An interview with Shahied Daniels, Chief Executive at the South African Institute of Professional Accountants

Far from its historic reputation as mere financial bean-counting, accountancy has transformed into a multi-faceted profession that tackles a full range of duties in the world of finance and business. According to Shahied Daniels, Chief Executive at the South African Institute of Professional Accountants (SAIPA), the accountancy profession is in the process of reinventing itself. Fittingly, as accountancy continues to enjoy increasingly wider relevance, a number of challenges and opportunities have emerged that Professional Accountants (SA) are well-equipped to expertly navigate.  We spoke to him recently to gather his insights on what lies ahead for the accountancy profession as it embraces digitalisation, drives sustainability, and tackles issues of transparency and integrity head-on.

What are the top trends shaping accountancy that SAIPA believes accounting firms should keep abreast of in 2023?

One of the biggest trends accountancy professionals should be aware of is sustainability reporting and environmental, social, and governance (ESG). While accountants have typically been considered ‘number-crunchers’, they actually have an important role to play in strengthening and standardising non-financial reporting standards. A second trend that is increasing is the importance of the attractiveness of the accountancy profession and talent retention. This is something that is particularly close to my heart as the chair the International Federation of Accountants’ (IFAC) Edinburgh Group, which has skills development of professionals high on its agenda. Thirdly, digital transformation is affecting the profession in a number of ways. Digitalisation and artificial intelligence (AI) are disrupting industries all over the world. They are not only automating functions traditionally done by people, but, more optimistically, they are enabling the evolution of many roles. As financial regulations tighten around the world, the importance of Professional Accountants (SA) in fighting corruption and supporting and driving anti-money laundering (AML) efforts, is also increasing.

As the importance of ESG reporting increases for businesses and their stakeholders, how can the accountancy profession demonstrate that its practitioners are best placed to deliver assurance?

While sustainability and reporting standards are not financial in nature, Professional Accountants (SA) are well-placed to offer expert advisory and assurance support in this area. Accountancy professionals are adept at reporting on non-financials as well. They are well-versed in reporting against standards and are uniquely skilled at providing assurance. One of the biggest imperatives to achieving the successful implementation of reporting and sustainability assurance frameworks is the capacitation of Professional Accountants (SA). Upskilling and reskilling is key to being able to contribute effectively to this emerging area of reporting. Other Service Providers (OSPs) are also operating in this domain, but what sets Professional Accountants (SA) apart is the standards against which members are able to provide advisory and assurance. Rather than competing, SAIPA believes that collaborating with OSPs is in the best interest of bolstering sustainability and reporting standards.

Although companies are increasingly reporting on ESG and sustainability, there is fragmentation in terms of which standards and frameworks are used. What are some of the current efforts to standardise these frameworks?

Bolstering ESG and sustainability reporting is a compulsory imperative within the accountancy profession. Currently, there are two new reporting standards that have been drafted by the newly-established International Sustainability Standards Board (ISSB), which forms part of the International Financial Reporting Standards Foundation. These two standards will officially be released in mid-2023, and will be a valuable step forward in standardising ESG reporting. The rise in sustainability reporting is a clear offshoot of the United Nations Sustainable Development Goals (SDGs), particularly goal 13, which is to take urgent action to combat climate change and its impacts. This demonstrates that professional bodies and corporates are taking the SDGs seriously and are taking steps to support the achievement of these goals. Linked to the efforts of the ISSB, the International Audit and Assurance Board is also in the process of reviewing auditing standards, a process that has been fast-tracked. Clarity on sustainability reporting coupled with strengthened auditing standards will be a boon for formalising ESG reporting and enabling it to be done effectively.

You mentioned talent retention as being high on the agenda for the accountancy profession. Why is this gaining importance now?

How we attract and retain talent in the profession is a question on the minds of accountancy professionals the world over. Internationally, we’ve seen the rates of new entrants into the industry fall. This is a trend that is not only affecting developing countries, but even world superpowers, like the United States. According to a report from the American Institute of Certified Public Accountants, the number of American students completing a Bachelor’s degree in accounting fell 8% in the 2019-2020 school year compared with the 2011-2012 period, a worrying trend. Accountancy is now competing against other professions for talent, especially the digital technology industry, which has become very attractive to young people.

Part of attracting and retaining talent is making the different routes to qualify as a Professional Accountant (SA) much more widely known. The profession has, unfortunately, had a rigid way of absorbing talent into the profession. You must have this qualification, you must have done that degree, etc. But what are the alternatives? This is a discussion we had recently at the IFAC Chief Executive’s Forum in New York. It is well-acknowledged that enhancing the attractiveness of the accountancy profession is crucial as it forms the basis of ensuring resilience, relevance and longevity.

How else can accountancy increase its relevance not only to potential talent, but to its wider stakeholders as well?

