Fast Future Report for - ACCA on 100 Drivers of Change for Business - Full Report

ACCOUNTANCY FUTURES ACADEMY

100 drivers of change for the global
accountancy profession

This report was writen for ACCA by Fast Future.

About ACCA
In this study, professionals working
ACCA (the Association of Chartered Certified
Accountants) is the global body for professional
in and close to the accountancy
accountants. We aim to offer business-relevant, first-choice profession identify 100 drivers of
qualifications to people of application, ability and
ambition around the world who seek a rewarding career
change shaping the landscape for
in accountancy, finance and management. businesses and profession
We support our 154,000 members and 432,000 students
accountants over the next decade.
throughout their careers, providing services through a
network of 83 offices and centres. Our reputation is
grounded in over 100 years of providing world-class The potential impacts and 10
accounting and finance qualifications. We champion resulting imperatives are explored.
opportunity, diversity and integrity, and our long
traditions are complemented by modern thinking, Opportunities are identified for
backed by a diverse, global membership. By promoting accountants to adopt a more
our global standards, and supporting our members
wherever they work, we aim to meet the current and strategic and trusted role.
future needs of international business.

About IMA®
IMA® (Institute of Management Accountants), the
association for accountants and financial professionals in
business, is one of the largest and most respected
associations focused exclusively on advancing the
management accounting profession. Globally, IMA
supports the profession through research, the CMA®
(Certified Management Accountant) program, continuing
education, networking, and advocacy of the highest
ethical business practices. IMA has a global network of
more than 60,000 members in 120 countries and 200
local chapter communities. IMA provides localised
services through its offices in Montvale, N.J., USA;
Zurich, Switzerland; Dubai, UAE; and Beijing, China.

About Fast Future
THE ACCOUNTANCY FUTURES ACADEMY
Fast Future Research is a global strategy, foresight research
and consulting firm that undertakes horizon scanning, The Accountancy Futures Academy contributes to
scenario planning and in-depth studies on the future of ACCA’s programme of research and insights with
key sectors. Recent studies have looked at the future of powerful visions of the future. It provides a
airports, scenarios for Asia, the future narcotics landscape, platform to look forward, to tune into the
emerging science and technology sectors, jobs of the emerging trends and discussions in the global
future, demographic change, the meetings industry, travel business and policy spheres and the latest reforms
and tourism and the future of HR. Fast Future works with facing the world of finance.
clients in global businesses around the world to help
them understand, anticipate and respond to the trends, By looking to the future it helps the profession
forces and ideas that could shape the competitive stay at the cutting edge. The Academy’s work
landscape over the next 5–20 years. Fast Future’s consulting fosters fresh thinking and innovative discussions,
draws on a range of proven foresight, strategy and identifies the barriers to and facilitators of
creative processes to generate deep insight into a tomorrow’s successes, and identifies the potential
changing world. These insights are used to help clients strategies that will enable business and finance to
develop innovative strategies, create disruptive business navigate the choppy waters that lie ahead.
models and define practical actions to implement them.
www.accaglobal.com/futures

© The Association of Chartered Certified Accountants,
September 2012
2010

Foreword

ACCA has a long history of forward looking research into the future of business and
the accountancy profession. This report, builds on ACCA’s groundbreaking
research, Where Next for the Global Economy? A View of the World 2030,1 and
other strategic studies published by ACCA in recent years. That study considered
issues such as the (re) distribution of global power, the scarcity and competition for
resources, shifts in global markets and new business models, leading to new
paradigms for governance and assurance.

This report thoroughly examines the key factors that ACCA and IMA members
should be thinking about to prepare for future opportunities and challenges over
the next 5–10 years. In so doing, it identifies 100 emerging drivers of change that
directly or indirectly impact business and the accountancy profession. Additionally,
it provides a number of future scenarios for the profession while sketching out the
‘must do’s’ for them to be successful over the next decade.

How will businesses need to adapt to the myriad of changes? On one hand, they
will need to develop an understanding of these forces and their future implications.
This, in turn, will enable them to weather forthcoming shocks and capitalise on new
opportunities. On the other, there is a need to assess the skills implications for
accountants. The impact of the drivers of change outlined in this research
encompasses everything from the CFO’s role and reporting standards through to
the training and development of tomorrow’s accountants.

Uncertainty and volatility are the new normal. The global landscape will continually
be reshaped by a combination of market volatility, globalisation and innovation in a
climate where shifts of wealth and power, economic uncertainty and political
transitions are also occurring. These challenges are also exacerbated by rapid
advances in science and technology, demographic changes and the emergence of
new business models. In a shifting social and economic environment, all of these
will have serious implications on businesses and the accountancy profession.

This research draws on inputs from members of the Accountancy Futures Academy,
members of IMA, and ACCA’s other Global Forums to form the basis for high-level
practical debates on how the profession can be better prepared to respond to the
changing needs of businesses.

Ng Boon Yew FCCA
Executive Chairman
Raffles Campus

1. http://www.accaglobal.com/content/dam/acca/global/PDF-technical/global-economy/where-next.pdf

