If Singapore is to achieve its goal of becoming a global accountancy hub by 2020, accountants must be prepared to innovate and harness the power of technology
This article was first published in the January 2018 Singapore edition of Accounting and Business magazine.
As part of its aim to transform the city-state into a global accountancy hub by 2020, Singapore’s government has implemented a number of policies that aim to strengthen the regulatory framework. But changes in accounting regulations alone will not be sufficient, Indranee Rajah, Singapore’s senior minister of state for law and finance, has warned. ‘As the use of technology in the workplace intensifies, firms must innovate and use more technology to offer higher-value, insight-driven services,’ she told the Singapore Accountancy and Audit Convention last October, adding that ‘to stay relevant, it is crucial for the profession to transform and adapt’.
As a carrot to the regulatory stick, government bodies have introduced initiatives to energise the profession, the latest of which aim to help accountants better face the impact of the current digital disruptions on the profession.
‘A future-ready workforce and business environment is one with individuals having the right skills and businesses that constantly innovate,’ says Evan Law, CEO of the Singapore Accountancy Commission (SAC). ‘This is critical for Singapore as we develop into a centre for high-value-adding professional accountancy services.’
Frameworks for the future
The Skills Framework for Accountancy, developed by the SAC in collaboration with SkillsFuture Singapore and Workforce Singapore, provides an overview of the career pathways covering 25 job roles, with six tracks: business valuation, financial accounting, assurance, internal audit, management accounting and tax. The framework also identifies 84 current and emerging skills required for roles in the sector. This will serve as a guide for individuals ‘who wish to understand how they can stay relevant and benefit from new opportunities in the sector’, explains Ng Cher Pong, CEO, SkillsFuture Singapore.
Meanwhile, the SAPPHIRE initiative, offered by the Singapore National Employers Federation, helps firms adopt the Skills Framework and integrate technology in the workplace by offering subsidies of up to 70% for up to 100 hours of consultancy advice per project, covering areas like HR, learning and technology.
Yang Chi Chih, audit and assurance talent leader at Deloitte Singapore, says that while the Skills Framework has identified key skills and competencies for the sector, SAPPHIRE targets the human software required to build a sustainable organisation: ‘Both are important in helping to position Singapore as a leading global accountancy hub as they support companies in becoming world-class organisations through transformation of the workplace,’ he says.
‘The two frameworks support the design of training programmes for skills and career development by creating a common language for the various stakeholders in the profession,’ Yang adds. ‘This will catapult professionals and aspiring students to greater heights as they make use of the resources and infrastructure made available by these frameworks to increase their knowledge and improve skillsets.’
These initiatives are timely as the Skills Framework includes emerging areas such as data analytics, infocomm technology adoption and innovation, among others, where disruption has already started to augment how accountants function today.
Back-office accounting jobs are already being replaced by technology and a 2015 survey by the World Economic Forum suggested that up to 30% of corporate audits could be performed by artificial intelligence (AI) by 2025. Yet a 2016 survey by the Institute of Singapore Chartered Accountants revealed that only two in three audit firms in Singapore use software technology in their day-to-day operations. With the pace of change expected to accelerate, the gaps quickly need to be filled.
Joseph Alfred, head of policy at ACCA Singapore, believes businesses are probably ‘underestimating the impact of AI, which will likely be the most disruptive force in terms of its impact on the work of all professionals, including professional accountants’.
‘The skills that are critical are those that will enable a professional accountant to work with AI and robotics as an integrated “team” – complementing the strengths of humans with artificial intelligence. This holistic augmented intelligence will eventually be developed and function in a mixed or augmented reality environment in the workplace,’ Alfred predicts.
Although still in its relative infancy, AI is already being used by some practices to help improve the audit process. Marcus Lam, assurance leader at PwC Singapore, says that the firm has piloted the use of AI to spot patterns and anomalies in large bodies of structured data. ‘Any problems identified are recognised and remembered by the machine, which then learns from its experiences and applies the learning to the next set of data,’ he explains. ‘As the business world continues to tap such new technologies, we will continue to see transformation and audits will continue to evolve.’
PwC has pioneered the use of AI in auditing through a partnership with H2O.ai, a Silicon Valley-based company: ‘PwC’s GL.ai, the first module of PwC’s Audit.ai, analyses billions of different data points in seconds and applies judgment to detect anomalies in general ledger transactions,’ Lam explains.
Meanwhile, Vincent Toong, an assurance partner at EY, points out that the new EY Lease Reviewer leverages AI to extract information from lease contracts using statistical and basic text analysis.
‘The technology allows teams to start grouping contracts together based on words and phrases used, which can then be analysed more effectively. This improves quality and efficiency by supporting smarter management of non-routine transactions and processes by our teams,’ Toong explains, adding that EY has also invested in other emerging technologies such as advanced data analytics, blockchain, drones and robotic process automation.
Support for SMEs
The SAPPHIRE scheme is expected to be particularly helpful to SMEs, allowing them to leverage technology to build sustainable practices.
‘I am very appreciative when measures such as SAPPHIRE are introduced,’ says Asha Dixit, managing director at Money Matters for Expats. ‘It shows that the government understands the requirement of SMEs, which generate so much employment. We are definitely interested in some of the programmes, especially the Technology-Enabled Workspace and the Lean Operations Workspace transformation.’
Dixit’s practice has started using online accounting software such as QuickBooks and Xero to support clients: ‘The process of updating accounts, reviewing, generating reports – all bread and butter to accounting firms – becomes so much more efficient,’ she says.
‘These initiatives complement professional qualifications, such as ACCA’s, to mould and shape individuals to thrive in a digital environment,’ Alfred says, pointing out that ACCA recently launched the Ethics and Professional Skills module to bring ethics to the forefront of the future digital economy in which professional accountants will be immersed.
Lam notes that technology is revolutionising the way businesses work: ‘As they start better leveraging their financial statement data to make better business decisions, and as they continue to tap into new technologies, the accountancy profession will continue to see transformation and audits will continue to evolve.’
‘With technology evolving at such a fast pace, we must be ready for change and be ready to embed new and more advanced technologies in the profession to stay relevant in the marketplace, and also to our clients,’ says Sanjay Panjabi, audit and assurance innovation and analytics leader at Deloitte Singapore. ‘We need to embrace technology and acquire new skillsets to remain relevant. This includes staying up to date with technological trends, and being open to accepting and learning advancing technologies.’
Law, meanwhile, is hoping that individuals and businesses will make good use of the Skills Framework and the SAPPHIRE programme ‘as they are designed to develop the potential to capture growth opportunities locally and in the region’.
Sonia Kolesnikov-Jessop, journalist
"A future-ready workforce and business environment is one with individuals having the right skills and businesses that constantly innovate"