The Evolution of the Accounting Industry: Part 2
Posted by: on 21 August 2015 in Compliance
August 21 – By Angela Lehmann
5 possible impacts to accounting professionals
1. It’s going to get increasingly difficult to find employment
The Department of Employment (the Department) states that there are 40.5 applications on average for each accounting job and they are qualified applicants with professional membership. The level of applicants per job is highest of any profession group tracked by the Department.
Reportedly, the number of internet job ads for accountants has plummeted from a peak of about 15,000 a month in mid-2008 to about 5,000 a month in mid-2013.
The larger accounting firms are reporting that they have not seen a decrease in the number of applicants for positions and most of these firms have drastically scaled back recruitment, particularly in respect of graduates.
Pitcher Partners’ HR director Elizabeth Nunez stated, “large organisations are not putting on the volume of graduates since the financial global crisis so we can afford to be more selective.”
“Automation and offshoring would reduce demand for junior accounting jobs by up to 10-15 percent in First World economies, which would be offset by a spike in demand in emerging economies” said Edward Nausbaum, the global chief executive of Grant Thornton.
2. Can streamlining of accounting and tax compliance processes be achieved with our complex legislation?
Streamlining processes and automation are largely undertaken to ensure consistency, minimise human error and of course, reduce costs to accounting and tax practices.
However, given the complexities of Australian tax law, the question is how to best ensure that these offshore compliance or shared service ‘hubs’ are properly trained and kept abreast of legislative changes.
Sounds like a good business opportunity for a firm to get involved in.
3. The glass is half full: Ability for tax practitioners to offer value-added services
A major argument for those supporting the move to off-shoring or automisation is that it avails the tax agent the resources to be able to offer more value-added tax services and tax planning.
In practice, this would work best for clients that have a large and rather complex structure, where compliance is only a small fraction of the tax work required overall.
Presumably though, these value-added services require a certain degree of experience and education, which then leads to the question of what about the junior and less experienced staff? What do they work on?
Surely, in being able to see the whole picture of the clients’ circumstances, the compliance preparation plays a key part in understanding the clients’ affairs and actually identifying the areas in which further services may be beneficial to the client. Will accounting practices do more to maintain the preparation services or do they need to be skilled in new ways to uncover the needs of their clients for further services?
4. The move to digital could make it easier to satisfy record keeping requirements
With record keeping requirements generally requiring five years of record retention for any financial information, record keeping is a burden to tax agents, businesses and individuals alike.
Physical records are a logistical problem particularly for tax practices, with most generally having a separate off-site facility for storing older records.
Most Government and regulatory bodies however, now accept records in electronic format. That means that an archived email or file would suffice in most cases. This frees up costs for managing those old fashioned logistic elements.
5. My thoughts (for what they’re worth)
It is clear that the profession is rapidly evolving and that the ‘head in the sand’ approach will not suffice for tax practices wanting to remain competitive in the marketplace.
That said, it isn’t necessarily a bad thing if accountants start embracing the change and adapting their skills and service offering to incorporate the emerging technologies and partner with outsourcing companies to offer their clients added value.
Partnering with outsourced providers means that you can focus on strategic work with your clients and consulting work which would further cement the ‘trusted advisor’ relationship, whilst at the same time sharing the compliance burden and responsibility.
With some nostalgia however, I cannot help but feel that the mundane compliance work does actually serve an important purpose, a rite of passage if you will, for young and upcoming tax professionals. Every tax professional can attest that the foundation of their accounting/tax career all started with the preparation of hundreds, or possibly thousands of various returns.
For now, let us see what exciting things the future will bring by keeping our heads up and looking forward.
Article referenced: Australian Financial Review, February 20, 2014 by Edmund Tadros; ‘Accounting grads struggle to find work, but CPA says that doesn’t add up.’