100 DRIVERS OF CHANGE FOR THE GLOBAL FOREWORD 3
ACCOUNTANCY PROFESSION

Executive summary

This report presents the results of an and identifying key factors and forces with extensive desk research and
ACCA Accountancy Futures study on shaping the future. These enable them analysis. In total, the member
drivers of change for business and the to weather emergent shocks and consultation and desk research
profession. The aim was to address the capitalise on new opportunities. Others identified 100 drivers of change. The
question: recognise that they do not as yet have drivers cover eight domains of
such a well-tuned future radar and, as a relevance – the economy, politics and
What are the key factors ACCA and result, have been caught out by law, society and demographics,
IMA members should be thinking changes in both the macroeconomy business, science and technology,
about to prepare for future and their operating environment. environment, energy and resources, the
opportunities and challenges over practice of accounting and the
the next 5–10 years? FUTURE-PROOFING THE accountancy profession.
TURBULENCE IS THE NEW NORMAL The analysis was undertaken in four key
For accountants there is a twofold stages:
The overriding global themes for the challenge: firstly, understanding how
decade ahead are those of shifts in the key forces shaping the future could • collation, definition and evaluation
regional wealth and power, extreme affect the organisations they serve. of the drivers
economic uncertainty and political Secondly, they need to assess the
transitions. At the same time, the implications for accounting standards • identification of the critical impacts
business landscape is being reshaped and processes and the accountancy and implications for the economy,
by a combination of market volatility, profession as a whole. The impacts business and the accountancy
globalisation and transformational encompass everything from the CFO’s profession
innovation. The impact of these role and reporting standards through to
challenges is compounded by rapid the training and development of • prioritisation of key action
advances in science and technology, tomorrow’s accountant. imperatives to respond to the
demographic shifts and disruptive new drivers and their impacts, and
business models. Collectively, these THE ‘DRIVERS OF CHANGE’ STUDY
forces of change are driving new • generation of alternative possible
societal values, needs and To help accountants and business scenarios of the future for
expectations. In short, they are leaders prepare for an uncertain accountancy based on how
transforming every aspect of our world. tomorrow, the ACCA Accountancy accountants might respond to those
Futures Academy commissioned Fast action imperatives.
DEVELOPING A BUSINESS RADAR Future Research to undertake this
study. The research explores the
In the face of such all-encompassing emerging drivers of change that could
change, there is a growing recognition have the greatest impact on business
in business of the need to develop a and the accountancy profession over
rigorous understanding of these and the next decade. The study draws on
other emerging drivers of change and inputs from members of the
to prepare for a range of possible future Accountancy Futures Academy,
scenarios. Indeed, some businesses members of the Institute of
already have well-developed Management Accountants (IMA), and
capabilities for scanning the horizon ACCA’s other Global Forums, coupled

100 DRIVERS OF CHANGE FOR THE GLOBAL EXECUTIVE SUMMARY 5

Figure 1: The ‘drivers of change’ study analysis framework

100 DRIVERS KEY IMPACTS AND ACTION SCENARIOS FOR THE
OF CHANGE IMPLICATIONS IMPERATIVES PROFESSION
Important factors shaping Critical issues for the economy, Key response strategies Alternative possible
the next decade business and the profession responses to the action
imperatives

Economy Economic context Assume and plan for volatility
Politics and law Challenges for business Build your radar
Society Business strategies and Pursue technology leadership CHANGEMAKER

Business priorities Prepare for true globalisation
Science and technology Accounting’s public image Develop a curious,
Environment, energy and Accounting’s positioning in experimental and adaptable
resources business mindset
Measurement and reporting Embrace an enlarged strategic SAFEHANDS
Practice of accounting
Accounting practices and commercial role
Accountancy profession
Skills, training and Establish trust and ethical
development leadership

Science and technology Focus on a holistic view of
applications complexity, risk and BUCCANEER
performance
Develop a global orientation
Reinvent the talent pool

SURVIVOR

6

STRATEGIC IMPACTS FOR BUSINESS
AND THE ACCOUNTANCY
PROFESSION

Analysis of the drivers and the potential
interactions between them suggests
that the decade ahead will be
characterised by a combination of
critical forces acting on business and
the profession – key among them being
those outlined in Table 1.

Table 1: Forces shaping the business environment and driving change in the accountancy profession

Forces shaping the business environment Forces driving change in the accountancy profession

Global economy Trust and reporting
Continued globalisation is taking place against a backdrop of persistent Pressures are increasing on the accountancy profession to strengthen its
economic turbulence and uncertainty and growing pressure to rethink the public image and go beyond current financial reporting practices to provide a
entire global economic and financial governance infrastructure. more transparent, simplified but holistic picture of a firm’s health and prospects.

Business environment Regulatory expectations
Growing business and regulatory complexity is coupled with intensified An increasing regulatory burden could drive up the cost of compliance.
global competition and shortening business cycles.

Innovation and change Standards and practices
Rapid advances in science and technology are driving disruptive innovation, There is a drive to globalise accounting standards and practices.
overhauling industry structures, challenging and reinventing business models
and spawning new sectors.

Society and work Intelligent systems and big data
Changing social values and expectations of work, an increasing global There is potential to use intelligent systems, data mining and predictive
population and an ageing society working well past current retirement age analytics to exploit the repositories of ‘big data’ that firms are amassing
are creating challenges for how technology is managed and leveraged to and as a result transform both the operational and interpretative elements
integrate a diverse multigenerational, multicultural and multinational of accountancy.
workforce.

Learning and development Organisational remit
The structure, techniques, distribution channels and costs of providing There are increasing expectations that the CFO and accountancy function
education and training are being transformed, with a growing trend towards should play a far greater role in everything from strategic decision making to
online courses and accelerated learning. the design of new revenue models.


RESPONDING TO THE DRIVERS: 10 key ‘strategic action imperatives’ (see
TAKING STRATEGIC ACTION Table 2). These imperatives need to be
addressed as a matter of priority if
Through exploration of the drivers and business and the accountancy
analysis of their potential implications, a profession are to ensure they can
clear set of implications and priorities perform effectively in the decade of
emerges for business and the uncertainty and rapid change that lies
accountancy profession. These ahead.
priorities have been consolidated into

Table 2: Ten strategic action imperatives for business and the accountancy profession

Five imperatives for business Five imperatives for the accountancy profession

Assume and plan for volatility Embrace an enlarged strategic and commercial role
With uncertainty as the new normal, businesses have to factor in turbulence as As businesses adapt to a turbulent environment, opportunities are emerging
a very real possibility and develop strategies for a range of different economic for accountants to assume a far greater organisational remit. The potential
and market scenarios. exists to leverage the capabilities of the accountant across all aspects of
corporate decision making, from strategy formulation through to defining
new business models.

Build the radar Establish trust and ethical leadership
Systematic, organisation-wide approaches are required for scanning the future The profession needs to be seen to be addressing clear public concerns.
external environment. Preparing for a wide range of possibilities, tolerance of According to the research conducted for this report, there is a perception that
uncertainty, curiosity and ‘seeing round corners’ are becoming critical the profession could do more to highlight and prevent everything from
development priorities for managers and leaders alike. small-scale financial irregularities through to the major systemic failures that
helped cause the global financial crisis and the ensuing economic uncertainty.

