Despite the current economic turmoil, there is a still a need to consider the future and what the profession will be like in 2020. 
 
Story Melissa Wilkinson Illustration Dean Gorissen 
 
Twelve years ago the closest thing to social networking was a friendly, workrelated chat around a barbecue. Google hadn’t started its march towards global domination and the mobile phone industry was still in its infancy. 
 
This rapid pace of change since 1997 suggests that the world in 2020 will almost be unrecognisable. While trying to crystal ball the future is obviously fraught with difficulty, it is more important than ever that professions like Chartered Accounting start responding now to the key technological, demographic and regulatory forces shaping the industry. 
 
TECHNOLOGICAL CHANGE 
It’s no surprise that technology and globalisation will be major factors influencing the type and nature of work done by accountants. In the future virtual world, lower value transactional work is expected to be fully automated and offshored to lower-cost markets. As prices rise in countries like India and China, this work will flow to cheaper markets like the Philippines and Malaysia. Firms who start building collaborative relationships now with organisations overseas are likely to gain an important strategic advantage. 
 
Business futurist Craig Rispin says that this means that accounting firms will need to start making adjustments to their value proposition and service offering. 
 
“As an accountant, you don’t want to stay focused on transactional work. The type of work which will be most valued in the future will be those functions which can’t be automated or outsourced,” says Rispin. 
 
“Work which involves human ingenuity, creativity and innovation will be most prized. There’s no way you can outsource innovation. Although some members of the accounting profession are starting to position themselves as innovators, this is going to be a long road to hoe as the profession is still largely perceived as transactional.” 
 
Tess Walton, founder of workforce planning solution provider Aruspex, says that companies need to actively invest in designing the future of their organisation. 
 
“Business leaders need to think about what their business is meant to look like in 2020. If there are roles that don’t have a future, don’t keep investing in them,” she says. “You can constantly try and fill a shortterm gap, but this means you’ll always be firefighting issues of today. You need to plan your way out of it by considering the critical skill sets required for the future. Automation requires a significant capital investment and also incremental changes in client expectations.” 
 
Advancements in technology will also mean that functions like reporting and measurement will be delivered in real time. While historical reporting will still be important, accountants will be pushed to deliver even higher level, forward-looking strategic business advice. For example, practitioners will need to find ways to add more value around the audit process. It may mean providing assurance that companies have the right controls, assessing risk or developing projections and other forward looking data. The accounting profession is likely to face greater competition in the areas of high-level advice from lawyers, engineers and management consultants. 
 
Technology will enable business to always be online, immediate and connected. Customers are likely to become more demanding and globalisation will continue to drive the need for businesses to provide 24/7/52 levels of service and responsiveness. 
 
The BRIC countries of Brazil, Russia, India and China will be the dominant economies and the importance of the US and Europe on the global stage is likely to diminish. Major technological advances in areas like genetic engineering, biotechnology and nanotechnology will have large influences on business practices. 
 
DEMOGRAPHIC CHANGE 
Bernard Salt, social demographer and partner at KPMG, agrees that ideas will be the currency of the future. 
 
“People who are intellectually broad, innately creative and technically excellent will be the most successful. In terms of social trends and people strategies, businesses will need to think beyond the slowdown this year,” says Salt. “People coming through in the profession will come from a different generation and have different values. 
 
“The old-world baby-boomer accountant will start to retire during and after the current economic downturn. From 2011 onwards, the world will be managed by a different breed of accountants. These practitioners will be more contemporary in their thinking and less committed to long-term relationships in the workplace. 
 
“There will be fewer career accountants and more mobile workers who have expertise in moving between companies, organisations and countries. These workers will be much more opportunistic as opposed to the hierarchical predisposition of the baby boomers.” 
 
Salt says that technology will enable much greater levels of workforce mobility and will have implications for how we work. “The idea of the working week from Monday to Friday is a 20th century notion. Technology has unlocked work from its cage as it now claims every day of the week. It will continue to eat into our sleeping hours so the key issue will be managing this trend.” 
 
Getting access to a supply of quality labour will still be an issue in the future due to the ongoing fall in birth rates and ageing of populations. Competition around the world for skilled migrants will keep increasing. Firms will need to continue adopting flexible work practices and hire contractors to fill the gaps. People will be working past the current age of retirement and younger generations will keep pursuing careers that can be portable globally. 
 
SOCIAL IMPACT 
While virtual work environments are becoming closer in reality every day, there are concerns emerging already about the social impact in the future. Mental health issues like depression are forecast to rise as more people live and work by themselves. Social ties and community will remain important regardless of how far into the future we look. 
 
This will mean that strong leadership will be required to manage the morale of these virtual workers. It will also mean that brands will need to be tightly managed in order to preserve their integrity. Values in organisations will become more important and socially conscious companies will find it easier to attract and retain high quality staff. 
 
Today’s global financial situation will fundamentally change capital markets in the future and lead to even greater regulation. This will present significant opportunities for the Chartered Accounting profession and is likely to stimulate growth in jobs in audit and assurance. Generalists who can offer strategic level counsel will also be highly sought. 
 
Accountants working in the listed company sector will face increasing challenges related to climate change and emissions reporting. There will be heightened emphasis on broad-based business reporting. 
 
