It is a no-brainer that the dynamism of the business operations landscape in the finance and accounting profession is becoming more complex by the day.
On the one hand, professional teams must come to grips with diverse aspects such as increased competition, fluctuating currencies, rising costs, more regulated supply chains, the devastating COVID-19 pandemic and the various impacts of enhanced digitization, etc.
On the other hand, there is the need to make sense of the enormous data streams wrapped in their own technologies, such as artificial intelligence and big data.
If this was not enough, the gradual mainstreaming of cryptocurrencies into the business ecosystem and the emergence of non-fungible tokens are throwing the profession a curveball.
These are all situations that traditional chief financial officers and their teams were not entirely equipped to handle and most often arise in short or without notice.
There are also significantly stricter regulatory compliances that these teams must endure. As firms reengage with the marketplace and focus on enhancing performance and boosting growth post-pandemic, alignment with corporate governance is another crucial factor.
From risk and compliance management to fraud management and regulatory monitoring and reporting, F&A teams need to be always on top of this and more.
Challenged as they are to keep up with this complexity, there is also the added burden of assisting entry-level employees in coming up to speed, unfolding another challenge: the emerging skills gap at multiple levels of the business.
CFOs and their teams see many accounting applicants joining the profession with basic skills — usually limited to entry-level tax and audit work. As a result, there is a dearth of skills to lead teams and drive the business forward.
This reduced influx of adequately, if not highly, skilled F&A employees make it nearly impossible to effectively fill key accounting positions inside organizations, thus hampering performance, growth and economic expansion.
Left unsolved, this “entry-level economy” could seriously affect the F&A domain across industries and sectors. But there are solutions to the problem. The focus is on academia revitalizing age-old curriculums and teaching methodologies to integrate contemporary and industry-aligned subject matter information.
For the F&A domain, colleges and universities must introduce management accounting into the finance and business management streams to ensure that students come face-to-face with a business-ready approach to financial management.
For many years, the traditional accounting curriculum has struggled to keep up with technological advances and changing CFO requirements.
There is a need for a new breed of accountants with skill sets that allow them to become value creators and business partners to plug the existing skills gap and secure the profession’s future.
Consequently, there is the need for an integrated approach to curriculums, competencies and training that aligns with how business is conducted for sustainable value creation.
Much of this effectively begins in the classroom. However, until recently, the curriculum was too narrowly focused on financial accounting, specializing in audit, tax, statutory reporting and compliance.
Many young professionals begin their careers at public accounting firms doing audit and tax work. But, when they move into management accounting or consulting and advisory roles, where the focus is on value creation, they find out they do not have the required skills to understand business operations and provide strategic value-addition to the business.
In comparison, management accounting differs from financial accounting because the intended purpose of management accounting is to assist users internally in making well-informed business decisions.
The need to increase and foster industry-academia partnerships is imperative to the success of the future of the F&A functions and the professional world at large.
Increased involvement of industry professionals in the classroom provides an array of opportunities for students to learn real-world applications. However, markets are also changing more rapidly than before, requiring graduates who are more agile and capable of dealing with such changes.
Top business schools are transforming their curriculums and pedagogies to achieve this agility and be more inclusive of relevant topics beyond traditional financial statements that affect corporations today.
This fusion of theory and practice accelerates the learning curve for students and equips them with the necessary skill sets preparing them for the professional world. Despite that, what remains to be seen is the future role of educational institutions in fulfilling the constantly evolving requirements of the private sector.
As the accounting profession shifts away from traditional auditing, statutory reporting and compliance and takes on a more managerial hue that aids in value creation, it has spurred a demand for multi-talented professionals with broader skill sets across accounting, finance, technology, operations and leadership.
These professionals are equipped with skillsets not easily automated, such as advisory services, decision-making, strategy and communications. As the digital revolution progresses, CFOs increasingly value soft skills such as emotional intelligence and the ability to evaluate situations quickly and communicate effectively. At a more technical level, these professionals will also need to leverage the potential of AI, including cognitive computing and machine learning.
As more institutes offer management accounting courses and an increasing number of CFOs hire management accountants, it is also essential for businesses to invest in the professional development of their existing F&A teams to bolster their planning, leadership and other skills.
According to the World Economic Forum’s Future of Jobs 2020 Report, 54 percent of large organizations’ employees need significant reskilling and upskilling to keep pace with rapidly transforming markets.
Many organizations have found that mentor programs, internship programs, apprenticeships and certification support have created accounting and finance talent with the ability to provide value across departments and decision support at the management table.
Expanding accountants’ knowledge base will allow them to adapt to abrupt changes. Ultimately, it will translate into greater performance and profitability for companies. Therefore, the task at hand is one of collaborative effort that requires the academic, public and private sectors to identify the set of skills needed to cut it soon and, in turn, prepare the next generation not only to succeed but to thrive.
• Taha Nasir is assistant director at the KBS Business Engagement Office and faculty member of the Department of Accounting & Finance, KFUPM.
• Ahmad Mkhallati is director of regional partners’ relations, IMA.
