LAS COURCEWORK 1

ACCOUNTING ROLES
KOKETSO SEKATE
ACCOUNTING AND FINANCE LEVEL 5
BOTSWANA ACCOUTANCY COLLEGE

Koketso Sekate
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Table of Contents

ABSTRACT...................................................................................................................2

INTRODUCTION..........................................................................................................3

THE EVOLVING ROLES OF THE CFO.......................................................................4

MORE THAN JUST THE TECHNICAL CFO................................................................6

FACTORS EXPECTED TO AFFECT FUTURE ACCOUNTANTS..............................8

CONCLUSION............................................................................................................11

APPENDECIES..........................................................................................................12

References.................................................................................................................13

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ABSTRACT

The purpose of this report was to investigate how the roles of accountants have

changed and the factors that have affected this change. It also examines how

relevant the technical accounting skills will be relevant to the profession in the future.

It was found that the roles of accountants have shifted to be a strategic planner and

innovator from the traditional bookkeeping roles. Technology has been the most

impact impactful factor in changing roles of accountants. Desk research was used as

a method of collecting data. Electronic journals, books, reports and newspapers

were sourced from the BAC library and Google Schooler. The sources used were

mainly based in the developed countries where technology is more advanced and

has significantly affected accounting profession while in Africa technology is still

limited. Hence it would be inaccurate to say the accountants in underdeveloped

countries have also been significantly impacted by technology. The sources used

lacked information on the factors expected to impact accountants in the future and

focused mainly on the current issues.

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INTRODUCTION

As indicated by the historical literature, the role of accountant has changed over the

years and is expected to continue changing. The shift from just functioning within the

finance department to being more involved in the decision-making of the company

and developing interpersonal skills is influenced by factors including Technology,

regulations and climate change. Accountants are becoming more tech savvy,

emotionally intelligent, innovative and are playing an active role in the fight against

climate change. This report investigates the evolving roles of the accountant and the

causes of this evolution and the skills that are going to be needed by the future

accountant so that they remain relevant.

According to the Concise Oxford English Dictionary (11 th edition) (2005):

Chief Financial Officer (CFO) is the corporate executive possessing financial

authority.

Technical expertise: having specialized skills.

Implications: expected consequence

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THE EVOLVING ROLES OF THE CFO

a. The power and control of the CFOs was non-existent from the beginning. Their

main roles were to collect and report financial information to executives without

having input in final decision regarding finances of the company. They were

technical experts who did bookkeeping. Zorn, 2004 (as cited by (Kant, 2016).

However, the modern CFO is at the fore front of the company’s decision making

and strategic planning. The roles of accountants are shifting from the traditional

number crushing towards being an active participant on the company’s decision

making, risk analyst and strategic planner Blewitt & Kelman as cited by (Jones &

Abraham, 2007) . According to the (ASDA, 2009) case studies, the finance team

led by the CFO is taking an active role in being the strategic planners on the

company’s climate change projects. The finance team realized that landfill tax is

costly, and that encouraged the company to come up with program ‘’zero waste

to landfill’’ on which the finance team is playing an active role on by analyzing the

actual and cost benefits analysis which refines the non-profitable and direct

success. This agrees with (Taylor, 2020) who claims that the CFO plays an

advisory role to other business departments. By taking a more strategic advisory

role, the modern CFO drives organizational improvements and plays an active

part in shaping business transformation. However, the studies conducted by

(Agrawal, Dinneen, & Seth, McKinsey & Company, 2016)) shows that only 4/10

CFOs spend time on other roles like strategic leadership and company

transformation. However, the historic literature argues that accountants have

always been management advisors to the business. Matthew as cited (Franco,

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 Feeney, Quinn, & Hiebl, 2017) and they argue that there is no evidence to

support the claims made by Matthew.

b. From the above statement, it shows how regulations of tax, and climate change

were able to inspire accountants to come up with strategic plans in order to curb

the expenses associated with climate change. Technology has influenced

change on accountants. CFOs can assist the company deliver a proper digital

strategy by building the business case for technological investments. (Vollmer,

2017). This requires the CFOs to be a technological expert who can assess the

potential benefits of technologies that the business can take advantage of.

(Munoko, Brown-Liburd, & Vasarhelyi, 2020) state that AI is used to execute

auditing and accounting measures such as data analysis, fraud prevention and

reviewing ledgers, and this results in cheaper, accurate and faster analysis of big

accounting data. This shows that the CFO spend less time overseeing and

managing financial statements since they are free of errors. However (Munoko et

al., 2020) argues that accountants make conclusions that AI is always accurate,

which is not always the case, hence (Johnson, 2015) states that technology

leads to rejection of ethical responsibility since it lacks to trigger ethical concerns

in decision making.

