Institute of Management Accountants president and CEO Jeff Thomson is predicting six mega trends in the finance and accounting profession this year.
They include an increasing amount of automation; remote work becoming the norm for finance teams; environmental, social and governance reporting growing in importance; finance professionals being held accountable for enterprise risk management; diversity, equity and inclusion becoming more of a competitive differentiator in addition to being the right thing to do; and increasing demand for upskilling and continuing education for professionals.
Many of the trends are ones seen last year and in years past, but are likely to grow in importance this year as organizations deal with the ongoing COVID-19 pandemic and face challenges in implementing technology and responding to demands for a diverse workforce and the threats posed by climate change.
Institute of Management Accountants president and CEO Jeff Thomson
Courtesy of the IMA
“Organizations and their CFOs have to continue to build their balance sheets, continue to invest in the future, build their talent pipeline, invest in automation and analytics, and service that pent up demand,” said Thomson. “Continue to build their teams and service that demand. Invest in technology, RPA and automation tools.”
Over the past year, he has seen remote work take hold as a way to cope with the pandemic, but some organizations are incorporating hybrid models combining two or three days of work in the office and two or three days of work from home.
“That means you have the automation tools, collaboration tools, discipline and taxonomies to make sure that people kind of understand the protocols,” said Thomson.
ESG reporting has grown in popularity as more companies try to demonstrate how they are responding to climate change and social issues in response to investor demands for greater accountability. Thomson sees value in plans for some of the standard-setters in this area, like the Sustainability Accounting Standards Board and the International Integrated Reporting Council, to merge together into a single organization that will be called the Value Reporting Foundation. SASB and the IIRC have also announced plans to work with other groups like the Global Reporting Initiative, the Carbon Disclosure Project, and the Climate Standards Disclosure Board to harmonize their standards. The International Financial Reporting Standards Foundation is considering a proposal to create an International Sustainability Standards Board that it would oversee alongside the International Accounting Standards Board (see story).
“There were so many organizations overlapping and overstepping each other, so that could bring some more clarity and consolidation to this,” said Thomson. “IMA has been calling for that for quite a long time.”
The reporting requirements should not be overly burdensome, however. “I am actually confident that the U.S. is beginning to understand the importance without creating an overbearing disclosure process,” said Thomson. “We don’t necessarily want to make this mandatory. We don’t want to create too much pressure or weight on the disclosures process in the U.S. We want to make it meaningful for investors, meaningful for corporates, without putting an overwhelming reporting burden on preparers. We want to find the right balance in the U.S. and around the world.”
Along with ESG issues, accountants will also be dealing more with enterprise risk management as they cope with challenges like the impact of COVID-19 and other disasters on their organizations.
“With enterprise risk management, organizations are trying to be more anticipatory of disasters,” said Thomson. “You can’t foresee a specific disaster, but you certainly should be building business continuity planning, disaster recovery and remote work policies.”
With the growth of the Black Lives Matter movement last year, organizations are seeing a greater need to increase their diversity efforts and to upskill their workers.
“Diversity, equity and inclusion are critical differentiators for organizations in the race for relevance of our profession,” said Thomson. “Technology is moving so quickly. It could cause some suppression of jobs at the low end. As jobs get automated away, what were transaction processing or routine repetitive types of jobs potentially get replaced by higher value-added analytics type of jobs, but only if we commit to upskilling and reskilling and diversifying our talent pool. That’s where that diversification of the talent pool comes into play. We have a lot of opportunities to leverage these megatrends in automation, remote work, ESG and DE&I in the overall talent pool.”
The IMA will be presenting a study Thursday that it conducted with the California Society of CPAs on diversity, equity and inclusion during a virtual event.
Thomson is hopeful about the year ahead. “I think 2021 will be a good year for our own sake as human beings, but I think 2021 is going to be a good year for the profession in many, many ways,” he said. “There are significant risks, but I think the profession has an incredible opportunity to show its mettle, its resilience and its adaptability.”