Strategies and Development Tools

Strategies and development tools that are appropriate for an accounting professional to sustain a competitive advantage in terms of employment and level of competence

 Although technology and digitals innovations have made huge advancements in the last few decades, it must be emphasised that the digital success isn’t only about technology. MIT Sloan Management Review and Deloitte (2015) identify strategy as the key success in this digital era. Therefore companies and businesses  that avoid risk-taking measures are unlikely to thrive and achieve competitive advantage.

The emergence of astounding  advances in data and information  technology provides better capacity and efficiency which enables the storage of vast amounts of information in the system (Lobo et.al, 2004). Biery (2017) suggests there are three major technological development tools which have gained ground particularly in the field of accounting. They are cloud based accounting, automation systems and blockchain accounting.

According to a survey by the National Management of Accounting Practice, many benefits can be gained by the adoption of cloud based technology such as efficiency in the business process, improved scalability, time and cost- savings as shown in Figure 1 below. Since 2014, there has been a wide and exponential adoption of cloud services in accounting firms. The survey reveals that the percentage of firms using cloud services has grown substantially from  29% in 2012 to 56% in  2016.

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                      Figure 1: Reported advantages of cloud technology

                      Source: (Strauss, Kristandl and Quinn, 2015)

Blockchain technology is potentially one of the most disruptive technologies to affect the entire business world particularly the accounting industry as it fundamentally changes the way transactions are made and recorded (Refer to Fig 2 below). It will disrupt the accounting industry by making certain practices and services obsolete. According to The World Economic Forum, 80 per cent of banks are likely to start blockchain projects this year, and over the past three years, US$1.4 billion has already been invested in the technology.

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Fig. 2 – Blockchain technology enables complete, conclusive verification without a trusted party

Source: Deloitte 2016

With the availability of blockchain technology, auditors are able to verify vast amounts of the data efficiently in a short time and carry out complex transactions and internal control. (Deloitte 2016). From the simplification of the compliance with statutory requirements to the enhancement of the prevalent double entry bookkeeping, the future for blockchain technology for accounting work is immensely promising.  However, the development of  this accounting system is still in its infancy stage compared to other industries due to its exceptionally strict regulatory requirements in respect to integrity and validity (Deloitte 2016).