Professional accountants take pride in their work, and a number of significant trends indicate that the future should continue to be bright for those whose careers are already in progress as well as for aspiring accountants who are just beginning their studies.
These trends range from the rise of data and spread of automation, to the increasing acceptance of the importance of intangible assets and non-financial capital. They include growing recognition of the link between innovation and diverse, inclusive workforces, as well as the changing nature of the workforce itself. The workforce shifts include many people having longer working lives and retiring later. Meanwhile, younger generations entering employment have changing aspirations and perspectives. Digital natives (those born after 1997) not only see mobile devices as the norm and embrace social media, but also, research suggests, seek meaning and purpose in their personal and professional lives.
Scrutiny, integrity, rigour, ethics, accountability – the vital qualities of professional accountants are what make the world go around. Thinking about the purpose of the profession, there is one dominating concern for all at the moment that is highly relevant: never before have professional accountants’ unique skills been so needed to support business and the global economy. They are currently key advisers to businesses reacting to the effects of COVID-19 (coronavirus). Can you imagine a world without them?
Take our imaginary client. Mia has long wanted to start her own business and now has an idea that could make her fortune. She turns to her accountant for advice on setting up the company, finding investment, getting the right invoicing system in place, and making sure the books balance.
One year on and the business is going well, so Mia takes on staff. Her accountant advises on payroll, and ensures the right amounts are paid at the right time, including tax contributions. The business continues to grow into its third year, and Mia is developing more products and services. Her accountant advises on research and development tax reliefs. And as she is now also working internationally, the accountant helps ensure she complies with all import and export requirements.
A few years on with a now very successful business, Mia’s backers are looking to realise their investment. The accountant advises on the options: trade sale, flotation, sale to other investors. At the same time, Mia is concerned about the impact her business is having on the world around her. The accountant evaluates her non-financial position, advising on environmental, social and governance issues. When in time Mia looks to stand back from the business, her accountant will be there to advise on the best way forward.
Imagine capital markets without finance professionals. Mia’s investors rely on company accounts when assessing where to invest. These accounts need to be accurate, to give a true and fair view of the financial state of the company. Who else apart from accountants would be qualified to prepare these accounts, abiding by a set of principles and standards that ensure they provide a meaningful picture of financial health?
And, of course, ‘external accountants’, or auditors, further mitigate the reporting risk. Mia and her investors value an independent set of accountant eyes, which add to the checks and balances. Imagine a world without auditors, those specialist accountants professionally trained to provide that independent layer of financial scrutiny.
Without such scrutiny, the capital markets, vital for business investment, would cease to work in any meaningful way. They would become Wild West frontier towns where the only rule is that there are no rules. An investor might get lucky and strike gold, but they would more likely return home empty-handed.
But it is not just Mia’s business and her investors that benefit from accountants. Imagine how government spending would be controlled without accountants. Who would be able to say how taxes paid by Mia and her company were being spent? For that matter, who would be able to say how much the government has raised in the first place through tax or bonds?
This is as true at a local level as at a national one – without professional accountants, there would be no checks and balances to counter political whims. Whether providing funds for schools, repairing potholes or building the infrastructure that allows businesses like Mia’s to flourish, local government projects could run out of control without the financial discipline provided by the accountancy profession.
Tax collection itself relies on accountants, in finance ministries and revenue collection agencies. Tax policy requires input from tax accountants to ensure it will work and achieve the desired outcomes. And if the current tax code appears complicated at the moment, imagine what it would be like without accountants to interpret it.
And if the worst happens and Mia falls victim to a scam, what then? How can fraud be fought effectively without forensic accountants? Following the money is a key accounting skill – illegitimate bank transactions, money laundering and tax evasion can all be identified by accountants.
Fraud’s bedfellow is corruption. Whether that involves bribing directors to secure a lucrative contract, government officials to influence public policy or customs officers to look the other way, at the forefront of the anti-corruption effort is the accountant. Imagine who else would investigate when something does not look like it adds up.
The skills needed to balance the books can also be put to good use elsewhere – anywhere there is the need for measurement and evaluation. Accountants have long been in the business of measuring environmental impact, and will continue to perform an essential role as governments and industry grapple with climate change.
If something cannot be measured, then it does not get changed. Professional accountants have the skills not only to measure the non-financial impact of economic activity, but also to guide individuals, businesses and governments towards making better decisions. They can advise on governance structures, social and environmental impact, assess risk and ensure that all stakeholder concerns are addressed.
In short, accountants underpin global sustainability. Mia’s world would be a very different place without you.
Philip Smith, journalist