Accounting in Digital Era?

Kelum Jayasinghe
Professor in Accounting
Director – Centre for Environment and Society (CES)
Employability Director
Essex Business School (EBS)
University of Essex
 Work place disruption?
• Disruption is changing the world of work and
transforming the way we work.
• Technologies such as Artificial Intelligence (AI),
Virtual Reality and the Internet of Things are
reinventing the workplace into something that is
almost unrecognisable.
• So what does this mean for students graduating?
• How these changes are impacting on different
sectors, what are the skills and mind-set
employers are looking for, and what is actually
possible for us?
 New economies??
• Circular economy - an alternative to a traditional linear
economy (make, use, dispose) in which we keep
resources in use for as long as possible, extract the
maximum value from them whilst in use, then recover
and regenerate products and materials at the end of
each service life.
• Mobile economy - any transaction that occurs on a
smart phone or tablet. It is currently more than 3
trillion dollars of the world's economy — or 4.2% of
the world's GDP. ... Beyond the retail use, the Mobile
Economy touches other industries such as banking,
healthcare and construction.
 Disruptive business innovations?

• Some competitors use technology, scale, and

sharp insights into consumers to lower prices,
improve products and services, and draw
customers away from traditional companies,
forcing those companies to cut costs and lose
relevance.
 Digitalisation and managers….!
• Today’s managers and employee teams with
regard to infrastructure, availability and
capacity
• These elements have accumulated in four key
technologies often referred as SMAC – Social,
Mobile, Analytics and Cloud.
• Venture capital investors have recently shifted
towards big data and artificial intelligence that
combine these technologies.
What happens to old industries??
• Digitization disrupting traditional industries,
e.g. Uber for car passenger transportation.
• Intelligence can streamline the manual labour
to research past cases, e.g. junior attorneys in
law firms
• Accounting firms need the competence to
choose the technologies fitting them and be
demanding and aggressive in adopting them.
 Impact of the digital era on accounting?

• Online transactions and automated records, e.g.

transactional accounting processes, fiscal period-
end accounting closes, regulatory filings
• New challenges to accounting and audit
profession, e.g. e-scanning documents and new
professional requirements
• Big data sets and less manual records
• E-governance and new form of accountability.
• Business process outsourcing (BPO) of accounting
tasks
 Future of accountants:
e-accounting/digital accounting and
digital audit??
• Loosing the job and pursue a different career??
• But entrepreneurial accountants will recognize the
opportunities that digitalization, automation and can
bring for expanding existing business models such as
business process outsourcing and tax processing
services (e-accounting).
• Seize the opportunity for change and embrace the
positive and imminent impacts from automation.
• Includes preparing themselves for less tedious and
more fulfilling work that will bring increasing value to
their organizations and their clients – as well as
themselves.
 Changes to public sector accounting and
governance?
• ‘‘Digital-era governance’’ (DEG), which involves
reintegrating functions into the governmental sphere,
adopting holistic and needs-oriented structures, and
progressing digitalization of administrative processes
• The growth of the Internet, e-mail, and the Web and the
generalization of IT systems from only affecting back-office
processes to conditioning in important ways the whole
terms of relations between government agencies and civil
society.
• Governments now face new ways to tailor and deliver
services to citizens, can use social media to share
information and mobilize or corrode support, and have
access to collaborative platforms to facilitate
crowd‐sourcing inside and outside government.
Can the role of accounting be replaced??

• No - its only low-cognitive accounting

activities and tasks (technical jobs) that have
been affected by the digitalisation and work
place disruption
• Accounting as a language and informing
technology still remain as “important” for
current and future business and
entrepreneurship
Accounting and business/entrepreneurship: the
relationship

• Accounting as a calculative practice – entrepreneur

as a calculative self?
• Accounting information for entrepreneurial decisions
(including in digital era)
• Accounting as the language of entrepreneurship –
visibility, measurability, valuation and judgement
• Management accounting and control systems
(MACS) as antecedent of organizational creativity
and innovation competencies.
MACS for Organizational Creativity and
Innovation Competencies

• MACS - the process by which managers assure

that resources are obtained and used effectively
and efficiently in the accomplishment of the
organisation’s objectives (Anthony, 1965; Otley,
1994)
• MACS encompasses both financial and non-
financial performance measurement.
Entrepreneur as a Calculative
Self and entrepreneurship as a calculative
practice?
• Calculations organise the operations of people
(and entrepreneurs), standardise their
ambitions, and discount their future for
rational decision making (Miller, 2001).
• The emerging calculative practices often alter
the capacities of people (and entrepreneurs),
organisations and the combination thereof
(make them more entrepreneurial).
Accounting information for
entrepreneurial decisions – still required?

• Feasibility/strategic analysis
• Business planning, forecasting
• New product/business development
• Organisational change.
• Accounting is the common language of any business
– measurement, valuation and judgement.
 Entrepreneurial accounting and sustainability
in circular economy

• Entrepreneurial Accounting involves

linking sustainability initiatives to company
strategy, evaluating risks and opportunities, and
providing measurement and judgment (this
responsibility has not being changed in digital
era)
• Accounting and performance management skills
ensure that sustainability is embedded into the
day-to-day operations of the company
(digitalisation has changed the ways of doing this)
Entrepreneurial accounting and sustainability
in circular economy
Specific roles of accounting in sustainability in
digital era
• Accounting helps to meet sustainable development goals
(as a language and technology)
• Accounting technologies are used to measure and
disseminate the sustainability (digitalisation impacted on
the ways of doing this).
• Professional accounting firms assure the good
governance of sustainability (this responsibility has not
being changed)
• Organisations (i.e. companies, state agencies, non-
governmental organisations) report and attempt to
maintain the accountability (under good governance) on
sustainability (CSR) (digitalisation has transformed the
ways of performing this task).