With the ever-evolving technology, business, and customer needs, the accounting and finance industry faces new challenges every day on how to adapt and grow with the larger economy. And for 2019, these factors will continue to affect the way accountants deal with their profession.
The Effects of Blockchain
Accountants have been concerned that blockchain will automate their jobs, taking away the need for a human touch. Fortunately, the technology is young and not yet stable, so companies still need people to maintain it and take care of daily accounting needs.
While the need for humans in accountancy is unquestionable now, blockchain will still affect the profession with its introduction in supply chain management. Blockchain is already being used in some stores to transport food and other products, mainly because customers now prefer to know the true source of what they buy. As a result, blockchain is expected to grow its presence in the supply chain in the next five years.
Shifts in the Who and Where of Accounting
Accounting, like other professions, has been affected by automation and artificial intelligence. Technology hasn't affected skilled and licensed roles, but it has begun eliminating the need for low-skilled and task-based positions. But the good thing is skilled accountants would be in demand as the talent base runs low. There's a forecast of more than 140,000 new accounting and auditing jobs by 2026 even if the industry is slowly shifting to automation.
Many accountants are also retiring, and as they leave, there aren't enough new accountants to fill their void. Firms will have to compete to fill those positions by compensating professionals well. That competition will change the way work is done as well. Companies will offer their accountants the opportunity to work remotely, which will increase the need to move information to the Cloud with Cloud ERP. It will also increase the need for more technology employees to maintain security on the Cloud.
Leaders Aren't Immune
Leadership positions will see changes as the speed of accounting is changing. CFOs and controllers have to be heavily involved in regulations, compliance, and reporting. They have to complete reports faster as the business continues to move at a higher rate. As accounting requires precision, it will be challenging for accounting departments and their leaders to keep the speedy pace.
Controllers and CFOs will move from their roles in leadership and into the customer service space. Controllers will take on more risk-management roles, and CFOs will work more closely with CEOs in operations and strategy. These positions will become more visible in the company as they move out of their personal offices to engage with department employees.
New Compliance Standards Will Engage Investors
Changing standards in 2018 have required public companies to use dual reporting. As 2018 ended, private companies also had to work on adopting and complying with Accounting Standards Codification (ASC) 606. Despite the changes, investors haven't paid attention to the new reporting requirements. But the next months will be the best time for them to start paying attention because restated revenue for companies will likely be lower than what they've seen in previous reports.
Another change that should also get the attention of investors is the ASC 842 lease accounting standard. This will push the adoption of Cloud ERP by affected companies. ASC 842's number of leases and embedded leases make it complex, so firms must have a strategy in place for compliance and the adoption of Cloud ERP.
To be compliant with these new regulations, companies will have to become more transparent in terms of accounting. Businesses will need to craft new tools for protocol, tracking, and measuring, allowing accounting and finance professionals to manage new rules and requirements more efficiently.
The Big Four and the Independent Audit
Recently, there have been questions about whether The Big Four is truly keeping their audit independent. Because of this, more critical discussions are expected to open up regarding audit firms' relationships with clients and if it's really affecting the relevance of the auditing. This is also seen to impact the industry as relationships between accountants/auditors and their clients will evolve.
How ICS Can Help
Infinity Consulting Solutions (ICS) continues to monitor changes in industries like accounting and finance. We continue to help companies fill their open positions with highly qualified, experienced candidates. Turn to us to match the best with the best. Get started by clicking the link below!