On October 24, 2019, I had the great pleasure of presenting to over a thousand accountants and auditors in Guadalajara, Mexico at the National Assembly of the Instituto Mexicano de Contadores Públicos (Institute of Public Accountants of Mexico or IMCP) on “Challenges and Opportunities for the Accountancy Profession in the Era of Digital Transformation”.
The implications of digital transformation are far-reaching for our societies and go beyond just the accountancy profession. As civil society organizations, professional accountancy organizations such as the IMCP have important opportunities and responsibilities in developing pathways into accountancy that meet the present and future needs of the economy.
In contrast to the many pessimistic forecasts about the future of the accountancy profession, it is not within the most vulnerable sector, nor has it yet been adversely affected by digital transformation. The jobs primarily impacted by digital transformation are manufacturing jobs. Meanwhile, employment in the services industry and highly-qualified jobs has increased (for more information, I recommend The OECD’s Skills Outlook – Thriving in a Digital World).
Recently, the U.S. Bureau of Labor and Statistics updated its Occupational Outlook Handbook, and the Wall Street Journal published an article based on its analysis of the data entitled, ”The Most Promising Careers of the Next Decade”. Many predictors of the future of accounting and auditing profession would be surprised by the results:
- Accountants and auditors rank #19 in the most promising jobs of the next decade
- 146,000 projected annual openings until 2028
- 6.4% projected growth rate by 2028
While this is very positive news, I believe the even better news is that “Financial managers rank #2 in the most promising jobs of the next decade.” The projected growth rate by 2028 is 16%, which is much faster than average.
Digital Globalization and The Future of Work
The OECD’s Future of Work has important messages for the accountancy profession to consider as it ponders the challenges and opportunities of the digital era. A process of creative destruction for how we work is underway. Workers will have to change their jobs and perhaps their occupation. Most people will have to modernize their skills. Benefitting from digital transformation depends on a country’s capacity to help workers adapt to changes and develop relevant skills. Digital transformation will impact each place differently. Not all will be equally prepared.
Professional accountants in Latin America are primarily engaged in public practice. For example, the IMCP reports that 67% of its members are in public practice, 22% in business, and the remainder split between the public sector and academia. It is worth noting that not all people working in accounting are members of the Institute or considered professional accountants with degrees. Throughout the Americas, including the U.S., hundreds of thousands of professionals are working in accounting, though they are not members of their country’s respective associations or institutes.
In my presentation, I focused on Daniela Jimenez from the OECD Future of Work profiles (from The OECD Employment Outlook 2019: The Future of Work). Daniela has a degree in economics and works in accounting in Mexico. She says that what she wants from her future of work is to use her degree “to work in the sector where [she] studied, in an institution where she can bring something to [her] country.”
To me, Daniela is the type of dedicated person already working in the accountancy profession that our associations and institutes should be attracting—and offering a great future and a clear way to contribute to their country.
We must be relevant to people like Daniela, not only for our own success, but in order to fulfill our public interest mandates with respect to shaping the future of work.
Through the IFAC Member Compliance Program, we monitor and assess several factors related to the regulation of the accountancy profession in each of the 130 jurisdictions where our more than 175 members operate. An important lesson we’ve learned is that there are clear variations in how the accountancy profession is organized throughout the world. In Latin America, the profession tends to be defined by law, with the primary—and frequently only—requirement being a university degree in accounting.
Unfortunately, for people like Daniela working in accounting in Latin America without a university degree in the field, the professional accountancy associations do not have much to offer. The only way Daniela can access the training and services offered is if she has an accounting degree, which is the primary prerequisite for membership in an association. To meet the evolving needs and diverse skillsets required of the accountancy profession, our professional associations and other authorities regulating the profession should consider alternative pathways for people like Daniela into the profession.
As described in the OECD’s report, many sectors will lose jobs, and most of the people affected will have to be retrained. These will primarily be people in the manufacturing sector with little formal education. In many countries the accountancy profession offers vocational pathways, such as accounting technician training, in which people can start their training, get certified, and get to work while continuing their education and training. Unfortunately, in Mexico and throughout the rest of Latin America, this is not the case.
Digital Transformation: Another Key Tenet of Globalization
A decade ago when I started working with the accountancy profession in Latin America, the region was somewhat delayed in adopting international standards compared to other regions, and those related to education (International Education Standards or IES) in particular. Over the last ten years, I’ve seen professional associations in Latin America adapt by moving their organizations and stakeholders toward adopting and implementing international standards and practices that are covered by IFAC member requirements (our Statements of Membership Obligations).
The adoption of international standards, which has reached peak levels according to our recent International Standards: 2019 Global Status Report, requires a commitment to using an international language in order to provide high-quality financial information—a commitment, in other words, to the globalization of business and markets. It requires education, training, and adaptation of mechanisms and processes to ensure standards are disseminated and translated, where needed.
