The world of accounting and bookkeeping is undergoing an evolution. Industries are progressing away from dusty ledgers and endless paperwork and moving toward different approaches. With new advancements in modern accounting, two factors surface: the exciting world of technology, and sustainable practices. The industry is going beyond streamlining practices and is actually driving forward environmental causes. So, let’s take a glimpse into the exciting advancements shaping the future of accounting.
Accounting in the Philippines is an Ever-Evolving Passion
The Philippine’s Professional Regulatory Board of Accountancy (PRBOA) is currently modifying the local Certified Public Accountants Licensure Examination (CPALE). The new CPALE will align with the American Institute of Certified Public Accountants (AICPA) 2024 exam model. This opens up Accountants in the Philippines to build a foundation of knowledge alongside a specialised discipline.
Joel L. Tan-Torres (former UP School of Business Dean, and former chairman of PRBOA), was one of the invited resource persons for the workshop on the exam enhancements. According to him, accountants have evolved their discipline and, “has led to a situation where specialisation in particular disciplines is called for, rather than a generalist perspective.”
Ultimately, this new model is set to reflect the ever-expanding field of accounting. From general number-crunching to specialised functions, bookkeeping is consistently developing. But, what else is new in the industry of numbers?
Cybersecurity: How Specialised Accountants and Blockchain Can Help
Technology undoubtedly plays a transformative role in modern accountancy, just as it has in marketing, human resources, and other business functions. The rise of remote and offshore services has reshaped the industry, offering greater flexibility and cost-effectiveness for businesses. However, in this digital transformation, cybersecurity emerges as the primary concern.
Sharon Levin from the University of Maryland praises the role of accountants in recognising cybersecurity threats. “If it’s corporate assets cyber criminals are after, it’s accountants who are responsible for protecting those assets with internal controls.” They recognise patterns and see patterns or transactions that may signal breach or fraud.
So, there is a strong push for accountants who specialise in cybersecurity or at least with good knowledge of cyber threats. In fact, the new CPALE model introduces Information Systems and Control as a specialised discipline. This specialisation aims to equip professionals with a deeper and more comprehensive grasp of cybersecurity through focused learning and expertise.
With that being said, another emerging technology has piqued the curiosity of businesses who want to delve into the exciting world of digital financial services – Let’s talk about blockchain.
What’s Blockchain Accounting?
While distinct fields, blockchain and accounting are converging to enhance financial cybersecurity. Blockchain technology acts as a secure, tamper-proof network – or chains” – of databases – or “blocks” – which safeguards information through tight encryption. Here are the key reasons why businesses are curious about blockchain technology:
- Secured Storage. Through end-to-end encryption and information storage across a network of computers, blockchain security is considered to be tight. While it isn’t impossible to attack a blockchain network, it is reported to be incredibly costly.
- Transparent and Traceable. Blockchain is incredibly auditable in every journey that the financial records take. Which makes it useful for financial auditing and transaction recording. As a public ledger, it also permits all relevant parties to access the same information to best mitigate fraud risks.
Can Blockchain Actually Be Trusted as one of the Advancements in Accounting?
To understand the risks, let’s look at how blockchain can be breached. We talked about how blockchain is an immutable ledger – which is true. Each block has a unique signature so all parties can ensure that their records are the same. With this, let’s look into common blockchain security issues:
51% Attacks. Signature validation in the blockchain is done by “miners”, or folks who basically audit and validate the blocks. So, if there are a few miners in a chain, it will be easy for hackers to take control. Once hackers take control of at least 51% of the mining power, they can take over the validation of transactions.
Double-Spending Attacks. This is common for cryptocurrencies such as Bitcoin. Attackers can try to be sneaky and spend the same coin on different vendors in the time that it takes to validate the block.
Experts emphasise the necessity of understanding emerging technologies like blockchain to effectively anticipate and mitigate potential risks. This proactive approach is crucial for leveraging the benefits of blockchain and similar trends while safeguarding your business security.
Green Accounting, How Accountants are Part of the Advancements in Sustainability
With environmental sustainability taking centre stage, businesses are tasked with observing their impact. In a surprising turn, accounting is emerging as a critical force driving sustainable practices. Let’s explore the synergy between sustainability and accountancy. Oddly enough, this unlikely partnership is fostering positive change.
Let’s talk about Green Accounting. Traditional financial reporting accounts for revenue, expenses, and assets. However, Green accounting looks for non-financial indicators such as environmental, social, and sustainability (ESG) for financial reporting.
By integrating eco-friendly factors into your business’ financial reporting, it shows your dedication to a greener, healthier environment.
Certified Public Accountants Can Help Drive Sustainable Practices
Certified Public Accountants (CPAs) are playing a crucial role in the sustainability movement, going beyond their traditional financial expertise. They leverage their skills to perform cost-benefit analyses, quantifying the long-term financial advantages of implementing sustainable practices. While environmental responsibility is commendable, there’s a compelling business cost-saving case for sustainability. This leads to a competitive edge in the market and a boost in your brand reputation
However, according to CPA Bryce Welker, “CPAs can develop strong communication skills to effectively convey the benefits of green accounting, address concerns, and demonstrate the value of sustainability.” It is an initiative that both parties (CPAs and businesses) can work together in the long run.
Everything Has Advancements, even the World of Accounting
Finance, accounting, bookkeeping – these all seem like areas of business that stay stagnant. But, it’s actually an interesting field that is constantly advancing. Whether it be for a good cause or for digital streamlining, it’s undeniable how far simple number-crunching has come. It’s best to stay on top of all these exciting accounting advancements to see how you and your business can take advantage of them.
If you’re looking for a partner through all of these new accounting developments, then HGS might be exactly who you’re looking for. Contact us today, and we’ll connect you with a finance team that will grow with you as the industry ebbs and flows.