Pursue technology leadership Focus on a holistic view of complexity, risk and performance
The pace and disruptive potential of information and communications There is growing consensus on the need for reporting to provide a firm-wide
technology (ICT) development has placed technology at the heart of strategy view of organisational health, performance and prospects. Such a holistic
and operations of businesses of almost every size. New mindsets and perspective must acknowledge the complexity of modern business and
approaches to technology management are required to exploit and extract encompass financial and non-financial indicators of a firm’s status and
full value from the next decade of advances. potential.

Prepare for true globalisation Develop a global orientation
Development of a truly global operating model is becoming a priority. A clear The pace of global expansion of firms from developed and developing markets
emphasis is required on leveraging technology effectively. Equally important is alike is placing the spotlight on accountancy’s ability to master the technical,
developing the capability of management to work with, adapt to and get the language and cultural challenges of cross-border operations.
best out of a multi-location, multi-cultural and age-diverse workforce.

Develop a curious, experimental and adaptable mindset Reinvent the talent pool
A critical success factor in an increasingly complex and fast-changing The diverse range of demands and impacts on the profession is forcing a
environment is building a ‘curious’ culture. This implies nurturing an rethink of everything from training and development through to the type of
environment that is open to external ideas and in which participants are people being recruited. Characteristics such as entrepreneurial spirit, curiosity,
encouraged to forge a network of strong working relationships across the creativity and strategic thinking skills could assume far more significance in the
entire business ecosystem. selection of tomorrow’s accountants.

8

FROM ACTION TO OUTCOMES: companies and the profession respond • public perception of the profession
SCENARIOS FOR THE FUTURE OF and the relative importance and priority – with a spectrum of possibilities
THE PROFESSION they attach to the different imperatives ranging from ‘part of the problem’
could lead to a range of alternative to ‘guardians of integrity’
There are significant uncertainties over possible outcomes or scenarios. To
exactly how the driving forces explore these different possible • scope of the accountant’s role –
presented in this report may play out. outcomes, the study has outlined four ranging from a ‘narrow compliance
What is clear is that, however they alternative scenarios for the future of focus’ to a ‘broad organisational remit’.
unfold, the resulting impact will be the accountant’s role in a changing
transformational both for business as a world over the next decade. The As a result of considering the extremes
whole and for the accountancy world in scenarios are based on two key of the spectrum, four possible scenarios
particular. The 10 strategic action influencing factors, with a range of emerge; these are presented looking
imperatives provide a clear focus for options for how they might evolve back from a point 10 years into the
leadership attention. The ways in which during this time: future and are summarised in Figure 2.

Figure 2: Scenarios for the future of the accountant’s role

Guardians
of integrity

Safehands Changemaker

Narrow Broad
compliance organisational
Scope of the accountant’s role
focus remit
Public perception of the profession

Survivor Buccaneer

Part of the
problem


Changemaker particularly in turbulent times where Analysis of the drivers has highlighted
(Perceived as ‘guardians of integrity’, firms want to demonstrate exemplary key areas of the economy, business and
broad organisational remit) financial stewardship. the profession that could be affected
In this scenario, over the decade since the most. Assessment of the impacts
2012, many in the profession have Survivor suggests 10 critical strategic action
succeeded in balancing public (Perceived as ‘part of the problem’, imperatives on which business and the
expectations for responsible financial narrow compliance focus) profession should focus as they try to
management with an enlarged and In this scenario, survival seems the navigate through a turbulent economy
more entrepreneurial stance within the priority for many in the profession, who and rapidly transforming business and
firm. The need to ensure sound and focus on a relatively narrow technical regulatory landscape. The different
ethical practice has been a key driver in and strict regulatory remit. Society ways in which the profession, in
the gradual assumption of a wider remit perceives the profession to have failed particular, responds to these
by the CFO and accountancy function, in its duty of care to highlight and help imperatives could lead to a range of
which are seeking to encourage prevent the issues that caused the possible scenarios.
performance with accountability. The global financial crisis of 2007–9 and the
key challenge here is maintaining the subsequent decade of financial and Faced with an ever-growing operational
balance between encouraging economic uncertainty. Again, this might and regulatory compliance workload,
entrepreneurial behaviour and ensuring be considered an unstable scenario due an understandable choice would be to
the highest standards of financial to the perceived lack of integrity. Hence opt for the Safehands scenario and
stewardship. a goal for those in this scenario may be focus on a purely technical and more
to evolve to the positioning of those in traditional definition of the accountant’s
Buccaneer the Safehands scenario. role. The emphasis on integrity would
(Perceived as ‘part of the problem’, meet with strong public approval.
broad organisational remit) However, as the analysis of drivers and
Here, many in the profession are playing the scenarios suggest, there is also a
a more central role in value creation CONCLUSION: THRIVING IN clear opportunity for the profession to
activities. There is public concern, TURBULENCE, SEIZING THE aspire to the Changemaker scenario
however, that accountants have OPPORTUNITY and embrace an increasingly strategic
compromised their ethical financial opportunity. This would entail meeting
stewardship role in the pursuit of profit. The research emphasises that we are the public’s need for the highest
This scenario may be considered too entering an increasingly uncertain world standards of integrity while taking a
unstable by many because a short-term, where almost every aspect of the broader leadership role within both
profit-driven focus is not tempered by economy, business and the business and the wider economy.
ethical financial stewardship, or accountancy profession will be in a
entrepreneurship for long-term state of constant transition. The drivers While there is clearly no ‘correct’ scenario,
performance. presented in this report highlight the role of Changemaker is perhaps the
critical issues that will shape the most exciting and rewarding option
Safehands emerging landscape. The fact that both for those within the profession and
(Perceived as ‘guardians of integrity’, these drivers have been identified by for would-be recruits. The quality of
narrow compliance focus) those working in, and close to, the insights provided by those who
Here, the profession has succeeded in profession is a clear demonstration of participated in the study suggests that,
re-establishing public faith in its role the accountancy sector’s ability and although demanding and difficult, this
over the last decade. For many this has willingness to engage in long-term broader remit is definitely achievable
been achieved by deliberately strategic thinking. A key question is: for many within the profession. This
maintaining a focus on the largely report and the activities that follow
technical elements of the role while What do we do with these powerful from the ACCA Accountancy Futures
seeking to ensure compliance with both insights that our colleagues have laid Academy are designed to help
the spirit and the full regulatory before us? accountants on the journey to
requirements of the law. This is becoming genuine agents of change in
perceived as a stable scenario, both business and the wider economy.

