Is accountancy heading for extinction?

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“For an accountant, the probability of vocational extinction is a whopping 95%."

The starting point for this article was the publication of WTF, a recently released and very readable state of the nation analysis by popular TV pundit and economist Robert Peston.

In it, the left-leaning journalist tries to make sense of all that has happened on the political front in the last two years, primarily focusing on Britain’s decision to leave Europe and its impact on Theresa May’s government particularly in the light of her disastrous decision to call a general election last summer.

He then goes on to consider some connections with the elections of Donald Trump in the United States and Emanuel Macron in France and the populist anti-establishment feelings that led to each of these outcomes.

However, the real focus for those of us who have spent their lives working in the accounting profession and expect to get a few more profitable and enjoyable years in the business prior to retirement, is the quote at the head of this column.

It does not come from the finance director of an angry client that has just had its accounts qualified, nor an individual who has discovered that the tax-saving scheme which came with a guarantee that was not a guarantee has failed, leaving a bill of embarrassingly large proportions before the inevitable interest and penalties.

The statement was actually made by Andy Haldane, the Bank of England’s chief economist at the Trades Union Congress in November 2015. Apologies for not picking the news up earlier, but while this columnist is happy to read discursive books about how the country is going down the pan at a rate of knots, reports of TUC shindigs have a mysterious tendency to pass him by.

If Mr Haldane is correct, then at some unstated future date, accountancy as a profession will practically disappear without trace. His logic is that almost all of the tasks that are our worthy colleagues carry out could be displaced by dispassionate computers, which will never tire or make the kind of basic errors that drive clients mad.

This inevitably begs a whole series of questions but, at this stage, very few answers. It is already obvious that many parts of our work have changed beyond recognition in the last couple of decades.

Nowadays, much of auditing is computer-based, which provides an indication of how things are likely to develop. Similarly, there cannot be many practices that still prepare tax returns on paper other than in very limited circumstances. Not only is proprietary software very cheap but many of us (and our clients) complete tax returns online using HMRC’s free software.

The same applies to many other aspects of the trade, leaving us all to ponder how we or more pertinently our new recruits will manage to find work as the computerisation of additional tasks takes away more and more jobs.

There are probably at least two areas where human beings will continue to have the edge over technology in the foreseeable future. Whether these eventually comprise a mere 5% of all work or significantly more only time will tell.

Much tax planning and other strategic decision-making could theoretically be handed over to a hard drive but, in reality, there will need to be several generational shifts before human beings in senior positions are willing to accept advice from a machine which will not engage in conversation in preference to a trusted professional.

In addition, the primary duties that partners have carried out since time immemorial really do require human input. Whether it is wining and dining clients, conjuring up fees, dealing with complaints or trying to drum up new business, it is unclear how the soft side of our work could ever be overtaken by lumps of metal or plastic, however brainy.

This then opens up a further area of uncertainty. If the only jobs left in accountancy are those carried out by highly experienced partners who have spent their lives building up knowledge and relationships, how can the profession enable future generations to develop these skills if no junior jobs exist?

Humble readers can come to their own conclusions but thankfully it seems unlikely that the accounting profession will go out of business during my lifetime.

About Philip Fisher

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14th Feb 2018 09:51

The WTF publication seems aptly named!

I guessed the game was up when I realised accountants never seem to get a mention in sci-fi. Mr Spock was never heard to utter, "it's double entry Jim, but not as we know it". Or a scene where a tax investigation is cut short by Obi Wan Kenobi telling the tax inspector "these aren't the tax avoidance schemes you're looking for".

I suppose that after 3000 years we have had a good run for our money!

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14th Feb 2018 10:32

At the moment, computerised solutions can only do stuff according to a specific set of rules.

Planning to suit their own specific life circumstances and weighing up all the options is still beyond the capabilities of AI. As such, these still very much require the human perspective.

Whilst I have no doubt that machine learning will continue to grow, and at some point will be capable of this, i hardly think it's imminent, and I certainly don't expect it before I retire in 14 years.

And I say this as a died in the wool geek.

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to SteLacca
16th Feb 2018 12:01

[quote=SteLacca]
"

Planning to suit their own specific life circumstances and weighing up all the options is still beyond the capabilities of AI. As such, these still very much require the human perspective.

