Why your child won’t be an accountant
Seriously. Your child won’t be an accountant.
Not because your child wants to go into some other profession.
Even if your child loves what you do as an accountant today, is inspired by you and wants to follow your footsteps in the accounting profession, your child won’t be an accountant.
According to “The Future of Employment: How susceptible are jobs to computerisation?” research report from the Oxford Martin School (a research and policy unit of the world-renowned University of Oxford), technology will create the danger of replacing:
- 94 percent of accountants and auditors;
- 97 percent of payroll and timekeeping clerks;
- 98 percent of bookkeepers/bookkeeping, accounting, and auditing clerks; and,
- 99 percent of tax preparers.
That is scary!
THE GOOD NEWS
Let us dive a bit deeper into what exactly is in the danger of being replaced by technology. It is not that technology will replace “accountants and auditors.” It is what they do as work that is being examined for possibilities of replacement by technology.
And therein lies the good news.
Interestingly, the American Institute of CPAs has focused its descriptions more on the “impacts” that accountants’ work has on their clients’ lives and businesses. For example, the institute says, “Accounting deals with interpreting and communicating information, which, as interpreted by CPAs, allows executives to make informed business decisions-decisions that help those companies become more successful. ….Accounting links the past with the future. …. A CPA is a trusted financial advisor who helps individuals, businesses, and other organizations plan and reach their financial goals.”
But it appears that the replacement potentials are based not on the AICPA’s description but on some other definitions of the occupations of “Accountants and Auditors” that need serious updating.
Here is how narrowly these accounting profession-related occupations are defined (mainly because accounting professionals were indeed performing the activities and tasks mentioned in these definitions).
According to the U.S. Bureau of Labor Statistics:
- 13-2011 Accountants and Auditors. Examine, analyze, and interpret accounting records to prepare financial statements, give advice, or audit and evaluate statements prepared by others. Install or advise on systems of recording costs or other financial and budgetary data.
- 43-3031 Bookkeeping, Accounting, and Auditing Clerks. Compute, classify, and record numerical data to keep financial records complete. Perform any combination of routine calculating, posting, and verifying duties to obtain primary financial data for use in maintaining accounting records. May also check the accuracy of figures, calculations, and postings pertaining to business transactions recorded by other workers.
- 13-2082 Tax Preparers. Prepare tax returns for individuals or small businesses.
- 43-3051 Payroll and Timekeeping Clerks. Compile and record employee time and payroll data. May compute employees’ time worked, production, and commission. May compute and post wages and deductions, or prepare paychecks.
Fortunately, there is a key flaw in the calculation of replacement potential projections. The replacement potential percentages mentioned above are based on these narrow (and seemingly somewhat outdated) definitions of what these professionals (are assumed to) do. The AICPA’s “impact-driven” descriptions do not seem to have been fully considered in these projections. This flaw has skewed the replacement potential percentages way beyond realistic estimates, which, fortunately, is a good news!
In my experience of working with accounting professionals day in and day out, they do far more than what is mentioned in these definitions. Their roles are evolving. The positive impacts they deliver on the lives of their clients are also evolving. These definitions/descriptions do not truly capture the new and evolved functions accounting professionals perform.
Hence, the good news is that these high-percentage, grim-looking projections of replacement potential are not truly reflective of the replacement of accounting professionals. At best, these percentages may, somewhat, reflect the replacement potential of what accounting professionals do as described in these definitions. In other words, there are no predictive models to show what future accountants will do that capture the essence of the evolving roles and responsibilities of accountants.
I mentioned that accounting professionals were indeed performing the activities and tasks. They are, increasingly, not performing these activities and tasks, as technology has evolved to do some of them. But, for whatever reasons, the definitions to describe these occupations have not evolved, at least at the same pace as technology has evolved to make a serious dent in what humans did in these professions.
Let's distill what accountants, auditors, bookkeepers, payroll processors and tax preparers did as work: examine, analyze, interpret, prepare, give advice, audit, evaluate, install or advise on systems, compute, classify, record, keep records complete, calculate, post, verify, obtain primary financial data, maintain accounting records, check the accuracy, prepare tax returns, compile and record time and payroll data, compute time worked, compute production, and commission, compute and post wages and deductions, or prepare paychecks.
Now, think how many of these things the software you use at your firm do right now. Take a look at how Blockchain can impact several of these tasks.
Next, think of how many of the tasks you and your people do that are not currently included in the above list.
You now know that all these “definitions and descriptions” do need serious change – like seriously quickly. Do you agree?
Honestly, if your children – mostly Gen Y and Gen Z - are reading the current definitions of these jobs, not only are they getting perplexed (“Why aren’t these tasks being done by technology?”) but they are also getting disillusioned about what you – their parents – are doing as accounting professionals. Your child would not want to do those things that define these occupations. The perceptions of what accountants do are far from reality. And perceptions will drive away new talent from the profession.
It is year 2017. The time has come to more accurately define what accountants, auditors, bookkeepers and tax preparers do. Otherwise, the perceptions caused by these current definitions are extremely potent in their ability to scare the future generations away from the accounting profession. The very same perceptions will make future clients wonder why should they go to accountants if technology ends up doing everything that clients perceive accountants are doing. According to the AICPA’s PCPS Top Issues Survey 2017, “finding qualified staff (at all levels) and retaining qualified staff” are among the top five issues for firms of all sizes. Perception about the accounting profession is surely one of the key causes that have accentuated this talent issue.
Your child won’t be an accountant – certainly not as per the current definitions and descriptions of what “accountants” do.
What should be the new definitions and descriptions?