10

1. Introduction

OVERVIEW METHODOLOGY
The ACCA Global Forums and
This report presents the findings of a The exercise was conducted in two Accountancy Futures Academy
study on drivers of change for global stages.
business and the accountancy As the global body for professional
profession. The research was An initial series of telephone accountants, part of ACCA’s mission is to
commissioned by ACCA’s Accountancy discussions and email consultations provide opportunity and access to
people of ability around the world and
Futures Academy and conducted by were held with members of the ACCA
support our members throughout their
Fast Future Research. Accountancy Futures Academy,2 which careers in accounting, business and finance.
yielded a list of 62 drivers of change. To ensure future success and provide
The report draws on extensive Contributors identified what they members with the best possible service,
consultation with members of the perceived to be key drivers of change ACCA developed an innovative programme
ACCA Accountancy Futures Academy, that would shape critical business and of Global Forums which bring together
respected thinkers from the wider
and members of the Institute of policy spheres and, as a result, the
profession and academia around the world.
Management Accountants (IMA) and accountancy profession over the next
As part of this programme, the
the ACCA Global Forums. ACCA and 5–10 years. Accountancy Futures Academy provides a
IMA have formed a strategic platform for ACCA to have a forward-
partnership to support research. These 62 drivers were then sent to looking radar tuned in to the emerging
expert members of IMA, and ACCA’s trends, discussions and reforms in the
global business and policy spheres.
The findings highlight what global Global Forums, for review, comment
Looking at a time horizon of 5–10 years or
experts see as key drivers of change and identification of additional drivers.
more, the Academy identifies and explores
over the next decade and beyond. A further 38 drivers were identified at issues of major significance for the global
These drivers could have a critical this stage. accountancy profession to ensure it
impact on business, the accountancy complements the other ACCA Global
profession and the global environment This report is based on the output from Forums.
in which accountants will operate. this broad engagement and contains
descriptions and analysis of a total of
The starting point of this study was to 100 drivers of change.
address the following question:

What are the key factors ACCA and
IMA members should be thinking
about to prepare for future
opportunities and challenges over
the next 5–10 years?

2. http://www.accaglobal.com/en/research-
insights/global-forums/futures-academy2/
members.html

100 DRIVERS OF CHANGE FOR THE GLOBAL 1. INTRODUCTION 11

REPORT STRUCTURE When viewed collectively, the set of 100 A PLATFORM FOR ENGAGEMENT
drivers explored in this report present
The 100 drivers are introduced and fundamental challenges for business Strategically, the aim is for this project
summarised in Chapter 2. A fuller and the accountancy profession. These to provide a platform for engagement
description of each driver is presented challenges encompass literally every between members of ACCA’s Global
in the Appendix using the following dimension of business from governance Forums, members of IMA, and their
characteristics: and strategy through to operations and broader memberships and the wider
talent development. Chapter 3 explores community of stakeholders on the
• a short description those impacts in greater detail. After future of accountants and the
this, Chapter 4 examines the accountancy profession. It is also
• a possible impact time frame, perspectives shared by members of the intended to help facilitate a debate on
suggesting when the originator(s) ACCA Global Forums on the drivers the topics that the Futures Academy
think it could affect at least 20% of expected to have the greatest impact. should pursue in greater detail.
the profession globally It then goes on to assess the key
implications of the 100 drivers for the No future work of this type can ever
• possible implications for and economy, business and the hope to be definitive, but this report
impacts on business and the accountancy profession. provides an important input into the
accountancy profession, and development of future organisational
A number of the drivers focus on key strategy. It provides accountancy
• key questions and uncertainties advances in science and technology, organisations and professionals, and
raised for the accountancy and their potential impact on business the businesses in which they work, with
profession. and the practice of accountancy are a framework for preparing for, adapting
discussed in this chapter. Chapter 5 to and influencing change.
examines the priorities that emerge as
businesses and the profession seek to The research partner in this project was
move from insight to action. Finally, Fast Future Research, a foresight
Chapter 6 considers a range of different research and consulting firm that works
possible future scenarios for the with clients around the world to help
profession over the next decade. them identify, anticipate, evaluate and
respond to the trends, forces and ideas
that shape the global economic and
business landscape over the next 5–20
years.

12

2. 100 drivers of change

CATEGORISATION OF THE DRIVERS ECONOMY SOCIETY

Through the various stages of This set of drivers explores the fallout The rate and distribution of global
consultation and desk research, a total from the global financial crisis and the population growth, and the resulting
of 100 drivers of change were identified. long-term impact of current turbulence. implications for workforce age structure
These are described in full in Appendix 1. They encompass the sustainability of are highlighted as important drivers.
Table 2.1 groups the 100 drivers in eight debt, prospects for growth and overall Increased female participation in the
separate categories: effectiveness of the global economic workforce, expectations of emerging
infrastructure. Consideration is also generations and cultural diversity are all
• economy given to stability of national revenue emphasised as critical social drivers for
bases, the role of global reserve business. Issues around workforce
• politics and the law currencies, and the need to consider capability are also identified with
alternative economic management particular emphasis placed on the cost
• society models. and ease of access to higher education
and the growing role of online learning.
• business Public attitudes to pure capitalism,
concerns over protectionism and BUSINESS
• science and technology changing notions of currency are all
explored as part of the response to There is a clear emphasis on the need
• environment, energy and resources both the global financial crisis and for fundamental change in every aspect
continuing volatility. In exploring of business from governance and
• practice of accounting possible routes forward for the global leadership through to approaches to
economy, factors considered include innovation. There is scrutiny of the
• accountancy profession. the level of inequality, the role of the critical role of leaders’ attitudes to
knowledge economy and that of change, the level of business complexity,
The key themes explored in the forces micro-businesses. Finally, consideration the rate of change in business cycles
covered under each category are as is given to factors such as infrastructure and adoption of new business models.
follows. investment, labour mobility, stock Other strategic drivers considered
exchange mergers and the impact of include the need to consider alternative
the BRIC economies on global business and market paradigms and the
accountancy firms. management of enterprise risk,
accountability and compliance.
POLITICS AND LAW
Globalisation is seen to create both
From a business and accountancy opportunities and challenges. A focus is
perspective, drivers considered to be of placed on the scale of international
critical importance are the level of mergers and acquisitions, the global
political volatility and the rate of talent pool, choice of business
democratic transition. Alongside these languages, reverse innovation from
the role of global institutions and the emerging economies and the impact of
impact of cultural globalisation are also new financial centres. Key managerial
highlighted as key drivers. The scale challenges highlighted for the next
and complexity of regulation and the decade include the importance of
twin challenges of governance and reputation management, the adoption
quality assurance of public sector of corporate ‘living wills’, the level of
outsourcing are also emphasised. foreign direct investment and the use of
integrated systems thinking.

