Confidence and Trust in an Age of Disruption

Accountants must carry their responsibilities with dignity, confidentiality and professional behaviour while embracing technology, Malta Institute of Accountants president William Spiteri Bailey tells the Times of Malta.

Technology leaves no stone unturned, disrupting sectors and professions, and in turn fuelling cycles of adaptation and survival.

The accountancy profession is not immune to disruption and has come a long way from the traditional manual bookkeeping to processes aided by accounting software.

“The evolution is ongoing and today the accountancy world is developing into one within a digitised business environment with new platforms and technologies such as blockchain, cryptocurrency, big data and artificial intelligence including rigorous analytics,” says William Spiteri Bailey, Malta Institute of Accountants president.

Such technological advancements should not be seen as conflicting with the accountancy profession – rather, they give accountants a greater capacity to advance their roles as trusted, value-added advisors and analysts.

“Future accountants will increasingly need education in digital technology and analytics. Knowledge of digital technology is the key competency area where professional accountants might have skill gaps today,” says Mr Spiteri Bailey.

Despite such disruption and changes, the role of the professional accountant has always remained consistent and rooted in the values of responsibility, accountability, integrity, teamwork, innovation and excellence – all strong foundations which reflect the determining contribution that the profession makes to the economy.

“Our role as accountants is crucial to business and the financial sector, to public affairs and other social interests, and we play an important part in shaping the lives of people,”

“This lays more responsibility upon us as professional accountants, which we must carry with dignity, confidentiality and professional behaviour at all times while embracing the technology advancements.”

With Malta pitching itself as ‘Blockchain Island’, this technology is set to disrupt most professions, including accountancy.

“Blockchain technology has already started to disrupt the accountancy profession,” says Mr Spiteri Bailey. “Some accounting firms have already started to account for cryptocurrency assets, and the Commissioner for Revenue in Malta has issued guidelines concerning the taxation of DLT assets under the Income Tax Act, the VAT Act and the Duty and Documents and Transfers Act. As of recent the laws that the Maltese Parliament approved, namely the three bills regulating blockchain-based businesses and their service providers, as well as cryptocurrencies and initial coin offerings, came into force.

Blockchain is set to hugely impact everything from auditing and cybersecurity to the way we store, access and interpret information

“Within the accountancy profession, blockchain is set to hugely impact everything from auditing and cybersecurity to the way we store, access and interpret information. Today we already see certain accounting firms analyse client data through artificial intelligence software where exception reports from volumes of data are issued within minutes. Moreover, since blockchain will have raw data which can be accessed by the right users such as auditors, we will need to change the way we perform audits.”

Will blockchain also offer added security to investments and financial movements?

“Blockchain technology is transforming the way we do business, in the process reducing cost and boosting efficiency.”

“As a decentralised ledger, blockchain can diminish costs by removing intermediaries such as banks and effectively decentralising trust. Perfect immutability does not exist in blockchain.

“Like any other network, blockchain is technically prone to modification. However, so much computer power is needed to make changes that it makes modification nearly impossible. The larger and more distributed the network, the more secure it is believed to be.”

While technology is a valuable tool for the accountancy profession, checks and balances still need to be in place.

“It is important for accountants to keep up with developments in accounting technology, but it is also essential that one has checks and balances, as well as processes for risk management in place to support usage of new technological solutions.

“The Malta Institute of Accountants has, this year, created a new sub-committee, the Digitisation Committee, to assist our members – who amount to more than 3,000 – come closer to technology. This committee has also been deeply involved in the preparations our biennial conference – entitled ‘The Finance [r]evolution… Unlocking the digital riddle’ – which is being held on November 16 at the Intercontinental Hotel, St Julian’s.”

Mr Spiteri Bailey sees the present as an interesting new era for accountancy.

“Some call it an age of disruption, ambiguity and upsets. It is also an age of opportunity. For sure, this is a phase of great unpredictability. The new reality of uncertainty needs a reliable professional class and this is precisely where we, accountants, come in.”

“The accountancy profession emerges as a dependable companion for two main reasons. First, it is a fact-oriented specialisation. Our work is based on hard data and our advice is the result of analysis, not guesswork. In the blur of interpretation and assumption that surrounds our world, we offer a clear, objective reading of the signs.

“The second factor that makes our profession a steady ally is trustworthiness. Accountancy enjoys the confidence of our partners and we are respected for the integrity, candour and selflessness that our work stands for. Our profession is a constant in an otherwise unstable climate that people and organisations must endure. The trust that they place in us is earned, not owed, and we accountants carry with us the shared responsibility of protecting the profession’s good reputation.

“The business world will continue to need our insight and unbiased guidance. The economy will continue to require our dependability and unbending efficiency. Society will seek our competence and our unequivocal honesty. The Malta Institute of Accountants is here for this purpose – to support and empower the profession. I am pleased to witness the dedication with which the members in the council and the various committees carry forward our vision. The contribution of each helps raise the bar of an already reputable profession.”