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MORE THAN JUST THE TECHNICAL CFO

The CFO of the past needed technical expertise to succeed in their profession.

However, today, advanced technologies such as automation and artificial intelligence

are taking over simple accounting tasks and it is only a matter of time till they take

over complex tasks, hence (Thomson, 2017) claims that these changes require

accountants to develop new skills in order to remain relevant. This shows that

accountants of the future will use less of the technical accounting skills and more of

the non-technical, which calls for development of other desirable skills. The CFO will

have to develop soft skills (emotional intelligence), innovative and be tech savvy.

a) (Margaritis, 2016) states that the CFO needs to have the skills to manage

people, so in order to achieve that, she needs to invest in her interpersonal

skills. (Taylor, 2020) asserts that the future CFO will need to communicate

and collaborate with other departments in order to administer ownership of

cost and delivery, so in order to achieve good working environment with these

departments, the CFO will be required to develop his emotional intelligence

and soft skills. Goleman (as cited by (Issah, 2018) claims that emotional

intelligence is a significant skill in leadership, and it differentiates between

successful leaders. The future CFO will need to have emotional intelligence

qualities such as positive mood and empathy in order to motivate his team to

be more effective and productive in their work. Mayer & Salovey as (cited by

(Issah, 2018)) also claims that emotionally intelligent leaders use their

emotions and that of others wisely to inspire workers to adopt desirable

qualities. This is no exception for the future CFO since he will be the drive for

better change in finance and the company, hence the ability to motivate

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 others to adopt excellent qualities such as self-awareness and self-discipline

will successfully effect change.

b) As the future CFO is faced with more complex challenges, he will need the

skill of innovation to outsource opportunities from these challenges.

Innovation is essential for maintaining competitive edge; however, it is difficult

for companies to facilitate it. (Erdern, 2018). As such the CFO should to be at

the fore front of innovation to guarantee the survival of the company, although

this is not the belief of (Erdern, 2018) as he states that the innovation task

should be the responsibility of everyone in the company. Contrary to this

belief (Price, Lewis, & Steinhoff, 2020) strongly suggest it is the sole

responsibility of the CFOs to dream big and be innovators because they are

one of the professions prone to be obsolete due to the ever-changing

technological developments. As security issues continue to rise; hackers can

access sensitive information using cognitive systems, therefore CFOs must

learn how to protect their innovations by understanding how cybersecurity

works. As such they must work very closely with the IT department in order to

overcome this challenge. (Price et al., 2020). However, as the future CFO

assumes the quality of being tech-savvy, he will need to learn cybersecurity

on his own and even encourage the finance team to make cybersecurity

programs that will be able to withstand attacks on their innovations. Hence

reducing their dependence on the IT department to solve finance cyber

security issues.

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FACTORS EXPECTED TO AFFECT FUTURE

ACCOUNTANTS

The external factors that have and will continue to have the most impact on the

accountant’s jobs are Technology and Climate Change. It is expected that these will

benefit and challenge the role of accountants, eventually leading them to transform

their roles in order to remain relevant to the business world. Successful accountants

will use these factors as a drive to the betterment of the profession rather than its

irrelevance.

a) PWC (as cited by (Gunz & Thorne, 2020) suggests that by 2030 between

40% and 90% of all accounting functions will be replaced by technology.

Already, simple accounting processes such as posting, and collection of

accounts receivable have been automated and it is predicted that the

same will happen to processes like business analysis within a short period

of time (Frey& Osborne 2013). (Bible, 2019) argues that accounting teams

who fully embrace automation spend 80% less time on daily accounting

activities such as transactional reconciliations hence. Provided with more

time on their hands and being free from technical accounting work,

accountants will be able to look for areas where there be a need for

improvement. (Gunnells, Lakatos, & Busman, 2020) claims that

technology will improve accounting for the better using Blockchain

technology, automation and AI. They state that it is predicted that

Blockchain will have the most impact by giving tax agencies an oversight

so that they collect tax earlier. Applying it to tax will also reduce the

administration costs of collecting tax. Furthermore (Stancheva-Todorova,

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 2018)claim that fraud prevention, can be successful by using AI since

machines cannot be bribed. However, it seems like it would take

companies a longer time to adopt AI as means of fraud prevention since

(Gunnells et al., 2020) states that during a ACFE Anti-Fraud Technology

survey, only 9% of companies surveyed use blockchain or robotics as part

of their fraud prevention measures.