100 DRIVERS OF CHANGE FOR THE GLOBAL 2. 100 DRIVERS OF CHANGE 13

Business responsibility is identified as a ENVIRONMENT, ENERGY AND ACCOUNTANCY PROFESSION
crucial issue for the coming decade RESOURCES
with a focus on social business, the level In the wake of the financial crisis, public
of social entrepreneurship, evolution of Concerns over the sustainability of expectations of the profession, its
corporate governance and managing current patterns of consumption loom attractiveness and definitions of its role
diverse stakeholder expectations. large, with particular attention being are central to many of the drivers
Other important drivers explore the paid to climate change, the biodiversity emphasised. Importance is also placed
role of cash in financial transactions, the impacts of business and competition on the flexibility and suitability of
role of intermediaries and the for natural resources. Expectations accountancy training. Particular
emergence of new industry sectors. about corporate eco-literacy, green attention is given to building capacity in
practices, and ethical consumption in transitional economies and developing
SCIENCE AND TECHNOLOGY business are explored. Consideration is entrepreneurial skills and business
also given to the ‘marketisation of awareness. Other factors highlighted
The digitisation of business and green’ through mechanisms such as include establishing the role of industry
everyday life are highlighted with a carbon trading, environmental financial associations in developing markets and
focus on our growing personal markets and the take-up of green the impact of entrants from outside the
technology ecosystems, the ease of energy. profession on the accountancy services
access to the internet and social media sector.
and their impact on attention spans. For PRACTICE OF ACCOUNTING
business, the impact of cloud
computing, the valuation of digital Both strategic and operational drivers
assets, cybersecurity, the rise of ‘big are explored. The changing scope,
data’ and the value of data mining are scale and complexity of the CFO role
all emphasised. are examined, particularly in relation to
growth in demand for non-financial and
Attention is drawn to the disruptive integrated reporting. The ramifications
potential of new industries and of the globalisation of accounting
production models, and developments regulation, standards and supply chains
such as digital publishing, intelligent are explored along with the implications
accounting systems, predictive analytics for the strategies and structures of
and augmented and virtual reality. accountancy firms. Operational
Emerging areas of science expected to considerations include defining audit’s
have significant business and role, managing internal audit, balancing
commercial impact in the next decade managerial and financial accounting,
include genetics, personalised health valuation of intangible assets and the
care, brain science, robotics and rate of adoption of XBRL as an
nanotechnology. accounting data standard.

14

Table 3: 100 drivers of change

Impact time frame

1–12 months 1–3 years 4–5 years 6–10 years 10+ years
Economy Proportion of knowledge- Stability of the global The level of economic Impact of BRIC market Notions of value and
creation activities as a economic infrastructure growth development on global currency
share of the economy at accountancy firms
the national and global Public attitudes to pure Total scale and
level capitalism distribution of global
inequality and unmet
Stability of national Consideration of needs
revenue bases alternative economic
perspectives Standing of the US dollar
Manageability of national as the global reserve
and international debt Globalisation vs. currency
protectionism in times of
Level of investment economic uncertainty Broadening measurement
required to maintain of business value and
national physical Extent of mergers of progress
infrastructure international stock
exchanges Freedom of mobility for
global labour

Number and impact of
micro-businesses on the
overall health of the
economy

Politics and Level of international Rate of democratic Governance and delivery Focus of global
law political volatility transition of outsourced public governance institutions
services
Pace and extent of cultural
globalisation

Volume and complexity of
legal regulation

Society Scale and distribution of Cost and ease of access to Spread of cultural diversity Workforce age structure
global population growth higher education in society and the
workplace
Uptake of online learning
models in education The workplace
expectations of
Generations Y, Z and
beyond

Level of female
participation in the
workforce


Impact time frame

Business Quality and availability of Speed and duration of Business leader Capitalism next: future
the global talent pool business cycles responsiveness to change governing business and
and disruption market paradigms
Scale of global mergers Experimentation with and
and acquisitions (MA) adoption of new business Crowdsourced funding for Influence of emerging
models innovation: the consumer financial centres
Extent of foreign direct as investor
investment in developed Level of complexity in Choice of global business
and developing business Adoption of integrated languages
economies systems thinking to
Enterprise risk manage business Management of
Scale of reverse innovation management capability complexity accountability and
flow from emerging compliance within the firm
economies to the Evolution of corporate Living wills for businesses
industrialised world governance regulation Emergence of new
and practice Scope and diversity of industry sectors and
Extent of social expectations of external professions
entrepreneurship in social Use of cash for financial stakeholders
and business sectors transactions

Pressure to manage The future role of
corporate reputation as intermediaries
part of business strategy

Level of corporate
commitment to social
responsibility, investment,
philanthropy and
volunteer work

Science and Impact of the internet and The digitisation of work Adoption of cloud Big data: the development Advancements in brain
technology personal technology upon computing by business and exploitation of large science
attention spans, learning, The use of personal organisational databases
and knowledge retention technology in business Creation and valuation of
digital assets Data mining and
Business impact of social Ease of internet access predictive analytics
media The future of digital
Cybersecurity challenges publishing ‘Intelligent’ accounting
for business systems
New industries and
Scale of business production models Advances in genetic
opportunities associated science
with augmented and Impact of advances in
virtual reality robotic science across The role of genetics in
business sectors personalised health care
Impact of nanotechnology
advances across business
sectors

16

Impact time frame

Environment, Global climate change Global competition for Carbon tax and other
energy and limited natural resources environmental market
resources Level of trade in mechanisms
environmental finance
markets