An often-underrated element of ensuring the relevance of a profession is the power of a strong brand. Our mother body and the voice of the global profession, IFAC, has acknowledged the importance of how professional bodies market themselves to attract dynamic talent. One of the emerging questions that affect the profession is the difference between a Chief Financial Officer (CFO) and the Chief Value Officer (CVO). In the near term, we are going to see a moving away from the ‘ordinary’ accountant, in terms of job titles (not designations).  We are going to start seeing more specialised roles, such as a data analytic accountant or a financial engineer or a strategic accountant. The actual job titles we are going to see accountants holding are going to reflect the change from ‘number crunching’ to holistic value creation.

To build that strong brand, the accountancy profession needs to emphasise the evolution of the value that is created by Professional Accountants (SA). We are no longer just looking at historical data to inform the services we perform for clients. SAIPA members are increasingly becoming forward-looking visionaries who create growth- and future-oriented value. We need to use this to build our brand as Professional Accountants (SA).

The digitalisation of accountancy has been accelerated in recent years. Some fear that increased digitalisation will make certain functions done by Professional Accountants (SA) redundant. What is SAIPA’s view on this concern?

Digitalisation has impacted the profession without question. This has been especially prevalent within the compliance work of accountancy professionals, which is increasingly being occupied by software. This looks to be a continuing trend, as AI also becomes widely adopted within the profession. AI is something the profession has been slow to embrace, but it is getting there. All of these new tools have affected the profession and will continue to. There are, however, two things that the profession will always require from the people at the heart of it: professional judgment and professional scepticism. Regardless of how digitalised the profession becomes, these two functions will always be there for the Professional Accountant (SA) to perform.

You’ve mentioned that accountants should embrace the changing nature of their role in a digital age. With Professional Accountants (SA) increasingly acting as value-creation partners, how can they use data and technology to provide strategic advisory to businesses?

The answer to this question lies in the upskilling and reskilling of Professional Accountants (SA). Continuous Professional Development (CPD) is something SAIPA is deeply committed to because it plays a crucial role in enabling our members to take advantage of the advancements within the profession and use them as a tool to bolster the value they bring. Rather than being intimidated by data and technology, Professional Accountants (SA) should look at the strategic edge these tools provide them in offering more dynamic strategic advisory. Data is gold, as they say. Data analytics is a tool to be used by Professional Accountants (SA) to elevate and enhance whatever they do, be it preparing financial statements or auditing reports.

Something that will be affecting the audit side in particular is blockchain technology. Blockchain has the capability to enable real-time online audits, which will affect the profession in a big way. We need to embrace both the opportunities and demands of technology. Leading by example, SAIPA has added digital proficiency as a compulsory CPD for our members because, wherever you practice within the profession, you need to stay relevant of what is happening in the digital technology space. Digital tools like ChatGPT and Microsoft’s Copilot will all likely have some kind of an effect on accountancy, and we need to stay informed to mitigate any risk to the profession, by capacitating ourselves to integrate these tools into what we do.

With the recent greylisting of South Africa, what role can Professional Accountants (SA) play in helping business ensure financial transparency and compliance, and supporting the efforts of the government to get the country off of the list?

As we all know, South Africa has unfortunately been placed on the Financial Action Task Force’s (FTAF) greylist of countries under special scrutiny regarding money laundering and terrorism financing. Linked to this, it is important for Professional Accountants (SA) to note emerging areas of assurance, as we develop and implement standards to support compliance in burgeoning industries, such as cryptocurrency, cybersecurity, data privacy and integrity, and AML. These are areas which the profession needs to put its heads together in developing assurance and audit standards for.

Professor Wiseman Nkhulu once raised a profound question for accountants: are they enablers or contributors to corruption? As a member of IFAC, SAIPA and its members are not just guided by ethics – we proudly adhere to internationally-recognised standards of integrity within the profession. It is our responsibility to collaborate and work with government and other entities and stakeholders to get SA off of the greylist. We have a hugely important role to play in the ‘accountability ecosystem’, as Auditor General Tsakani Maluleke terms it.

As accountancy takes on sustainability, digitalisation, and challenges of ethics and integrity, what is your hope for the profession?

South Africa has a doyen in the corporate governance space, Professor Mervin King, who is on record saying that accountants can save the planet. At face value, that may seem grandiose. But if you drill deeper, Professional Accountants (SA) play a role in key industries that are driving the world forward, from the medical to the legal industries and beyond. The increasingly important role SAIPA members play in sustainability reporting, for instance, is crucial in combatting climate change. Our work in financial compliance helps strengthen the attractiveness of our economy, to the benefit of all citizens. Accountants can save the planet. But to do so, we must evolve – stop doing the same thing and stop doing the same thing differently – accountants must do different things.