It is hard to blame the students of today for feeling added angst over their future careers. They constantly read reports about the prospect of automation putting jobs at risk.
We certainly do need to prepare for the future workplace, in which the impact of digital disruption will be felt deeply. But rather than dwell on the fears of robots stealing jobs, professionals such as accountants should look instead to the opportunities afforded by the latest digital developments.
The American economist Philip Auerswald underscored in his book The Coming Prosperity that in the course of history, whenever machine and tools substituted one type of human capability, new human experiences and capabilities actually emerged. This happened when humans made the transition from hunter-gatherers to farmers, and then from farming to more industrial modes of work.
Likewise, the boundaries of the accountancy profession are shifting, and the skills which it calls for are evolving. The advance of technology has freed accountants from the drudgery of menial and mundane tasks such as the manual data entry of invoices, to pursue higher-value work that may bring in higher incomes. That includes accountants harnessing technology like data analytics tools to provide more in-depth and timely financial expertise to help their business outfits navigate today's volatile business landscape.
To give a simple example, records of point-of-sale transactions can be used to project future patterns of consumer behaviour. Accountants can move from having a "hindsight view" to having more "predictive foresight". One of the possible outcomes of predictive foresight is that companies know what inventories to hold, which frees up capital and lowers costs such as rental - since less storage space is now required - and obsolescence.
Accountants in business can also use data analytics to understand and discover patterns in customer behaviours and advise businesses on the best course of action in a competitive market.
In time to come, accountants may be involved in the design of the systems and machines that take over some accounting tasks. Auditors will need to be trained to audit the reliability, rigour and accuracy of these systems and machines.
At the end of the day, it is no longer just about what profession one belongs to, but what skills one possesses. The impact of digital disruption will be keenly felt in all professions and jobs.
VALUE OF HUMAN PROFESSIONALS
What then is the value of human professionals? Take medicine as an example.
Most people, we would hazard a guess, would prefer not to have a robot replace their doctor.
That is not in any way to belittle the tremendous progress in artificial intelligence research in the medical industry. With the possibility of voluminous medical research knowledge being fed into a machine, a robot can realistically diagnose a patient much more accurately than a human doctor can.
Rather than robots replacing medical or accounting professionals, the latter need to work hand in hand with robots, to continue raising the value of work within their profession.
However, a patient's interface with a human professional is important for a number of reasons. The human doctor provides person-to-person psychological care that includes empathy and the soliciting of patients' concerns to enable the best diagnosis. A robot's "clinical" approach could solicit a different set of concerns and issues from the patient compared with a human doctor's "softer" approach.
Furthermore, Professor Richard Lilford, the University of Warwick's Chair in Public Health, highlighted the importance of human intuition where "you've got to act in medicine before you've got any certainty and that sort of thing the doctor will have to do". He concluded that a computer "may become a second opinion, or perhaps even a first opinion, but the doctor will still make the final call".
Then there are the issues of ethics, in medicine as in other professions, including accountancy. In a joint report released last year on "The Future of Professional Learning and Entrepreneurship" by the Institute of Singapore Chartered Accountants (ISCA) and the Institute of Chartered Accountants in England and Wales (ICAEW), born out of conversations with a range of professionals, there was unanimous consensus that the real value of the accounting profession lies in its members' integrity and ethics. Some participants were of the view that clients would have more trust in audit opinions issued by a human auditor as compared with a robot.
So, rather than robots replacing medical or accounting professionals, the latter need to work hand in hand with robots to continue raising the value of work within their profession.
According to a study of over 2,000 work activities in more than 800 occupations by the McKinsey Global Institute released this year, the easiest jobs to automate are those involving predictable physical activities such as assembly line work in manufacturing. The next easiest jobs to automate include data collection and processing activities.
At the other end of the spectrum, the hardest activities to automate are those that involve managing and developing people or require deep expertise in decision-making and planning.
Rather than being a monolithic role, the accountancy profession similarly covers a spectrum of activities from routine ones such as data entry to analysis and judgment. Routine activities can be and already are being automated with accounting software like Xero and QuickBooks. The implication of this would be job losses especially for accountants doing mainly routine accounting work, unless they can move on to higher value roles.
When the accountant analyses, applies judgment and then explains the issues relating to quality financial management to his clients or employers, he is actually assuming a role akin to an educator - an activity which the McKinsey study identified as among the most highly resistant to automation in the foreseeable future.
The accountancy profession involves more than bookkeeping roles today. The core competencies and skills of an accountant provide a strong foundation to go into many other high-growth fields of specialisation and trades, and even as entrepreneurs. The use of analytics, as discussed earlier, is but one example of how the accounting professional can work hand in hand with technology to raise the value of their work in the near term.
There is little reason to believe that the accounting profession will die out as a result of technological disruption. The profession has not only survived but also transformed itself since the onset of the digital revolution, and will continue to do so. There are also bountiful opportunities in the region. Businesses in the Asean region will need accountants and finance professionals to support their growth, and most emerging markets are short of these professionals. Singapore accountants are well equipped to take on these roles.
Lee Fook Chiew is chief executive officer and Loke Hoe Yeong is manager of insights and intelligence at the Institute of Singapore Chartered Accountants.
We have been experiencing some problems with subscriber log-ins and apologise for the inconvenience caused. Until we resolve the issues, subscribers need not log in to access ST Digital articles. But a log-in is still required for our PDFs.