Counting on Change – Caribbean accountants face a host of external pressures

Caribbean accountants face a host of external pressures that are changing the way the region does business.

[dropcap]A[/dropcap]ccounting is one of the world’s oldest professions, dating back to ancient Mesopotamia where early bookkeepers counted sheep and audited temples. These days, Caribbean accountants are grappling with Artifical Intelligence (AI), blockchain technology and other disruptive technologies, alongside ever-evolving reporting and disclosure requirements. In this increasingly globalised and technologically advanced world, the sector is changing the way it does business – focusing on skills development and identifying areas of opportunity.

DISRUPTIVE TECH

One of the top concerns for virtually every industry in recent years has been the rise of the Fourth Industrial Revolution, in which the real world becomes increasingly integrated with the digital environment. In a business landscape that is continually evolving to encompass the latest technology, accountants have to stay ahead of the curve.

Artifical Intelligence, blockchain technology and robotics are set to radically shape the industry in the near-term. IBM Business Analytics predicts that, by 2020, accounting tasks, tax, payroll, audits and banking will be fully automated using AI. In this new age, accountants will not only need a firm grasp of traditional accounting principles but also familiarity with data and analytics skills as well as a willingness to refocus and retool to address any skills gaps as the field advances.

“The digital transformation that is engulfing economies across the world has no doubt created new and interesting challenges for the accountancy profession,” says Misha Lobban Clarke, Chief Executive Officer, the Institute of Chartered Accountants of the Caribbean (ICAC). One of the key challenges arising from this transformation is the issue of data protection. As services move online they become vulnerable to cyber crime, which costs Latin America and the Caribbean around US$90bn a year, according to a study by the Center for Strategic Studies and McAfee.

“The efforts by governments and regulatory bodies to address the impact on business practices due to digitalisation, AI and data analytics have resulted in new and more stringent regulations, disclosure rules and standards, which all have implications for the financial and accounting sectors,” says Lobban Clarke who believes that opportunities exist for accountants to thrive in this new environment.

“I believe that these new developments create new and interesting opportunities for the professional and the Caribbean as a whole. They necessitate new strategic thinking and approaches by regional governments, changes to business models and the way we do business, [and] improvements in decision-making within the public and private sectors in order to leverage the value and opportunities that these new technologies offer.

“Accountants can capitalise on smart technologies to enhance their traditional ways of working and it is believed that greater use of social media via smart technology will improve collaboration, disclosure and engagement with stakeholders and the wider community.”

BEST PRACTICES

ICAC celebrates its 30th anniversary this year. In its three decades of operation, membership has grown to around 4,200 accountancy professionals and eight national institutes, including one in the Eastern Caribbean which represents Saint Lucia. The Institute’s role includes promoting best practices and ensuring adoption of international standards.

All ICAC member territories have formally adopted International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). The region is also in the process of getting up to speed with the International Public Sector Accounting Standards (IPSAS). As of 2017, nearly 60% of Caribbean countries surveyed by the ICAC had adopted IPSAS or national standards based on IPSAS and the remaining 40% were in the process of implementing them. Once fully adopted, IPSAS will help ensure greater fiscal transparency and financial credibility. “There will be more effective and efficient management of public resources as a result of better informed public policy making, based on enhanced financial reporting,” says Lobban Clarke who adds that the benefits will trickle down to deliver better quality public services, sustainable economic growth and increased employment.

The ICAC is also championing a far-reaching Public Sector Financial Management Reform programme, which will begin rolling out initiatives within the next year. The programme is intended to promote greater public sector accountability and transparency within the Caribbean.

NEXT GENERATION

Looking ahead, ICAC wants to help the sector tackle any oncoming headwinds through solid leadership, continued professional development, increased engagement with stakeholders and new strategic linkages.

In the long-term, the next generation of accountants is expected to make quite an impact on the industry, embracing technology and changing the culture. According to Big Four firm PwC, millennials will form 50% of the global workforce by 2020 and, by 2025, will comprise 75% of the accountancy profession. “Millennials already occupy a pivotal place in the accounting profession and they have already begun to redefine the world of work globally,” says Lobban Clarke. “They are the ones leading the online technology movement and their preferred tools are mobile communication, social media and other forms of digital technology.

“Today’s millennials bring with them an array of new approaches, skills, perspectives and ideas to the work environment and to work itself. In order to attract more millennials and retain them, employers within the accounting sector will need to change the corporate culture to accommodate the new skills and mindset of millennials. This will involve rethinking strategies for training and engagement of millennials and considering new approaches to how work is done.”