Question

Comment on how is financial reporting regulation likely to change in the future with advancement in technologies in accounting.

Answer 1

The introduction of technology has made some major changes to the role of accountants. A lot of repetitious accounting tasks are now computerised,’ Dr Contessotto says. ‘Accountants are able to work with a lot less paper, relying on spreadsheets and software packages for much of their work.’

With technology bringing closer links with our international neighbours, accounting procedures around the world have aligned. ‘Globalisation has increased the standardisation of accounting practices around the world,’ Dr Contessotto says. ‘There are also increasing levels of regulation affecting the work of accountants. Things like cloud computing also has had an impact: accounting records are available anytime and anywhere.’

There has also been an increase in accountability across the profession. ‘The number of accounting, ethical and auditing standards have grown considerably over the years and have become increasingly more complex.

Three major Changes due to Technology

First, accountants will use increasingly sophisticated and smart technologies to enhance their traditional ways of working, and these technologies might even replace the traditional approach Smart software systems (including cloud computing) will support the trend toward outsourcing services (including more overseas outsourcing), and greater use of social media via smart technology will improve collaboration, disclosure, engagement with stakeholders and broader communities (see ACCA research, above). Social media (including Facebook, Twitter, and Google search) will reveal more data (including alternative reporting, see than any corporate assurance report and stakeholders will use tools to interpret “big data”

  

Second, continued globalization will create more opportunities and challenges for members of the accounting profession. While globalization encourages the free flow of money from one capital market to another, enhanced overseas outsourcing activities and the transfer of technical and professional skills will simultaneously continue to pose threats to resolving local problems (with different cultural, financial, and tax systems). Accounting firms in the US, EU, and Australia are outsourcing services to India and China for the purpose of cost minimization, which will create a shift in employment within the accounting industry in the West. As globalization has already been negatively impacted by Brexit and Trump’s presidential victory, accounting professionals are likely to see themselves having a role in this transformation

Third, increased regulation, and the associated disclosure rules, will have the greatest impact on the profession for years to come. For example, increased regulation is imminent because of massive tax avoidance, transfer pricing, and money laundering as exposed via the panama papers Many professional (tax) accountants will be affected by intergovernmental tax action to limit base erosion and profit-shifting.