Comments /421 Views / Tuesday, 18 July 2017 00:28
By Uditha Jayasinghe
Management accountants have to keep up with rapidly evolving technology by transforming themselves into prophets who can understand future trends in a global marketplace or risk becoming dinosaurs, top experts warned yesterday, but insisted that improving skills would assist companies to grow and governments to combat corruption.
Addressing the inauguration of the CMA Excellence in Integrated Reporting Awards and National Management Accounting Conference 2017, CMA President Prof. Lakshman R. Watawala made a rallying call to Management Accountants to embrace digitisation and integrated reporting. Sri Lanka’s private sector cannot afford to miss out on the global wave taking the sector forward and local companies risked being left behind in the global march towards new and better ways of developing accounting.
Prophets of the future
“It is not just the private sector. This is also very important for the public sector. Unfortunately we received only a few applications from them and even that was from State banks. But if integrated reporting is implemented then people would be able to see where public monies are flowing and how they are being used. That would be a huge step forward in fighting corruption,” he said.
Prof. Watawala also noted integrated reporting should be made mandatory and CMA would assist any Government department or institution interested in setting up the system. Management accounts have the responsibility of providing insights on how a company should run and how it can grow, thereby making the profession an indispensible component of the economy. The conference would lay the foundation for the path ahead and allow companies to absorb digitisation that would be both cost-saving and a solution to the private sector.
“We need proper systems for the country to move forward. Focus on a digital education would help Sri Lanka. We all know that about 150,000 students pass the Advanced Level exams each year but only 25,000 of them enter public universities. We need to bridge this gap. Recently the President was in Bangladesh and we remember how decades earlier they only had 36 national universities but now they have hundreds. India has thousands. With just Rs. 750 million the Government can establish a digital education platform that would train and provide skills to thousands of youth. I strongly feel such a step would be essential if Sri Lanka is to become a knowledge economy.”
An independent civil service is at the core of development, stressed Prof. Watawala, who recalled how Singapore and Malaysia sourced public employees from Sri Lanka in the 1970s. However, gradual politicisation encroached on their independence until Sri Lanka was faced with its present “pathetic situation”, he added.
The CMA President called on the Government to reintroduce independence to the public service in the proposed new Constitution and emphasised it would be one of the most important elements to effecting a genuine turnaround for the country.
Adapt or die
Taking the example of Facebook and Nokia, Singapore Institute of Technology Assistant Provost Skills Future and Staff Development Prof. Ho Yew Kee made a riveting presentation on the challenges faced by management accountants and their urgent need to evolve into strategists.
Delivering the keynote address Prof. Kee recalled how Nokia, once a giant in the mobile world, rapidly descended into oblivion because it was unable to keep pace with android technology. As people spend more and more time on smartphones, connected to the internet and exchange goods and services on the internet, it is imperative for management accountants to also find new ways to maintain their value in a fast digitising world.
“Much of what an account does is compile and analyse data. But now we have algorithms that collect data in real time and process it in real time. Companies can now reduce their accounting cost by two-thirds if they use digitising tools. So what will happen to the jobs of management accountants? This could happen within the next decade.”
Many companies, he said, had already moved on to or are considering Robotic Process Automation to increase efficiency and track market data faster in real time.
As computers collate and analyse data faster than any human can, the challenge is to find how people can combat the cloud. In Prof. Kee’s view the best option for management accountants is to morph into strategists who use their relationship building, negotiation skills, leadership and critical thinking to make unpredictable subjective decisions. They can use unstructured knowledge to spot future trends and changes before they happen.
“This is the brave new world. This is what we must teach ourselves and our students - how to survive online accounting. There are many reasons as to why businesses do not want to do this. They think ‘why tinker with a working system?’ They are nervous about security; they think there are no real benefits. They are afraid of potential disruptions. They think ‘why trouble until trouble troubles you?’
“Digitisation is how the world turns. Either we can be surprised by the turns or we can predict the turns,” he said.
Digitisation and integrated reporting has helped Malaysia fight corruption and create a more transparent system that is trusted by the public, said Malaysia Prime Minister’s Department International Strategic Cooperation Unit CEO Ravindran Devagunam.
Speaking on the topic of ‘Overseeing Corruption Related Initiatives of the National Key Result Areas (NKRA) of Prime Minister of Malaysia’, Devagunam outlined how his unit custom-built an online system that incorporated key ministers and went right to the Prime Minister.
“One cannot talk about good governance without integrity,” he said when kicking off his presentation. “Every Friday we would upload the key information on a project to the system that could be viewed by all Cabinet ministers and the Prime Minister. For example this gave the capacity for the Prime Minister to see that a transport project has been lagging behind for three weeks and demand an update at the next Cabinet briefing. This system meant that everything could be tracked and reported on by the media and other stakeholders parallel to developments taken by policymakers.”
The same system was used to tackle corruption among the police who, because they had a high frequency of engagement with the public, were perceived to be very corrupt. An implementation taskforce was established that was headed by the deputy Prime Minister, who would call a meeting of all the heads of institutions under each ministry and after just a 25-minute presentation give instructions of steps to be taken.
The results of the program were also evaluated and reduction of corruption in key sectors was tracked. The presentation gave insights into the innovative ways that a Government could use accounting, integrated reporting and technology to fight corruption transparently and effectively.
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