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Swinburne University of Technology Sarawak Campus

Embracing for the disruptive impact of industrial revolution 4.0 in accounting

January 16, 2019

by Wendy Chang

As the business world evolves in the Industrial Revolution 4.0 (IR4.0), the workplace can be expected to continue to be more volatile, uncertain, complex and ambiguous (VUCA). In his book The Fourth Industrial Revolution published in 2016, Founder and Executive Chairman of the World Economic Forum (WEF) Professor Klaus Schwab described this fourth revolution as characterised by advances in technology which fuses physical, digital and biological worlds.

Emerging from Germany in the first decade of the new millennium, the advances in automation, artificial intelligence (AI) and cloud technology have continually disrupted every industry in every country. By 2020, automation and artificial intelligence innovations are expected to displace humans in some five million jobs with repetitive, easy and tedious tasks.

This finding by the WEF is based on a survey of senior human resources officers and top strategy executives from companies across nine broad industry categories in 15 of the world’s largest economies including Australia, Brazil, China, France, Germany, India, Italy, Japan, Mexico, South Africa, Turkey, the United Kingdom and the United States, as well as the ASEAN and Gulf Corporation Council (GCC) groups. Together, they account for 65% of the global workforce.

Based on forecasts from human resources and current employment data in 2016, the WEF further reported that the ASEAN employment outlook will continue to be positive for the next few years. In the region, it is expected that about three jobs will be gained for every job lost.

However, the IR4.0 is borderless. It is only a matter of time when its disruptive impact will be felt regardless of the industry or geographical location of a workplace.

In June 2017, the Bloomberg Businessweek reported the best paid and most vulnerable occupation to the disruption of the IR4.0 is in accounting. This conclusion comes from numerous studies conducted in the United States, the United Kingdom and Europe.

Many more book-keepers and low-level accountants whose main daily tasks are recording business transactions for accounting entities can expect to lose their jobs in the coming decade because of automation. IR4.0 challenges the accounting profession. Yet within the revolution, there are opportunities for those prepared to embrace them.

Michio Kaku, an American futurist and theoretical physicist, predicted in 2013 that non-repetitive jobs which require a high level of pattern recognition will thrive. In another report, The Future of Jobs published in September 2018, the WEF supported his view.

Those considering a qualification in accounting should expect future careers that involve analysis, complex problem solving and critical thinking as well as coordination with or management of people to provide innovative solutions in different and changing business environments.

These skills require pattern recognition, emotional intelligence, cognitive flexibility, judgement and decision-making that are currently beyond AI. Thus, AI is unlikely to replace accountants with adaptability and business acumen in different social and economic environments.

Believing that the human ability to adapt quickly and be resilient to change or unfamiliarity is essential to thrive in a VUCA environment, Swinburne continuously reviews its academic programmes to develop and produce future-ready and adaptive graduates. In addition to equipping students with technical knowledge, training their minds to think is very much a part of university education.

Swinburne’s accounting curriculum emphasises on providing students opportunities during their undergraduate years to develop non-technical skills, especially competence in high order thinking skills for application beyond the campus.

Business decision-making tools are introduced from the first year to facilitate students’ learning of analysis and interpretation of financial information together with non-financial information from the real world.

The curriculum is also introducing cloud accounting so that learners will be comfortable with new digital connectivity as well as managing and sharing of real-time accounting information over web-based platforms. In cloud accounting, the business transactions of an accounting entity will still be recorded in compliance with generally accepted accounting principles and accounting standards but over the internet so that storage and access of the data will be from a remote server external to the entity.

A major concern in using cloud accounting is the security over business records and sensitive personal data kept in remote servers. However, remote servers have robust security protocols that mitigate hacking. Cloud accounting software also allows configurations to limit access to information by different users.

With a reliable internet connection, cloud accounting can offer lower operating costs and faster implementation with automatic upgrades of the cloud accounting software. It can enable decision-making that is more efficient and timely because information can be accessed anytime and anywhere by multiple users at different physical locations, using mobile devices over the internet.

Technological change will continually evolve in our lives. Its disruptive impact as part of IR4.0 cannot be ignored. We can only embrace the change and learn to tap into emerging opportunities to bring about advantageous economic impact for the society.

Wendy Chang is a senior lecturer from the Faculty of Business, Design and Arts at Swinburne University of Technology, Sarawak Campus. She can be reached via email at Wchang@swinburne.edu.my.