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Accounting Industry Confronts Talent Gap, Tech Disruption and ESG Pressures

Denise Lugo  Editor, Accounting and Compliance Alert

· 5 minute read

Denise Lugo  Editor, Accounting and Compliance Alert

· 5 minute read

The accounting industry is facing a triple threat of challenges, including a looming talent gap, rapid technological change, and the complexities of environmental, social, and governance (ESG) reporting, according to a roundtable discussion of top controllers on June 6, 2024.

Controllers emphasized the urgency of talent development, data governance, and adaptability in response to regulatory changes, speaking at the 42nd Annual SEC and Financial Reporting Conference, held by the University of Southern California (USC) and Financial Executives International (FEI). Amidst a decline in students entering the accounting field, finance leaders stressed the need to attract top talent, highlighting a critical issue facing the industry.

“I think the designation for the CPA is critical. It’s critical for many reasons. It’s a bad day when nobody wants to write a report, and it’s not going to be done by AI,” said Steve Rivera, Vice President of Global Technical Accounting at Johnson & Johnson, highlighting the value of the Certified Public Accountant (CPA) designation. “You need real people to come and do it the right way.”

The panel, moderated by Rivera, featured Matt Busch, Vice President, Finance, Chief Accounting Officer at Amgen, David Fabricant, Executive Vice President, Deputy Corporate Controller at American Express, Brent Woodford, Executive Vice President, Controllership, Finance and Tax at The Walt Disney Company, and Vickie Wong, Senior Vice President, Chief Accounting Officer at Cisco Systems.

The discussion emphasized the importance of adaptability, continuous learning, and strategic thinking in the evolving field of accounting. As the profession continues to navigate the complexities of regulatory compliance and remote work dynamics, these skills will be crucial for success, the executives said.

Tech Disruption Accelerates

The panel flagged the rapid pace of technological change as transformative to the accounting industry, with automation and artificial intelligence (AI) set to revolutionize traditional practices.

“Ideally, I don’t want my accountants being transactional. They don’t need to be. They need to understand it but they don’t need to perform it. I want them to be analytical,” said Fabricant, emphasizing the need for accountants to develop new skills.

Data governance is also becoming a critical issue, with companies recognizing the importance of ensuring data integrity and accuracy in the face of increasing automation. “We have a governance board where we go through each change and we go through and talk about it and make sure it gets approved,” said Wong.

ESG Pressures Mount

On the growing importance of ESG, panelists addressed the role accounting and finance professionals play in tackling these challenges.

Woodford said his team is still in the early stages of navigating the European ESG regulations, which he finds highly challenging. “I think the real question is, when does something move from sustainability people into a controllership or control type of process? I think we’re trying to figure that out,” he said.

Similarly, Wong raised concerns about the confusion caused by different ESG rules and the potential implications of changing previously set goals. “And there’s a lot of discussion around, hey, if I put something out there, and by the way, I came up with these things, you know, several years ago, and this goal is, you know, 10, 20 years out, and you’re kind of realizing, hey, does that really make sense or not?” she said.

Implementing Rules and Regulations

Panelists also flagged the implementation of new accounting standards and regulatory requirements as an ongoing struggle, with a pressing need for clarity and consistency in financial reporting and disclosures.

Busch emphasized the importance of having the right people with the right talent, understanding of accounting standards, and knowledge of the business to implement the new standards effectively. He also highlighted the need for a communication process and the use of technology to gather and manage data. “I go back to people, processes, and technology and say as I think about those standards that are out there, do I have the right people, do I have the right talent?” he said.

The discussions also touched on the shift to remote work, which has introduced new challenges and opportunities for accounting professionals. Panelists said their companies are exploring innovative ways to maintain productivity and engagement among distributed workforces, including the strategic use of technology for collaboration and communication.

 

This article originally appeared in the June 11, 2024, edition of Accounting & Compliance Alert, available on Checkpoint.

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