b) Climate change impacted the accounting profession, and it is predicted to

continue doing so over the years. In 2020, 14 major global accounting

bodies called upon accountants to put sustainability and fight climate

change. They said it is the responsibility of accountants to advice the

business on risk management since climate change poses long term

threats to businesses. This shows that climate change will impact how

they prepare their financial statements, so that they assess the potential

risks of climate change properly. Barry Melancon, the CEO of International

of Certified Professional Accountants said “the accounting profession has

long focused on assessing and managing financial risks. However, the

global risks we are seeing today environmental risks, are pushing our

profession to expand its remit’’ (ICAEW, 2021). Accountants play a

significant part in anticipating and mitigating the impact of climate change

by properly assessing the risks and providing credible information on the

sustainability projects. A statement from the chief executives of global

accountancy bodies to the accountancy profession in 2020 stated that

accountants should ensure suitable policies and regulations that will

advocate and support policy developments that are aligned with net-zero

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carbon economy and they should also put climate change risk in their

financial strategies and operations. Accountants should also disclose how

climate change is likely to impact business and how business are

contributing to climate change as well. They should be transparent in their

reports since they at on the best interest of the public.

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CONCLUSION

This report has discussed how the roles of accountants have shifted from number-

crushing to being a strategist and active decision maker in the company. It has also

argued technology, laws and regulations and climate change have and will continue

to effect change in the roles of accountants and the CFO. It shows how soft skills,

and an innovative mindset are being beneficial to the accounting profession. As such

it is recommended that accountants and CFOs improve their emotional intelligence

and innovation so that they can face any challenges and stop relying only on their

technical skills. They should be in touch with the emerging technologies that may

affect accounting.

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APPENDECIES

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References

Agrawal, A., Dineen, B., & Seth, I. (2016, December 9). From McKinsey&Company: mck.co/2OwIwfE

Agrawal, A., Dinneen, B., & Seth, I. (2016, December 9). McKinsey & Company. From McKinsey &
Company: mck.co/2OwIwfE)

ASDA. (2009, December). The role of the finance team in climate change projects. London, United
Kingdom.

Bible, B. (2019). DRIVING DIGITAL FINANCE. Strategic Finance, 46-51.

Buckett, B. (2005). Concise Oxford English Dictionary (Eleventh Edition).

Erdern, M. (2018). The Innovator CFO. In M. Lind, & K. Barner, Finance Unleashed: Leveraging the
CFO For Innovation (pp. 41-48). Cham: Palgrave Macmillan.

Franco, C. M., Feeney, O., Quinn, M., & Hiebl, M. R. (2017). Positon practises of the present-day CFO:
A reflection on historic roles at Guinness 1920-1945. Revista De Contabilidad, 55-62.

Gunnells, C., Lakatos, J., & Busman, J. K. (2020). Innovatine Technology Shaping Accounting Senior
Project.

Gunz, S., & Thorne, L. (2020). Thematic Symposium: The Impact of Technology on Ethics,
Professionalism and Judgment in Accounting. Journal of Business Ethics, 153-155.

ICAEW. (2021, October 7). From www.icaew.com

Issah, M. (2018). Change in Leadership: The Role of Emotional Intelligence. Sage Open.

Johnson, D. G. (2015). Technology wth no responsibility. Journal of Business Ethics, 704-715.

Jones, G., & Abraham, A. (2007). Education Implications of the Changing Roles of Accountants:
Perceptions of Pratitioners, Academics snd Students., (pp. 89-105).

Kant, C. (2016). The Evolving Roles of the CFO: An institutional conception of the professional roles
and identities.

Lev, B., & Gu, F. (2016). The end of accounting and the path forward for investors and managers.
John Wiley & Sons, Incorporated.

Margaritis, P. (2016, May). It's Time to Get Out from Behind Your Desk. pp. 14-15.

Munoko, I., Brown-Liburd, H. L., & Vasarhelyi, M. (2020). The Ethical Implications of Using Artificial
Intelligence in Auditing. Journal of Business Ethics, 209-234.

Price, L. A., Lewis, A. C., & Steinhoff, J. C. (2020). CFOs of THE FUTURE: CHARTING A NEW COURCE
THROUGH THE SEVEN I'S. The Journal of Goverment Financial Managment, 12-19.

Stancheva-Todorova, E. P. (2018). How Artificial Intelligence is Challenging Accounting Profession.

Journal of International Scientific Publications, 126-141.

Taylor, S. (2020). THE MODERN CFO:ADAPTING TO A TIME OF CRISIS. Strategic Finance, 42-47.

Thomson, J. (2017). Is the Accounting profession committed to closing the skills gap? Certified public
accountant. The CPA Journal, 16-17.

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Vollmer, S. (2017). How a CFO can become great. Journal of Accountancy, 36-38.

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