Extent of eco-literacy,
green practices, and
ethical consumption in
business

Developing materiality of
biodiversity impacts to
business

Scale of take-up of
alternative energy by
business

Practice of Size and complexity of the Clarity in financial Defining the scope of the
accounting CFO’s remit reporting and defining the accountant’s role
audit function
Internal audit Non-financial information
management Impact of size specific and integrated reporting
business regulation upon
Importance of non- accounting practices Balance between external
tangible assets in financial accounting and
company valuation Rate of adoption of XBRL internal managerial
as an accounting data accounting
standard
Changing structures and
business models for
accountancy firms

Opportunities arising from
adoption of global
regulation

Evolution of the global
accounting supply chain

Adoption of globally
accepted accounting
standards

Accountancy Flexibility, suitability and Establishment and Societal expectations and
profession cost of accountancy recognition of definitions of accountancy
training accountancy associations
in developing markets
Accounting skills capacity
in transitional economies Level of entrepreneurial
skills in the accountancy
Public perception and profession
attractiveness of the
accountancy profession

Impact of competition
from entrants outside the
profession on the
provision of accountancy
services


3. Evaluating the driver impacts ACCA Global Forum member priorities

As part of the broader consultation with The top-ranked selections reflect the The sheer level of complexity in
members of IMA and ACCA’s Global extent to which the business business is emphasised as an important
Forums, respondents were asked to environment is changing and becoming factor. Similarly, concerns are also
identify the five drivers from the initial more complex. These factors were raised over the ability of business and
list of 62 that in their opinion would expected to affect both management the finance function to keep pace with
have the greatest impact on the practices and the need for reporting of and control the costs of compliance,
accountancy profession worldwide over the non-financial activities of global given a growing volume and complexity
the next 10 years. A total of 29 firms in an integrated manner. The of legal regulation. Equal priority is
responses were received. Table 4 lists legacies of the financial crisis, coupled given to the impact of an ageing society
the highest-ranked selections. with continued economic uncertainty, in Western nations and the resulting
are also reflected in the priority given to effects on workforce age structure.
The priority issues identified were the stability of the global economic Increasing age diversity in the
grouped into four main topics: infrastructure. In addition, some priority workplace is identified as bringing its
is given to public concerns over the own challenges relating to differences
• complexity in business viability of and risk associated with the in working practices, use of technology,
models of pure capitalism that are seen use of language and developing social
• economic uncertainty to have contributed at least in part to cohesion.
the current volatility.
• cost of compliance

• the changing shape of the global
workforce.

Table 4: Global Forum member rankings of drivers expected to have the greatest impact on the accountancy profession

Rank Driver

1 Non-financial information and integrated reporting

2 Stability of the global economic infrastructure

=3 Public attitudes to pure capitalism

=3 Level of complexity in business

=5 Volume and complexity of legal regulation

=5 Workforce age structure

7 Enterprise risk management capability

=8 Focus of global governance institutions

=8 The workplace expectations of Generations Y, Z and beyond

=8 Quality and availability of the global talent pool

=8 Evolution of corporate governance regulation and practice

=8 Societal expectations and definitions of accountancy

18

4. Assessing the impact

This chapter addresses the ‘so what’ The implications are explored across Within each of the eight areas, a
question – examining key implications eight key impact areas: number of critical challenges are
of the 100 drivers for business decision identified along with the potential
making and the future role of the • economic context implications for business and the
accountancy profession. Table 5 and the accountancy profession. To help
discussion below draw out key findings • challenges for business connect these insights and their
from the analysis of the 100 drivers. The implications to tangible actions,
analysis highlights how the drivers • business strategies and priorities Chapter 5 highlights and describes the
could have an impact across critical key ‘strategic action imperatives’. These
dimensions of the economy, business • accountancy’s public image are seen as the priorities for business
and the accountancy profession over and the accountancy profession arising
three key planning time frames: • accountancy’s positioning in the from the analysis of drivers and the
business assessment by impact area.
• the next 3 years
• measurement and reporting
• 4–10 years
• accountancy practices
• 10+ years.
• skills, training and development.

100 DRIVERS OF CHANGE FOR THE GLOBAL 4. ASSESSING THE IMPACT 19

Table 5: Impacts of the drivers on the economy, business and the accountancy profession

Next 3 years 4–10 years 10+ years
Economic Uncertainty over stability of global economic Continuing concern around volatility and low Key global institutions such as the UN and
context infrastructure and integrity of the Eurozone levels of economic growth WTO reformulated to reflect the new
distribution of global power
New economic models and perspectives Risk of increasing income inequality between
explored, eg Collapsonomics and closed- and within developed and developing Increase in total global population, but
loop economics countries continued population decline across much of
the developed world
Broader adoption of protectionist policies to Increased global competition for finite
protect internal markets and control export resources Greater reliance in the West on economic
of valuable raw resources migrants from developing countries
Emerging centres of financial power in the
Knowledge-creation activities represent a East, eg Shanghai, Mumbai, Seoul
growing share of the national and global
economy creating a ‘knowledge economy’ Greater private-sector delivery of public
services
Decreased use of physical currency
Governments struggle to control public debt
across the developed market economies

Challenges for Shortening of business cycles Increased competition across all sectors from Fundamental reshaping of industry value
business BRICS market firms selling innovative quality chains and business models
Increased competition for top global talent products at lower prices
Impact of human enhancement (chemical,
Decreased business intermediation as A decrease in the mobility of global labour genetic and technological) increasingly
consumers interact directly with producers apparent in the workplace
An ageing workforce in much of Europe and
Challenges of managing a continuously East Asia Shift in industrial logic from machine age
digitally connected 24/7 workforce with thinking to biological models of design
decreased attention spans and increased Challenges of incorporating of Generations Y
distractions and Z into the workforce and meeting their
expectations
Cybersecurity risks of fraud and theft of
intellectual property and sensitive corporate Increased participation of women in the
and financial information workforce globally, especially in senior
management

Growing public and government demands on
business to demonstrate greater
transparency, regulatory compliance and
ethical behaviour

