News: The impact of digitization on accounting roles: Study

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The impact of digitization on accounting roles: Study

The Chief Financial Officer (CFO) will move away from being the custodian of financial reporting to focus on optimizing resources for business growth. On the other hand, machines will displace humans in two most junior finance roles.
The impact of digitization on accounting roles: Study

The share of accounting tasks done by machines to surge by 80 percent, according to the study, conducted by the Institute of Singapore Chartered Accountants (ISCA), Lee Kuan Yew Centre for Innovative Cities (LKYCIC) at the Singapore University of Technology and Design, and Ernst & Young Advisory Pte Ltd (EY). 

These tasks may be automated, consolidated or procured as a service through a managed-services provider. As such, financial data will be available on demand through self-service portals and as an output from AI. Traditional tasks such as audit, statutory and regulatory reporting and global business services will be automated and/or procured. This will raise the value-add of job tasks - secured by blockchain and monitored by RPA.

The study, entitled "Redefining the Finance Function with Job Redesign", said the Covid-19 pandemic has accelerated the pace of digital transformation. 

Within the next three to five years, there could be a wider adoption of technological enablers such as robotic process automation (RPA), artificial intelligence (AI), advanced analytics/Big Data and blockchain. 

"The rise in digitalization has resulted in machines quickly taking over the tasks traditionally performed by humans, making room for humans to focus on higher-order tasks or new ones which require new skill sets. Accountancy and finance professionals will increasingly require knowledge beyond their main domain of accountancy and finance as well as their industries," said the study.

The impact of technology on accounting jobs 

The study - which focused on both large and small companies in Singapore - referenced the Skills Framework for Accountancy, in which a total of 11 common job roles were mapped out for the finance function.

The two most junior roles - accounts executive/accounts assistant in the financial accounting (FA) track, and accounting executive in the management accounting (MA) track - will likely be diminished as much of their work scope involves repetitive, time-consuming and labour-intensive tasks that can be taken over by machines. Junior-level finance tasks are also likely to shift towards providing insights from data analytics, and to provide input to train machines.

The five mid-level roles will be transformed where certain key tasks will be displaced and redesigned as a result of technology adoption. The four most senior-level roles will face incremental changes, where they will continue to deliver outcomes with increased efficiency due to technology

The impact on mid-level roles such as finance manager, financial planning and analysis manager, and treasury manager, will be more measured.

How can accounting professionals stay relevant amid accelerated digitization?

The next generation of accountancy and finance professionals should understand not just accounting and their industries but also AI, blockchain and advanced analytics/Big Data, as well as how these technologies work together.

"While digital solutions provide useful outputs, human intervention remains essential, such as in the areas of problem-solving, exercising commercial acumen, identifying strategic insights and conveying them across the organization. 

 It also suggested that the two most junior roles can be upskilled to assume next-level roles. They may converge or look at moving to the internal audit track to take up the senior internal auditor/internal auditor role. On the other hand, those holding mid-level jobs should focus on upskilling themselves as "it will become vital for them to know about these digital tools and their usage possibilities relevant to the business".

The research also explores lateral transition pathways outside the accountancy profession and highlights that successful job redesign is multi-faceted. It requires a broad upskilling along the full spectrum from soft skills to hard skills, and is best achieved with detailed knowledge of the task profiles of job roles both within and outside of the accountancy profession. 

With accelerated digitization undergoing in the accounting and financial space, both employers and employees have to focus on reskilling and associations like ISCA have to also assist and support their learning journeys. By mapping what skills will be in demand and which will be redundant, the accounting and financial professionals have more clarity on how they can protect their futures and build their careers. 

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Topics: Skilling, Technology, #Jobs

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