This same type of coordinated commitment is essential for the accountancy profession, so that it may continue to adapt in the era of digital transformation, another key tenet of globalization.
The reason for the challenges in Latin America with respect to IES adoption has been primarily related to the fact that certification, which is the basis of the education standards, is a foreign concept. By certification, I’m referring to a process that includes initial education and continuing education. As described by my colleague Manuel Arias in his article Education in Latin America: Keeping Pace with Change (2017), stakeholder awareness of the standards and their importance as global benchmarks for accountancy education is low.
If digital transformation is the reimagining of business in the digital age, e.g., making use of technology to modify business processes, culture, and customer experiences, then the accountancy profession must reimagine itself to be equally relevant in the changing landscape.
How Will the Accountancy Profession Transform?
At the beginning of my presentation, I asked the audience to raise their hands if, in addition to accounting, they possessed a university degree in another field. About 10% of the audience raised their hands. I then asked if any of those included a degree related to information technology, communications, or data management.
One person raised a hand.
Using a web-based app, I polled the audience on what they thought the future would bring for the accountancy profession. I did this at the very beginning before I introduced any of my own ideas. 99% of respondents communicated that the profession would evolve and progress along with digital transformation. The image below is a word cloud of topics culled from the responses. 
While participants were optimistic about the future of their profession, not many have an educational foundation (formación in Spanish) that would enable their evolution.
Unsurprisingly, when I polled the audience on the most important skills for the future, technology was mentioned in 53% of the responses. The capacity to adapt to change, and a commitment to continuing education were mentioned by about 20% of respondents.
Managing Change Requires More than Digital Skills
As we determined from our 2018 IFAC workshop Building a Future-Ready PAO, with inputs from over 100 participants from professional accountancy organizations from 70 jurisdictions, while the world is focused on automation and digitization, nothing will replace emotional intelligence. Combining digital advances with emotional intelligence is key to maximizing the value of, and analysis produced by, technological advancements.
Education in the digital age does not necessarily only mean teaching new technologies. We can’t expect all professional accountants to have IT degrees. Equipping accountants to manage change in the digital age also requires shifting the focus from “hard skills” toward “soft skills” and valuing emotional intelligence more highly, while also teaching critical thinking, analytical ability, and innovation. It is also important to teach accountants to see the “big picture” and support a continuous education process that is flexible and always relevant to the current business environment.
Significant progress has been made in the Latin America region with the adoption of continuing professional development practices, practical experience requirements, and other good practices as described in Manuel’s 2017 article. Nevertheless, there is still only one route into the profession: a four-year university degree. I believe this will continue to limit the profession from recruiting people from different walks of life with the various formations to complement the diversified skills sets that are needed in the profession.
Transformation and La Bamba
My message on relevance for the IMCP—and for the rest of Latin America—is twofold.
As a profession, our associations must provide competencies that enhance our members’ relevance for the evolving job market, which includes digital and soft skills, including very importantly the ability to adapt to change.
If we are to enhance relevance to the job market and society, and if we want to attract diversified talent and skillsets, we need to consider providing pathways into our profession for both professional and non-professional workers without degrees in accounting. This can be done for those with non-accounting degrees through conversion programs and for those without degrees through vocational training.
My final message was that, if we as a profession want to succeed in the new era of digital globalization, then we need to reimagine ourselves and our professional accountancy organizations. While we should continue to focus on professional accountants and how we provide them with the skills and knowledge necessary to adding value and succeeding through this era of rapid change, we should also consider how we can learn from our successes and shortcomings as a global profession.
As professional organizations representing a valuable cross-section of the labor force contributing to economic growth and development, we need to raise our voice and the awareness of government and key stakeholders as to what we have to offer our populations: training, competency, credibility, trust, life-long learning, excellence, social mobility, stability, and growth.
And to do that, what do we need (Que se necesita)? Borrowing from the wisdom of one of my favorite Mexican folklore songs:
- A little bit of grace (..una poca de gracia):
-An open mind and willingness to change
-Commitment to life-long learning
- For me, for you (..para mi, para ti):
-Inclusive policies that support priorities for the most vulnerable sectors of the population - And up and up (..ay arriba y arriba):
-New sources of revenue to reinvest in future sustainable growth
-And the diverse range of people who can support that need
As our IFAC country and member organization profiles show, a variety of approaches exist to providing pathways into the profession. While we may not be able to give professional accountants of Latin America all the skills needed in the era of digital globalization, we can do a better job of attracting and bringing a greater variety of people who already possess diverse skills into the profession.
After all, as a profession, we are composed of people. If we want to be relevant and successful, then we need to demonstrate the value of opportunities for people like Daniela to certify their knowledge in accountancy and serve productively in the future of work.
