The accounting industry in Africa and elsewhere is expected to grow fast in the coming years and create different employment opportunities, different studies suggest.
Globalisation, a growing economy, and a complex tax and regulatory environment are expected to continue to lead to a strong demand for accountants and auditors.
Employment growth of accountants and auditors is expected to be closely tied to the health of the overall economy. As the economy grows, these workers will continue to be needed to prepare and examine financial records.
As members of the Association of Chartered Certified Accountants (ACCA) in Africa were last week meeting in Kigali it was also indicated that as more companies go public, there will be a greater need for public accountants to handle the legally required financial documentation.
The continued globalisation of business may lead to increased demand for accounting expertise and services related to international trade and international mergers and acquisitions.
Jamil Ampomah, the Director of ACCA Sub-Saharan Africa caught up with The New Times’ Julius Bizimungu to speak about this and more and particularly how technological change is expected to affect the role of accountants over the next 10 years.
Below are excerpts:
Give us an overview of the accounting industry in Africa.
The accounting sector in Africa, by this I mean the professionally qualified accounting sector, has probably between 100,000 and 115,000 members across the region. Most significant numbers will be in South Africa, Nigeria and Kenya.
These are countries where they have more than 10,000 members, South Africa may have between 30,000 and 40,000 members, and Nigeria may have 20,000 to 30,000 members.
When you take those three countries you realize that the rest of Africa has very few professional accountants. This is a challenge we are facing; we are a continent of 1.2 billion people, yet we have very few professional qualified accountants.
That in itself is a challenge.
Before speaking about the challenges, which industries are these accountants occupy?
Accountants find themselves everywhere. Think of them as ‘doctors of business’ because they support the business to thrive beyond just looking at the books.
They are in tax authorities to make sure that taxes are well collected, they are in auditing fields to make sure organisations fulfill what they said they would do, and they are in financial reporting to make sure that all activities of the organization are reported.
Of course, when it comes to distribution it varies by country. In Uganda, you have a very good balance of professional accountants both in the private and the public sectors. In Ghana, most of the professional accountants are in the public sector with just a few numbers in the public sector
What you tend to find is that a lot more qualified accountants on average would work in the private sector as opposed to working in the public sector.
What factors drive more people to work in the private sector as opposed to the public sector?
One is about choice. Maybe people just love working in the private sector while a few others prefer being in the public sector.
I think the other factor is the reward, salary. In a number of countries, the observation is that the private sector tends to pay more than the public sector, so people tend to gravitate towards that.
Having said that, I have observed for the past years working in this industry, more people especially at the senior level moving from the private to public sector to try and support the development of their countries.
Apart from Nigeria, South Africa and Kenya where there are more accountants, other countries have few of these professionals. What are those countries losing?
The reality is that the role that professional accountants play is very critical. It means that you need to have specific skillset to be able to perform that role. If you don’t have a person with those skills and competencies and you are getting any other person – economist or scientist to perform that role – then we have a problem.
There are standards that need to be fulfilled and there are people who can do that. Those people are professional accountants. If you don’t have requisite skills, you struggle. That is the reality.
What you tend to find is that this also impacts on how effectively we are able to manage our resources. You see this many times in the public sector; if you have someone who is managing huge budgets but they don’t really have skillsets to do that, they don’t do it well.
Then you have the risk of corruption. If someone is in that role and they don’t belong to any professional body, if they commit any offense, they may get fired or removed from their position, but they may go elsewhere.
However, if they belong to a professional accounting organisation they would be sanctioned and their membership would be withdrawn from them. So they can no longer practice as professional accountants.
Studies show that there is correlation between accounting and the health of the economy. What are the few existing professional accountants contribute to their economies?
It’s hard to answer that in absolute numbers, but even a few existing professionals contribute a lot to their economies. From an investment perspective, it is very important that countries are able to demonstrate and give confidence to future and potential investors.
If you look at the role that professional accountants play – preparing reliable financial statements, preparing trusted reports, if I am an investor wanting to invest in Rwanda, I want to review their books to see how well they perform.
If you have strong, well-prepared books, it allows whoever wants to invest to easily relate to what you are doing. So, the contribution is big because it has a direct link with foreign direct investments.
Poor ethics are among other things that have been overly pointed out which characterize some professional accountants. How can countries deal with this?
I believe professional accountants clearly know their ethics, they know it’s a requirement and they know that there are consequences of not having them. That is very clear from the internationally set standards.
What we need to do is to continually remind professional accountants of the need to be ethical and remind them that good ethics makes good business case, it pays to be ethical and I think that is the message that needs to be carried across.
Transfer pricing manipulation is another challenge countries are burdened with. How can accountants help governments address it?
The first thing really is about having the right framework in place, which ensures that people are not able to abuse the system. What we found in Africa is an opportunity for people to find loopholes around week systems.
The second thing is that this is not just about accountants. It takes everyone involved.
The baby-boomers are retiring, how are you preparing the young generation to take on the responsibilities?
We are probably in a period where we have never had such a unique workforce, because today in any country, you have more than two to three different types of generations in one workplace.
How do you meet the aspirations of these generations? You have a generation which may not be good at using mobile phones, you also have a generation who actually want to do their work from home – the generation that wants to work two or three hours and perhaps can deliver more than what a person who’s in an office for 10 hours can deliver.
We need to be able to recognize the different needs and to be able to tailor our expectations, structures and systems to suit their expectations so that we don’t impose on the millennials a need for them to come to work.
We are at a pace where we give them tasks and ask them how they will deliver on them. That is the kind of engagement we are having.
We also to bear in mind that millennials don’t want to work for 15 to 20 years in one workplace, they probably want to move away and something else or get a career break to travel and come back.
All of these are emerging challenges that we are starting to talk about to find the best ways to go about them.
And the young generation want to use more technology tools than anyone else. How does technology affect your industry?
Technology is, indeed, growing very fast and disrupting every industry. Accounting industry will equally be disrupted. As platforms such as cloud computing become more widespread, some routine accounting tasks may become automated.
Although this will allow accountants to become more efficient, this change is not expected to reduce the overall demand for accountants. Instead, with the automation of routine tasks, such as data entry, the advisory and analytical duties of accountants will become more prominent.Follow https://twitter.com/Julio_Bizimungu