Business News

Nature of accounting practices needs to change

The operations and in turn the inherent characteristics of accounting practices would need to change in the next decade as their core activities, such as SMSF compliance, were eroded through technological development, according to an accountancy consultant.

Speaking at the SMSF Professionals’ Association of Australia Sydney Chapter Christmas lunch, Smithink founder David Smith said: “The response has to be that [accountants] need to move to providing advice.

“The problem is that half the people in the accounting profession are not capable of doing that or trained to do that.

“So there is going to be a very big need in the accounting industry to change the nature of people who are employed so that they have more advisers.”

Smith said he believed the developments that had already begun would lead to greater convergence of financial planning and accounting.

He did, however, point out the established nature of accountants being the most trusted professionals among consumers meant they would probably end up taking the upper hand in how advisory practices and relationships operated in the years to come.

“Because of the brand problem around financial planning, I think there will be a drive toward more integrated services based on accounting firms where there is a great trust ingrained,” he said.

Speaking at the same event, BDO private clients partner Kim O’Brien agreed accountants would have to make a change from their current compliance-based practices to take on more of a consulting or advisory role for their clients.

However, O’Brien said she believed that would still manifest itself in different ways and not just from an accounting practice framework.

“Whether or not you collaborate that internally with financial planning and accounting within your own practice, that’s an option,” she said.

“But I still believe that other options will still exist where you may predominantly be an accountant and use specialist advisers and have a support network to collaborate advice solutions to your clients.

“But I do believe the compliance-based work that we do know will form such a small portion of your practices, it will be more about value [and] providing solutions to the client in that strategic space that we’ll all be moving into.”

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