Earlier this week I published a blog (https://www.proformative.com/blogs/anders-liu-lindberg/2015/06/13/why-accountants-are-threatened-species#comment-26333) about how I saw a trend of accountants soon being out of a job. However, the discussion brought many more nuances to the table and flat out concrete evidence that this seems not to be the case as illustrated by below two articles. http://money.usnews.com/careers/best-jobs/rankings/the-100-best-jobs?page=2 http://careerweb.leeds.ac.uk/info/56/job_market_trends/235/the_european_and_global_job_market They basically say that both in US and Europe
Is Accounting a growth industry and why?
Answers
Anders,
I think accounting and the issues surrounding the profession, companies, governments and workforce are extremely complex.
- Regulation, compliance and reporting (governmental driven) only increases
- The profession, by design or necessity increases its own complexity by defining and redefining GAAP, IFRS, not playing well in the same sandbox
- Offshoring, while possibly a cost savings has hidden costs and risks (real or imagined, which equals real) that many companies won't want
- Remote accounting, while very popular with small firms soon looses its appeal as the need for sophistication increases
- Automation may eliminate certain levels of human capital from the accounting function, but some of the aforementioned issues only increase other areas, IE, the bookkeeper level diminishes, but the cost
That being said, all businesses will need accountants, controllers and
4
Thank you, Wayne,
So in some way the industry if including it's regulators is safeguarding itself from being obsolete by making everything more complex on a continuous basis?
Absolutely. However, the industry will not become obsolete, because no matter how "intelligent"
Wayne,
I fully agree that someone needs to interpret the data, however, who is that person? A classic accountant, an analyst, a finance business partner etc?
It depends on the data, and the analyst will need to be either an accountant or a finance person (and to some extent they are cross trained), or someone higher up the ladder who has different perspectives.
I remember a scene from an old sifi British TV series called "Space 1999". They were examining an intelligence photo, but the camera had a defective range finder. They argued back and forth what the images on the picture meant. Then one of the characters asked that the camera be re-positioned and you saw a women's leg.
The lesson learned is different perspectives see different things, and only with measured focus do the results have meaning.
I am not seeing a decline in the need for accountants. I do see the role changing as it has been doing forever. Just the pure volume of data that is begin gathered creates the need to have a person who owns it being correct.
I agree with both @Wayne Spivak and @ Anders Liu-Lindberg. I don't believe the roles for accounting and finance professionals will ever become obsolete, but they are changing and will continue to do so. I believe we will need to play a larger role as a analyst/finance business partners, across an organization. I believe that is how I have been successful in roles that I have had.
(I am a finance professional seeking my next opportunity (finance role) in the Silicon Valley-John P. Martin).
I am by no stretch of the imagination a good sampling, however I have seen first hand the opposite. As the automation and technology grows, the need for Accountants that are also IT versed has grown. So the "Accounting" isn't going anywhere, but the people filling the roles need to be more macro business skilled.
It is also important that we differentiate "Accountants" and "Clerical Accounting". I think the articles you referenced are looking at Accountants holistically, while you mention the technology, automation, and outsourcing that really only touches "clerical accounting". This is no doubt a critical function of accounting, but a very small percentage of the investment into accounting (infrastructure & people) that businesses make.
It depends on the function of the role.
The accounting field has changed relatively greatly over the years and has, IMO, become Worse, no thanks to the SEC and to the AICPA and accounting standards board.
There's MORE, NOT less, rules and regulations, many of which is not needed but is needed at the same time. Those rules and regulations are meant to modify behavior of people and of industries, but again, add lots of paperwork generally done by... accountants!
Technology has made it worse.
Accounting.. companies have outsourced many accounting functions overseas and the general public uses Basic accounting software. Problem is... Garbage in, Garbage OUT!
I know of people in a Big 100 financial firms who's accounting sections were outsourced. The remaining people were to review the work done overseas but, instead, due to the INCOMPETENCE of the overseas workers, MORE work needs to be done, almost REDO everything before the information can be released to the public as in financial reports!
I know of people who buy tax software to do their own taxes only to go to a tax professional because they got an IRS tax notice. When you look at their return and read the notice, it's almost obviously why they got a tax notice.
More work is done in compliance than anywhere else that it's hard to justify to clients about how much "value" accountants bring.
No, the accounting professional is mainly alive because of the attorneys, the politicians and the AICPA who creates more and more burdensome rules and regulations which most people don't want to deal with so accountants won't necessary lose their jobs anytime soon!
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GIGO. TRUE!
But, don't be so fast to say the overseas workforce in your example was incompetent. It was more likely the communication, or lack there of, that resulted in the need for redo. How are remote clerks supposed to know how to properly classify a transaction that they are so far removed from?
And, many people receive IRS notices - CP2000 notices come to mind - that are incorrect. Whether they use one of the common tax preparation software programs, do their returns manually or avail themselves of your services. Those IRS notices are generated automatically by algorithms and not reviewed by humans. They are prone to error as you point out. In my own experience, half of those notices are erroneous and the tax return involved is fine.
But, the good news is, your consulting business is secure for these very reasons. :-)
Business/Revenue models are changing. Disruption is happening. Uber, AirBnB, etc. SaaS (even law firms are shifting to subscription type of revenue models).
Accounting is evolving with the times, governing bodies.regulators (SEC, Boards, etc) are also responding to the changing business/revenue models. Not to mention that business professionals in general continually look for creative ways (loopholes) they can exploit to lower tax bills NOT consistent with the intent of laws.
EVOLUTION and EXTINCTION are two different things!