"

AI does not actually exist as yet: what we have are a mix of algorithmic based decision making, Expert Systems and Neural Networks.

The ignorant media, egged on by ICT firms (mainly consultants!) trying to push their latest wunderkind, falsely describe any smart system as "AI".

Which it isn't.

To achieve real AI will take massive processor power and
speed.

https://en.wikipedia.org/wiki/Massively_parallel

Here we are; just $273 Million.

Every small practice can afford one......

https://www.google.co.uk/search?q=sunway+taihulight+cost&sa=X&ved=0ahUKE...

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14th Feb 2018 12:29

Having been doing this stuff for 40 odd years, the above pretty much matches my own experience.

On the numbers side (ie tax and accounts) whilst my clients still get it from my mouth or keyboard, I am getting it from a machine, whether it be by calculation or reference material.

So, the valuable/enjoyable bit, that emanates from my internal processing, tends to be from experience of how people and organisations work and the quirky bits that AI has yet to master.

In all the changes in our industry I've seen, one important element perhaps not considered by Robert Peston, is that of the accountant's self-interest & fear.

Most of my clients still tend to look to me to instigate change and best practice when it comes to their numbers and information processing but many firms I've come across over the years tend to use that reliance to either avoid pressure to change and/or to keep their clients in the dark.

So whilst there is already a huge amount of technology and working practice out there that can reduce the amount of "work" that needs doing to process data and advise, the accountant is in the position to perpetuate inertia and so delay the onset of extinction or, maybe, an easier life.

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By Locutus
15th Feb 2018 09:29

I started my career over 25 years ago.

As a junior, I spent many hours casting and cross-casting hand written cashbooks using an adding machine.

Another of my jobs was to collate and distribute the income tax assessments to people in my group - many of which were just estimated, as the hand written tax return just contained the words “per a/cs” and “per P60”.

Another of my jobs, if I could not find any other work was to do the filing, for the typist copy letters, tax returns, assessments, etc. There were something like 20 large filing cabinets in my group.

All companies required a audit, which was often pretty basic as there were so many companies to do.

Over 25 years, this has completely changed - some due to technology, others dues to law and regulation. However, there still seems to be plenty of work for all of us accountants - just different work.

I expect the next 25 years will follow a similar pattern of change. But I still think there will be plenty of demand for us somewhere in the process.

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16th Feb 2018 10:34

No.

If you need an explanation, then you don't understand what accountant's do for their clients.

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16th Feb 2018 11:16

This is codswallop. Do you think that improvements in CAD-CAM systems will make engineers redundant, or that doctors will be replaced by expert diagnosis systems? No, these are merely tools that make the professional more productive. Since the start of my career (in 1986) I have heard every year some prediction of how few accountants we will need in future, but the number of accountants has continually grown in that time!

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to JDBENJAMIN
16th Feb 2018 12:13

"codswallop"? either you're showing your age or you want to avoid (***)?

Perhaps then the question is more along the lines of "is today's accountancy heading for extinction?"

Pretty much none of my accountancy from the 70s, 80s, and 90s still exists and I have spent the past 5 years educating clients to be self sufficient with their numbers and in giving general business advice and so, if it wasn't for my retirement, I'd see myself doing very little typical accountancy in a few years time.

Since the abolition of audit, investment advice and insolvency work for most accountants, we have been the poor relatives of the other professions you look to compare us with.

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19th Feb 2018 08:41

The reason this is nonsense is that the prediction confuses two things.

1 - How accountants currently generate data for use in tax returns, accounts and forecasts etc
And
2 - The value accountants could be providing to clients by spending more time looking forwards than backwards.

These predictions often refer more to in-house finance teams rather than accountants in practice. But the media reports do not know to make any distinction.

The day to day activities of what accountants in practice do will continue to evolve. But the profession as such will not become extinct. At least not in the next 30 years.

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to bookmarklee
19th Feb 2018 10:51

Hi Mark - I don't think it, or the data behind it (see below), is confusing the two things, rather it's stating the obvious that your "1" (expanded to include all data processing work currently undertaken by accounting types) is at increasing risk of automation and therefore redundancy.

Your "2" ie Dodos need to evolve to run, is not the subject of the article.

All it's suggesting is that, as with the dinosaurs before us, today's accountants will not exist in 10 years time.

http://www.bbc.co.uk/news/technology-34066941

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