Business Increased focus on tackling complexity Greater emphasis for business leaders to Significant shifts in global centres of RD and
strategies and recognise and respond to global changes innovation now apparent
priorities Shift from asset ownership to rental and disruptions, or be left behind
Social goals rank equally with financial
Wide adoption of new business models, eg Increased focus on organisational resilience returns for many firms
crowdsourcing for funding innovative ideas plans vis à vis political volatility, the impacts
of climate change and unforeseen ‘black New organisational forms and business
Further pressure to manage corporate swans’ models emerge driven by Eastern
reputation for competitive advantage and to philosophies
address public concerns Greater use of concepts such as chaos theory
and integrated systems thinking to manage Intelligent systems now at the heart of
Increased corporate social responsibility and complexity corporate decision making
sustainability efforts
Technology and globalisation enable a new Immersive, multi-dimensional, gesture-
Newly democratising countries creating fresh generation of emergent global micro- based, tactile and voice-controlled interfaces
market opportunities for foreign business business to most systems and devices

Increased digitisation of work and company Adoption of ‘living wills’ helps to facilitate
assets orderly financial unravelling of failed
companies
Greater social entrepreneurship creating
social goods and ethical business practices Firms go beyond mere regulatory compliance
and strategies by adopting exemplar behaviours voluntarily

Use of social media to interact with Exploiting new technologies and production
stakeholders and develop new business models, eg 3D printing, nanotechnology, and
relationships biomimicry

Increased adoption of cloud computing
reduces the size of firms’ technology
infrastructures

20

Next 3 years 4–10 years 10+ years
Accountancy’s Process of rebuilding public trust after the Establishment of accountancy associations in The changing role of accountants within
public image perceived failings of accountants that came developing markets to provide a collective business and the use of emerging
to light during the financial crisis voice for the profession, as well as training technologies radically redefines the
and standardisation of practice accountancy profession

Accountancy’s Expansion in the size and complexity of the Accountants take on a more strategic role, Increasing use of big data, predictive
positioning in CFO’s remit helping to explore the merits of potential analytics and intelligent accounting systems
the business new business models and markets to develop and evaluate strategies, business
Growing strategic responsibility for value models and pricing approaches
maximisation Greater focus on managerial accounting
within organisations alongside external Accountants ensure compliance with
Increasingly prominent role in strategic financial accounting regulations such as a carbon tax and other
decision making emerging environmental market mechanisms
A greater role in constructing MA strategies
Watchdog role to ensure compliance with to help plan for future growth and stability Auditing of the genetic health of the
new legal regulations, enforcing transparency workforce
and the management and reporting of risk Accountants playing a key role in
implementing green practices through the
Expansion of the internal audit function from minimisation of waste and identification of
being simply an independent assurance green opportunities such as use of
function to becoming a management adviser alternative energy

Measurement Greater push for simplified and transparent Accounting in multiple strong global Challenge of responding to a proliferation of
and reporting financial reporting to gauge the true health currencies, ie US dollar, yuan and euro 2.0 local and virtual currencies, and new
of an organisation and discourage financial methods of payment, eg ‘time banking’
malpractice Increased use of alternative business
measures, eg innovation, trust, happiness Greater experimentation with immersive
Increased importance of non-tangible assets and sustainability financial reporting using data mining,
in company valuation, eg RD augmented reality and virtual reality
Greater integration of non-financial
information into auditing reports

Increased auditing of environmental impact
of organisations

Increasing use of data mining to create
tailored financial reports

Accountancy Increasingly complex regulatory landscape Increased global regulation of the Advances in fields such as artificial
practices with regards to different types and sizes of accountancy profession intelligence and predictive analytics could
business create truly intelligent automated accounting
Widespread international adoption of systems
Widespread adoption of XBRL as an common global accounting standards and
accounting data standard practices, eg IFRS

Increased competition in the provision of Adoption of new structures and business
accountancy services from non-accountants models for accountancy firms

Increased off-shoring of accounting,
especially lower value routine tasks

Greater focus on audit of non-tangible and
digital assets, eg virtual real estate, digital
music, and intellectual property

Skills, training Increased cost of higher education Emphasis on language acquisition and Brain-machine interface allows education
and cultural training to accommodate a diverse modules to be downloaded straight into the
development More organisations offer to pay full or part workforce and operate in emerging markets mind
course fees in return for students’ agreement
to work within the company. Greater focus on accountants’ ability to
analyse larger datasets
Increased uptake in online learning for
academic study and business training Greater emphasis on basic entrepreneurial
skills such as business insight and leadership,
Greater emphasis and expansion of creativity, and communication
continuous professional development to
ensure staff are up to date with a rapidly Widespread provision of free open and
changing world unrestricted access to intellectual content

Harmonisation of accountancy education in
developing countries with international
competency standards


ECONOMIC CONTEXT

Much of current thinking about the future of the global economy over the next decade has, unsurprisingly, been influenced by
the fallout from the global financial crisis. Thinking is also being shaped by continued economic uncertainty fuelled by high
levels of sovereign debt, and rising concerns over the scale of potential regulatory abuses within the financial system. As a
result, five aspects of the global economic system are expected to see significant - if not transformational - change.

i. Societal expectations ii. Rethinking the growth paradigm iii. Reworking financial systems and
Public anxiety is expected to increase The next decade will be one in which governance
over systemic weaknesses and the ‘growth for all’ can no longer universally Much of the economic governance
mismatch between a relatively narrow be assumed as the dominant paradigm. focus of the next decade will be
distribution of rewards and a wide While some developing countries in characterised by new thinking,
public ownership of the downside risk. particular may be able to pursue an experimentation and debate over
At the same time, the social and uninterrupted 10-year growth path, for alternative models for managing the
psychological costs of economic many the outlook is a lot more global system. The goal will be to try to
austerity are expected to cast a shadow uncertain. For developed economies a evolve a new financial architecture,
that lasts a decade or more over the major dampening of growth is governance framework and regulatory
countries that are worst affected by expected owing to continued efforts to approach. Any new model must be
sovereign debt, such as Greece and resolve the debt problems of the capable of managing a complex global
Spain. The income gap and scale of Eurozone, Japan and the US. At the economy in a fairer, efficient and more
inequality between rich and poor same time, potential slowdowns and transparent manner. These changes will
nations could also become a growing debt challenges in the major emerging require an unprecedented level of
cause of tension and guilt within the economies such as China and India are vision and coordination among
global system. expected to retard expectations of policymakers, central bankers, standard
global growth still further. setters, legislators and private sector
Implications financial institutions around the globe.
Collectively, these factors are expected Implications
to lead to demands for more Countries, businesses and accountants The conceptual underpinning of the
responsible approaches to capitalism alike will be forced to consider a range new models may well draw on lessons
and a system that ensures more of possible growth scenarios when from other fields – such as the
transparent and equitable distributions developing their future plans, and biological world – looking, for example,
of risk and reward. prepare for the possibility of a low to at the design of resource-efficient
no-growth world. closed-loop systems. Ideas may also
come from fields such as ‘chaordic’
design (defined as ‘systems functioning
on the edge of chaos with enough
order to give them pattern’) and
Collapsonomics, which seeks to
understand the behaviour of systems on
the verge of collapse. To gain societal
approval globally, any new models will
almost certainly need to incorporate a
range of measures of human progress
and non-financial assessments of
systemic performance.

