporting strives to consolidate the different activities, streamline the process, and promote collaboration on cross-cutting concerns. Its goal is to deliver a concise, standalone report that offers clarity and certainty to its users on a business's past performance, current operations, and future prospects. Of course, it must also assure them that whatever the enterprise's intentions, it will proceed with integrity and due concern for the public interest.

Investment opportunity
Integrated reporting provides South African companies with a vital opportunity to convince investors of their worth. First, they can highlight how, in the past, they were able to maintain their sustainability, even during difficult periods of low economic activity. Second, they can highlight critical parts of their strategy from which an investor may infer that the business has taken every precaution to cement its sustainability, thereby promoting confidence in its leaders. Third, they can establish the viability of future endeavours, indicating a positive long-term outlook for investment. Last, they can emphasise strong ethical governance and their support for their community, the environment and the wealth they bring to the nation as a whole.

Competing for investment
In a tight economy, both foreign investors and local investors, like insurance companies and pension funds, will become more sensitive to risk and more selective about their investment choices. “Organisations who commit themselves to integrated reporting, suggesting better governance of their business, will be the ones that win funding,” says Ngwenya.

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

The media expounds daily on how accountants will become obsolete in the Fourth Industrial Revolution (4IR). Their work, it says, will be taken over by robotic process automation (RPA), or software bots for short, and their analytical functions will be assumed by artificial intelligence (AI).
 
“In fact, 4IR could be the ‘extinction event’ the Profession has been hoping for,” says Shahied Daniels, Chief Executive of the South African Institute of Professional Accountants.
 
Adapt or die
Both businesses and Professional Accountants are constantly exposed to the “stick” argument, that either practitioners find ways to add more value to their services or become redundant in the face of emerging technologies. According to Daniels, there’s a strong “carrot” side to the story.
 
“For too long, highly trained accountants have been held back from realising their true potential as trusted business advisors by menial data administration and laborious number crunching,” he says. “Rapid advances in technology will take the pain out of accounting and free the practitioner to focus on service delivery excellence and diversifying their offerings.”
 
Less data capture
Much of an accountant’s work is administrative in nature and is sometimes considered to be nothing more than a necessary evil that cannot be avoided. But RPA applications have become affordable enough to perform traditional data entry. Further, AI and data analytics systems can assist with the heavy number crunching on which the practitioner’s talents are often wasted.
 
Less physical measuring
It’s not unusual for an accountant to, for example, fly out to an oil rig and spend a week personally checking output levels. They are so often called on to give assurance on non-financial information that a dedicated standard exists to regulate such activities. Now, companies can attach cheap sensors to the appropriate equipment and have the desired information transmitted over the Internet of Things (IoT) directly to their management information system (MIS). This allows AI-driven data analytics to not only validate the measures but also predict future performance.
 
Accelerated delivery
An important aspect of RPA and AI is the speed with which work can be completed. Decision-making is time sensitive but the required administration and reconciliation of accounts, and subsequent compilation of management reports, can sometimes take weeks. New technologies can reduce decision-making delays and allow leaders to respond to business conditions in near real time. It also empowers accountants to focus on outputs and their impact rather than the truth and accuracy of inputs, which is assured by the business system itself.
 
A shock to the system
Accountants who find themselves relieved of their traditional duties may feel like a fifth wheel in a system they helped build. Daniels believes it is an ideal time for them to reflect on their true purpose. “The Professional Accountant has been forced by systemic inadequacies to operate more at the points of input and processing,” he says. “They must now embrace a paradigm shift and discover the full spectrum of opportunities that exist beyond the point of output.”
 
SAIPA, in collaboration with its parent body, the International Federation of Accountants (IFAC), of which it is a voting member, continues to work closely with its members to prepare them for 4IR through expert support, future-ready competency frameworks and technology-aware accounting standards.
 
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