4 Forces Shaping the Accounting Industry in Singapore
For decades, accounting has always been viewed as an industry-focused on maintaining accurate and timely financial records. However, with the emergence of societal and technological trends, this traditional perspective has evolved. Now, accounting is viewed as an industry with a purpose that goes beyond simply finances. In fact, because of these trends, accounting is seen as a holistic industry that impacts consumer behaviour, environmental sustainability, and digital innovation.
To better understand how the role of accounting has shifted in recent years, one needs to understand the forces that are affecting it. One of which is climate impact and ESG.
"Both investors and consumers pay attention to the positive environmental impact the company is making by analysing their Environmental, Social, and Governance (ESG) performance. For instance, before investors finance a company, they look at the non-financial factors of a company to determine possible risks and growth opportunities. Often, investors can gauge a company's environmental impact by measuring their carbon emissions. However, since ESG measurements aren't standardised in the way profits are, evaluating the ESG performance remains a new parameter in accounting,"
Another factor shaping the accounting industry is automation and Artificial Intelligence (AI). "Because technological advancements offer a quicker and more accurate way of collecting and analysing data, the majority of the financial leaders believe that automation and AI will take over more than half of the financial tasks in the next three years. More specifically, experts predict that AI will significantly affect the way accounting services detect fraud, streamline processes, and reduce risks," explained Mr Hans.
Considering the impact innovation has on accounting, it is no surprise that cryptocurrency is gaining traction with many financial institutions. As a matter of fact, several entities are beginning to consider it as a separate type of asset.
"The popularity of cryptocurrency can influence financial and investment decisions. Moreover, it can be considered a part of the company's financial assets in the future years. But because of its volatility, a different accounting standard must be adopted for cryptocurrency, which will inevitably shape the accounting industry as a whole," said Mr Hans.
Following the setbacks posed by the pandemic, firms need to maximise their resources to provide accurate insights and enhance customer experience. Building strong customer relationships is a critical factor in ensuring accounting firms' survival and prosperity. Therefore, focusing on client satisfaction will be vital for the future of the industry.
Corporate Services Singapore (https://www.corporateservicessingapore.com/
Teo Han Siang