Jun 2017

Forecasting the future of Australian Compliance

By: Odyssey General
Tags: Blackswan, compliance, future

Nassim Taleb was credited with the black swan theory and indicated that the black swan event depends on the observer. So in respect of the turkey and the butcher, the outcome is the same, but the event is not a black swan event to the butcher. The object then is not to become the turkey.

A turkey is fed for 1,000 days by a butcher, and every day confirms to the turkey and the turkey’s economics department and the turkey’s risk management department and the turkey’s analytical department that the butcher loves turkeys, and every day brings more confidence to the statement. But on day 1,001 there will be a surprise for the turkey..

In “The End of Jobs”, Taylor Pearson mentions the Black Swan Theory, and notes “The Turkey Problem means accounting may be the riskiest profession in the 21st century while entrepreneurship may be the safest.”

As more people hit the workforce with higher levels of education, at the same time we’re seeing difficulties in finding work. Even when work is found, there is no guarantee of salary raises, especially in Australia’s current economic situation of stagnant wages. At the same time as everyone has higher levels of education in Australia, the Australian accounting profession is under pressure from automation in new software, together with increasing competition from offshore via globalisation vis a vis the connected world we now live in.

Certainly there seems more attractiveness to the younger Australians coming out into industry. Take the safe path and earn a small percentage increase each year, or take the entrepreneurial path and have a chance at riches. The message is clear for the younger generations: Jobs are getting more competitive and less profitable, while entrepreneurship is more accessible, safer and profitable than ever.

The extent to which automation will take away jobs is worth comparing to the banking sector. As ATM’s hit the banking sector, the cashiers moved away from cashier type roles, and into roles of increased importance, problem solving and relationships. And technology magnified their leverage. So the new role for banking staff involved increased importance, along with brining to bear expertise, judgement and creativity. This is covered in a great Ted Talks on Automation and the future of jobs.

There is no doubt a major shift is underway, and it behoves all involved in the Australian accounting industry to ensure the future of our profession, by engaging positively in a discussion with our training bodies, our new accountants, our older accountants, and accounting business owners.

It cannot be disputed that we continue to live in a time of disruption in the accounting arena. Automation and offshoring are impacting the future of compliance in Australia like never before, and at the same time Australian accountants are being encouraged to move into and offer new services.

The big question remains as to the speed at which change will happen, whether it will creep up on Australian compliance, or whether it will happen overnight.