Implications
Tolerance of uncertainty will become a
core competency for business leaders
and accountants alike. Accountancy
practices and training courses may
need to exist in a state of constant
evolution for the next decade or more
as the world tries to establish
sustainable economic management
models.

22

iv. Revisiting the currency debate v. Drivers of future growth entrepreneurship, support for small-to-
A number of potentially conflicting Despite immense uncertainty over the medium enterprises (SMEs) and the
forces will shape decisions about future of the global economy, nations creation of micro-businesses.
currency unions, reserve currencies and must still find ways of feeding their
alternative tokens of exchange. Most populations and establishing whatever Implications
would acknowledge that 50 years from the ‘new normal’ will be. As a result, Firms may increasingly be evaluated on
now there could well be a single global there is an increasing focus globally on the quality of their science and
currency represented entirely in encouraging the development of new innovation base and their ability to
electronic form. The issue is how does market sectors ranging from genetics benefit from future growth sectors.
the world get there from here? The and human enhancement through to Industrial policy and legislation may
Eurozone has demonstrated the new materials and 3D printing. At the evolve to place legal requirements on
difficulty of achieving successful heart of such strategies lies the notion firms to help nurture the development
monetary union without close alignment of leveraging science, technology and of micro-businesses and SMEs.
of political and economic policies. At innovation for growth.
the same time, there is a growing
expectation that the next decade could An example of the search for new
see a number of other currencies, such sources of growth is the European
as the yuan, become increasingly Union (EU) Horizon 2020 research and
influential and share the role of global development programme. The EU is
reserve currency with the US dollar. currently in the process of approving
this ambitious €80 billion initiative. The
While mainstream currencies should goal is to stimulate the growth of key
dominate for the foreseeable future, sectors across the continent. The
there is clear potential for alternatives challenge in such funding programmes
to financial mechanisms of exchange to is to ensure that sufficient resources go
be adopted for a range of transactions. to ‘pure’ discovery-based research
A number of examples are already in activities rather than focusing too
use, such as the QQ virtual currency in heavily on ‘applied’ developments that
China. Others include sub-national are closer to market.
currencies, peer-to-peer credit
networks and time banking. In One of the big concerns surrounding
toughened circumstances, where the industries of the future is their
incomes are expected to remain under impact on total employment. Typically,
pressure for some time to come, the these information-age and biological-
popularity of such alternative non- era businesses tend to employ
financial tokens of exchange is proportionally fewer staff than their
expected to grow. industrial-age counterparts. As the
major employers of recent times
Implications rationalise in the face of an uncertain
For accountants, currency issues and future, the new entrants are not always
the management of the interface taking up the displaced labour – creating
between financial and non-financial the very real prospect of jobless recovery
exchange mechanisms will become and growth. As a result, there is
higher priorities and present new expected to be a major increase in
challenges. emphasis on encouraging


CHALLENGES FOR BUSINESS

For firms with global ambitions, faced with an economy in transition and changing societal expectations of business, three
critical challenges rise to the fore: situational awareness, stewardship and talent.

i. Situational awareness ii. Stewardship iii. Talent
‘Heads up’ could become the business A clear premium will be placed on Western populations, in particular, are
catchphrase of the next decade as firms leaders who have the ability to steer ageing rapidly and financial pressures
seek to build effective mechanisms to global enterprises in the face of ever could mean that people have to work
scan for even the weakest signals of more complex and challenging on into their late-60s, 70s or 80s. Hence
possible change in their environment. stakeholder demands. Factors such as the challenges of managing and
Many may struggle with the challenge executive rewards, trust, social values addressing the needs and expectations
of balancing short and long term and business culture are already under of a multicultural, global and age-
planning horizons. Some may see a the microscope. Part of the shift that diverse workforce will become ever
contradiction between the need for firms will need increasingly to reflect in more complex. Technology and the
longer-term scanning and the constant their governance approaches is the internet now sit at the core of the
shortening of business cycles. The latter evolution away from machine-age modern enterprise and may offer some
arising from economic uncertainty metaphors of the organisation. In their solutions for workforce integration.
coupled with technological disruptions place, there is growing interest in taking They also, however, bring with them
that are driving firms to try to achieve a biological-era view of the firm as a issues of shortening attention spans
their goals ever faster. living, constantly evolving and adapting and easily distracted employees.
ecosystem. Hence the stewardship role
Implications will extend to monitoring and nurturing In the longer term, advances in science
Balancing both short-term priorities and the health of the firm’s entire and technology applied for human
the longer-term need to ‘look round ecosystem’ of partnerships and enhancement will create a wholly new
corners’ will become a hallmark of relationships. set of challenges. A range of chemical,
well-managed organisations. biological and technological
Implications developments offer the potential for
Governments, citizens, regulators, significant human augmentation. The
customers and partners will all be idea that individuals and even entire
demanding greater transparency, firms will seek to enhance themselves is
regulatory compliance and ethical becoming an ever more serious issue.
behaviour. The ability to work
effectively in a constantly evolving Implications
‘ecosystem’ will become increasingly How well a firm manages its global
important. talent pool and its stance on issues such
as human performance enhancement
will assume increasing importance as
recruitment factors. The quality of
talent management could also be
adopted as an evaluation criterion as
analysts broaden the set of measures by
which they assess a firm’s health and
prospects.

24

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