• Evolution in reporting and the need for value creation require accounting educators to step forward and upskill accountants.
• The skills gap can be overcome by training and short-term skills development programs.
• Accountants must understand the broader view of value creation through business models. Transparency does not mean bulky reporting.
• Accountants must espouse cohesive and effective reporting

Accounting education both impacts and serves organizations. It provides future accountants who are prepared to advise and make decisions. During the past decade, key developments in the field of accounting and reporting have raised the bar for future accountants, with significant implications for accounting education.

 The International Education Standards (IES) represent the underlying principles, concepts, and definitions that enhance accounting education globally. The implementation of the IES; however, is affected by an array of new challenges and expectations for future accountants and, consequently, accounting educators.

Today, accountants are expected to display a broader skill set to help integrate financial and non-financial accountability and transparency. They are expected to have knowledge of the International Ethics Standards Board for Accountants (IESBA)’s Code of Ethics, International Financial Reporting Standards (IFRS), the <IR> Framework of the International Integrated Reporting Council, and many other globally-recognized frameworks and practices. They have to understand the business and the environment in which it operates, the related risks, and the financial and non-financial implications of those risks. According to a report published by Chartered Global Management Accountant (CGMA) “The value of intangible assets has now grown to  over 80% of total market value for S&P 500 companies”.  Gone are the days when accountants recorded only tangibles and reported only the numbers. Now reporting is about value creation. Organizations must provide information needed by stakeholders to make better decisions. For accountants to remain relevant, accounting education must keep up with this evolution.

As business partners, accountants have to advise on value creation and how it is linked to the strategic decision-making of organisations to attain their short-, medium- and long-term goals. Accountants are expected to envision new ways of enhancing organizational prospect and value. To meet these expectations, accountants must develop and broaden their skill set, specially their professional values, attitude, ethics, communications, and knowledge about different capitals and non- financial disclosures, and critical thinking.

In its report Global Management Accounting Principles, CGMA recognizes four principles: Influence, Relevance, Analysis, and Trust. These principles, which underpin integrated thinking, were designed to help organizations make better decisions. The report discusses the important role of accountants in this process. Understanding value creation in a broader context by analysing what is going on in the business and why and building trust amongst stakeholders based on information shared in a balance sheet, is the real challenge for accountants. This can be done only when accountants have a clear vision of the business model. The International Integrated Reporting Council defines the business model as, “ the organization’s chosen system of inputs, business activities, outputs and outcomes that aims to create value over the short, medium and long term”. The business model is not only the intra-connectivity of internal components but also the inter-connectivity with the external environment like political, economic, social, and technological components.

The <IR> Framework addresses the dynamic relationship between reporting and value creation. The question is: are accountants being prepared to understand this dynamic?

Accounting educators must re-imagine the accounting curriculum. They should talk about the six capitals recognised by the IIRC—financial, manufacturing, intellectual, human, social and relationship, and natural. These capitals represent the value organizations use to produce goods and services; together they create value for stakeholders. Accounting educators must also talk about how accountants report value creation to investors and society at large. With so many disclosure requirements, annual reports are already too bulky and uninteresting. Accountants must achieve balance between transparency and effective reporting. They must be able to analyse as well as prepare cohesive reports in accordance with a variety of framework and regulations.

Accountants have a momentous role to play. To prepare them for this role, the future accounting curriculum must emphasise quantitative and qualitative information, long term rather than short term outlook, and prospective and retrospective analyses. The annual report must showcase a wider performance model that goes well beyond an audit compliance checklist. Reporting must reflect integrated thinking and enhanced intra- and inter-connectivity with the six capitals and showcase the essence of value creation. This will require future accountants to fit into a variety of roles, react rapidly to harness opportunities, understand stakeholder aspirations, and contribute to decision-making accordingly. This goes beyond today’s qualifications and experience and includes new skills—or perhaps a different application of current skills—to clearly understand business models and the proficiencies of integrated thinking.