The future-ready professional accountancy organisation must be global

7 Dec 18

During the IFAC Professional Accountancy Organization Development Committee meeting in October 2018, committee members engaged in a day of creative thinking about the future-ready PAO. CIPFA’s Alan Edwards captures the discussion.

 

The recent IFAC Professional Accountancy Organization Development Committee meeting started with meditation, but with a purpose: we were asked to picture a future accountant.

Most of us pictured more of a Palo Alto-Steve Jobs-esque techie than a pin-stripe, suited New York City gent. That image is important as it is indicative of the discussion themes throughout the meeting:

  • that accounting in the future will be as much about data analysis as financial accounting
  • that accounting careers will be far more global than local
  • that the tools of the trade may be more technological but interpretation will be made by insightful humans with a personal touch.

To help us assess the potential impact of these issues on PAOs, we used the Panarchy Cycle framework, which is based on the life cycles in nature and has four components:

  • Germination: the seedling, the birth of ideas
  • Growth: ideas and concepts that are beginning to take root, gain momentum and grow
  • Conservation: things that will stay the same
  • Creative Destruction: what needs to die in order for new shoots to grow?

In applying these concepts to PAOs, we examined roles and activities PAOs should Germinate, Grow, Conserve, and Creatively Destroy, and developed some consistent answers and themes.

Germination

  • Diversify membership by both age and gender
  • Develop new skills such as data analysis, cyber security and anti-money laundering
  • Emphasise people and communication skills
  • Recognise the importance of social issues and the need for integrated reporting

Growth

  • Accountancy training for all sectors, job roles and grades
  • New and wider continuing professional development offerings with emphasis on technology and people skills
  • Develop centers of excellence
  • New sources of income and a more sustainable business model

Conservation

  • Strong and steadfast ethics
  • Self-regulation along the lines of education, ethics, investigation & discipline
  • Camaraderie

Creative Destruction

  • “Club” like nature of membership
  • Historically restrictive membership criteria
  • Stuffy image of accountancy;
  • Overly bureaucratic governance models

 

These ideas and more are encapsulated in the below diagram.

ifac_picture.png

Credit: IFAC

Credit: IFAC

 

For many of us, desired change can be summed up in the phrase “reinventing the professional accountant”.

PAOs looking to implement these ideas and other changes may face road blocks; road blocks that are similar to those faced by other organizations in a dynamic market economy. This includes lack of scale and a sustainable business model, a culture of rivalry and exclusivity, and constrains from inappropriate governance models. PAOs may also face an ageing PAO membership and/or an unwillingness for those charged with governance to consider change. Like all businesses, PAOs also need talented individuals to engage with PAO development.

Some PAOs may also need a more strategic vision. A PAO’s strategy needs to recognise the increasingly global business environment. Most professional accountants at some time have worked for or with major global firms or corporations.

We no longer expect local standards and regulation whether that is in accounting, ethics, education or business. The future-ready PAO model needs to be global. And this global PAO model is likely to embrace membership and training professionals in all sectors—i.e., private, public and not-for-profit—and for all roles—e.g., audit and business.

Another key aspect of a future-ready PAO is it should embrace all levels of the profession—including Accounting Technicians. As outlined in a new Confederation of Asian and Pacific Accountants (CAPA) publication, training and professionalising an Accounting Technician workforce is not just about benefiting individuals or organisations by opening access to professional qualifications. Rather on a more fundamental level, it is about providing the right support for the growth of national and regional economies, business and government, and ultimately, serving the public interest.

There are many paths toward globally-relevant and diverse professional bodies. We’ve seen how airlines have used mergers and partnerships when faced by global pressures. Such alliance models are approaches that PAOs might consider — including breaking down barriers to find partners across borders. Regional shared service models may be another way of gaining scale.

Some of these paths may be more controversial than others but, ultimately, the key takeaway is that a future-ready PAO should openly debate these issues and embrace the global challenge.

Reflections and insights from the entire day’s workshop are available online and were used to lead a workshop at the recent World Congress of Accountants to continue these conversations. We look forward to building on the outcomes of these events and developing future-ready PAOs.

This article originally appeared on the IFAC Global Knowledge Gateway. Visit the Gateway to find additional content on a variety of topics related to the accountancy profession.

Copyright December 2018 by the International Federation of Accountants (IFAC). All rights reserved. Used with permission of IFAC. Contact permissions@ifac.org for permission to reproduce, store, or transmit this document.

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