Matt Harrington, finance manager within the casino division of Tabcorp Holdings and involved on the Institute’s Corporate Advisory Committee, says that the impact of the environment on a business will be a key focus for most CFOs. 
 
“This is going to impact earnings and increase reporting requirements. Like the transition to GST and AIFRS, corporates will need to prepare for the change.” Harrington believes that the role of today’s CFO will need to continuously evolve to adapt to the ever-changing business and regulatory environment in which they operate. 
 
“The CFO’s role has changed considerably in the last decade. The key issue is whether they can take on even more responsibility to deal with the ever increasing demands on their time. It’s possible their role may be split into two: a more traditional controller role and a forward-looking strategist role.” 
 
CONSOLIDATION 
Industry commentators predict more consolidation is on the cards for the profession in the future. Regulatory restrictions mean that not much activity will happen at the Big 4 level, but the midtier level is likely to experience extensive change. 
 
It is predicted that by 2020, there will only be two or three firms in the mid-tier space. It won’t be a case of bigger is better; instead the emphasis for these firms will be on specialisation. The days of being a one-stop-shop with a generalised service offering to everyone are over. Instead, firms will need to focus on certain practice areas like tax and audit and use loose networks of specialists when required. Boutique and small suburban accounting firms will still be required to service the small business sector which will remain a significant part of the Australian economy. This will continue to rise as more independent professionals (Ipros) leave the corporate sector and set out on their own. 
 
Tony Schiffmann, managing partner at BDO Kendalls in Brisbane, says that size won’t be the most important challenge for the accounting profession. 
 
“The key issue for firms like mid-tiers will be picking where they want to be in terms of industry positioning. To date, the secondtier firms have had a cushy existence but in the future they’ll need to be very clear about their brand proposition. As an industry we’ve been slow to understand the merits of brand differentiation. Parts of the profession have definitely been lacking in strategy in this area and they won’t be able to continue to do this by 2020. Customers are becoming more sophisticated around buying professional services.” 
 
The other key challenge to face the mid-tiers in the future will be technology. According to global futurist and chairman of FutureWorld International, Wolfgang Grulke, most business will be done in real time, so accounting and audits will be real time too. This will have major implications for the accounting sector and will require a change in thinking to understand the new business model and the need for audit automation. Large firms will face competition from more nimble mid-sized firms. 
 
“The worst nightmare for the large accounting firms would be a creative midsized company delivering an 80 per cent automated real-time audit solution,” says Grulke. 
 
“This could well be a joint venture with an Amazon or Google in order to get access to their technology. Big accounting firms are usually too slow to move, but the small to mid-tier firms will be able to take the sector to the next level. This is likely to create another very dominant player.” Information security will be a major challenge in a virtual world and there is likely to be strong demand for companies to act as safe harbours of data. According to Rispin, this will be a strong area of growth. 
 
“There are loads of start-up firms emerging now who are fulfilling this function and they’re likely to end up a bit like Amazon. Companies are worried about whom to trust with their data and they want to work with organisations which are innovative. This means that there are great opportunities for the accounting profession to move into this area and be appointed as safe harbours.”  
 
WHERE TO FROM HERE?  
Mark Johnson, CEO of PricewaterhouseCoopers sees the profession playing a very vibrant role. 
 
“The world will always need smart people to interpret and solve complex business issues. The pace of change will continue to accelerate and we’ll need to be very agile and responsive in how we manage it. 
 
“This means we’ll need to be better at interpreting where the future lies than in the past. The world is moving much more rapidly and we need to foresee changes faster. As a profession, we could have been faster in identifying assurance solutions for environment and climate-change-related issues.” 
 
Johnson says that as major industry issues emerge, leadership will be critical in order to guarantee the profession has a seat at the table. 
 
“The role of the accounting profession will be critical in the next 12 to 18 months as new global financial regulation is introduced. How can we play a role in setting the new world order? The profession needs to continuously question its relevance in the emerging environment and look for smarter ways to serve its clients.” 
 
Barbara Bell, general manager corporate strategy and planning at the Institute is helping to prepare the profession for the future. 
 
“A global business world will require more mobile workers who have a recognised industry qualification. When businesses are employing people, they’ll need a guarantee of quality, so credentials will become even more important. This will be very true if we’re in a virtual world where people don’t meet face to face,” says Bell. 
 
The Institute’s strategic plan over the next three years is focused on supporting the development of the profession globally. 
 
This means influencing initiatives developed by the Global Accounting Alliance and ensuring that the Chartered Accountants Program remains relevant as the world changes. Education will become even more important in order to guarantee the integrity and ethical standards of the profession. 
 
Bell says: “Our leadership activities and education programs are designed to prepare members so that they’re better equipped to move easily into the industries of the future. Chartered Accountants will need specialised skills to work on issues like emissions trading and also broad business skills to provide strategic advice. 
 
In 2008, we launched our live, interactive online training so that members have much greater flexibility around how and when they want to study to develop their skills. 
 
“More CFOs are moving into CEO roles as they’re increasingly being seen as logical successors. Accountants will need to have a more strategic view and won’t just focus on the numbers. Overall, the future looks very promising as the core skills of Chartered Accountants to synthesise, analyse and interpret information will be a key requirement in the knowledge age. Work will also be more varied and interesting at every level.”