The Evolution of Accountancy Firms
Accountancy firms: places where ‘books’ get ‘balanced’, shoeboxes of receipts are sorted, and calculators are the most widely used piece of technology. It’s as simple as that, right!?
Aideen Murphy, Partner with Barden and expert in practice and tax careers, takes a look at the evolution of accountancy firms.
Ireland’s entry into the EU, the establishment of the IFSC and the significant increase in FDI has resulted in a thriving economy (current pandemic aside!). Alongside having our own prosperous indigenous business (CRH, Kingspan, Greencore to name but a few), Ireland is now home to over 1,000 MNCs spanning across industries such as technology, pharmaceuticals and finance. The challenges these businesses encounter are immense and have become increasingly more complex. In line with this, accounting firms have undergone a major evolution over the past couple of decades in order to satisfy the changing needs of their clients.
Technology is replacing the need for accountants to perform many manual, time-intensive tasks. We are moving towards a reality where auditors will no longer have to test samples to seek assurance. Instead, algorithms will scan data in real time and ‘red flag’ questionable transactions for the auditor to investigate. These advances in technology have compelled accountancy firms to shift their focus from solely performing accountancy services to offering ‘value-add’ advice to their clients. A significant portion of the Big4’s revenue (up to 40%) now comes from their consulting departments, as opposed to their more ‘traditional’ audit and tax services.
Technology has become a key component in consulting offerings as clients now turn to data to drive efficiency, growth and profitability. Organisations rely on their advisors to construct innovative, technology-centred solutions to their challenges. Advisory firms have shrewdly responded to these demands and have developed their own, unique offerings. For example, EY created wavespace and Deloitte developed their Greenhouse; both are innovation hubs where clients are encouraged to fuse technology, people and processes together and explore visionary ways to improve and grow their organisation.
Accounting firms have become somewhat of a “one-stop-shop” for their clients. A newly-appointed CFO may want help to map out his/her first 90 days in their new role, whilst the Financial Reporting team needs assistance in changing their processes to align with new regulatory standards, whilst the FP&A team needs a slick new dashboard to present their findings in a user-friendly, interactive manner. Instead of having to go to three different firms to find experts in each of these areas, clients will often turn to their chosen advisory firm for help with everything. The Big4 (and indeed many Top10 firms) have highly-specialised sub-teams within sub-teams, who are subject matter experts in their individual areas. Thus, one firm can offer their client a full suite of expertise to tackle almost any challenge.
As these accounting and advisory firms are now seen as innovators and problem-solvers, clients look to them to provide insights into their industry and to predict trends. “How will Brexit impact my tax function?”, “What will be the next disruptors in the FS industry?”, “How can I retain my top talent?” – these are just a few of the questions that clients have and that their advisors seek to provide answers to. Breakfast briefings, webinars and yearly trend reports are now staple components of advisory firms’ repertoires. They have to compete with each other to stay ahead of the curve, to remain relevant to their clients and be on the cusp of ‘the next best thing’ in innovation.
All these changes have had a noticeable impact on the type of individuals accounting and advisory firms hire. Gone are the days when all you needed was an accounting qualification and an aptitude for numbers. These firms are now hiring IT specialists, actuaries, lawyers, engineers, psychologists and economists. Candidates are not only required to have the necessary technical expertise, but they need to have superb “softer” skills too; It is equally as important for a candidate to be able to build client relationships, work in cross-functional teams and have a curious, innovative mind-set. The ideal hire for these firms is somewhat of a “Unicorn” – someone who understands old and new technologies, how they work and how they can help solve clients’ problems, as well as being a natural leader with commercial awareness and an aptitude for numbers.
Easy to find!….
The evolution of accountancy firms has taken such momentous leaps over the past few decades that it certainly seems amiss to refer to them as “accountancy” firms! These organisations have to be commended for changing with the times and, indeed, changing in line with their clients’ needs. It’s an exciting time to be part of one of these organisations as there is no doubt that emerging from a global pandemic will create an opportunity for these firms to innovate even more…
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