How Artificial Intelligence, Robotics Will Affect Jobs Of Accountants
Mazi Nnamdi Okwuadigbo is the 55th president of the Institute of Chartered Accountants of Nigeria. In this interview with VICTOR GBONEGUN, he spoke on the disruption by technology in financing and other businesses and the need to rid the nation of corruption through collaboration among all stakeholders. He also x-rayed the challenges in the budgeting process and institutionalizing corporate governance.
The buzzword now in bookkeeping is forensic auditing to detect fraud and account padding. Do you think this has helped and what more should be done to check fraud in the country?
There is no doubt forensic auditing is gaining wide acceptability across countries. This is in line with the global community’s commitment to sanitizing economies of the world from corruption. As a proactive Institute, ICAN in 2001 established six faculties and an additional one in 2015. These faculties, one of which is Audit Investigations and Forensic Accounting, are specialized areas of accounting aimed at building the competencies of our members in these areas. Over the years, the institute has produced several hundreds of forensic accountants who are contributing to the investigation value chain in the country.
No doubt, the creation of this faculty by the institute has contributed to the fight against corruption and other financial malpractices in the country. I must, however, add that for fraud and corruption to be adequately tackled, there must be a collaboration between all the stakeholders in the corruption-fighting spectrum. Corruption is a cankerworm in any polity and to fight it effectively would require putting all types of machinery in place in a strategic and collaborative manner.
A major area of focus for the Federal Government in curbing corruption. What is ICAN doing to help the government realize this objective?
This Presidential Year would ensure that chartered accountants play more profound roles at finding lasting solutions to the myriads of challenges facing the economy including corruption and other forms of financial malpractices. The unfortunate narratives of corruption in the country have no doubt reached a highly disturbing climax. Hence, we are supporting the various initiatives of government at tackling the malady of corruption.
On our part, we have several initiatives to contribute to the current fight. As you are aware, in October 2018, we launched the maiden result of the ICAN Accountability Index (ICAN AI). The ICAN-AI is an initiative for improving public sector financial management at the three tiers of government. The objectives of the ICAN AI among others include encouraging fiscal responsibility and good public finance management, tackling corruption by engaging quality professionals in the public sector and providing a holistic, objective and evidence-based framework for assessing the performance of public sector entities.
In addition, we have in place our whistleblower fund since 2015 to support and compensate our members who report any form of a financial misdemeanor in both the public and private sectors of the economy. Our disciplinary machinery is also very strong to mete out appropriate punishment to any erring member. The accounting profession is so central to fighting corruption that we cannot allow professionals to be part of the problem. Over the years, we have de-registered some members found guilty of gross professional misconduct.
We continue to create the needed awareness through advocacy on the impact of corruption in society. This Presidential Year would also engage, more regularly, with government agencies saddled with the task of fighting corruption in the country.
The role of technology in financing has become a global requirement for professionals. How are you ensuring skill development for members in this regard?
We are building the capacity of our members on the emerging technologies in the profession. We have a faculty on consultancy and information technology, which provides up-to-date information, news and guidance to members on a wide range of issues including advice on analytics, cybersecurity and data protection and many other IT-related issues. The faculty also conducts certification programs in specialized technology areas for members of the institute.
Recently, ICAN organized the first Accounting Technology Summit. The summit set the tone for a new accounting framework in the country premised on technology. You will agree with me that advances in technology are reshaping business models and we need to equip ourselves as chartered accountants on the disruption that is bound to occur with developments in artificial intelligence, robotics, machine learning, and blockchain technology.
Artificial intelligence is fast-gaining ground in the marketplace. Can robots do the work of accountants under the new trend and how is ICAN preparing for this evolution?
Artificial Intelligence, together with other disruptive technologies such as blockchain technology, robotics, machine learning and Internet of Things among others is to redefine business models in the next few years. No sector of the economy would be spared of this disruption. This is the primary reason why at ICAN one of our primary focuses is to continue to create awareness among our members and other stakeholders on the impact of these technologies on the accounting profession and the skills and competencies accountants should acquire in the face of the disruption.
These disruptive technologies may put a lot of professionals at risk of losing their jobs. But it also provides huge opportunities for professionals who would take the bull by the horns and equip themselves with the skills and competencies required to make themselves future-ready. These disruptive technologies, including robotics, will not entirely take the job of accountants, but they would replace routine jobs that can easily be programmed with minimal human interferences.
Experts and other economic watchers have rated the country’s budget system very poor. What advice would you give the government to ensure an efficient budgeting framework?
It is worrisome that the country is still in the throes of the poor budget process. Budget, being the bedrock for all financial planning in a fiscal year, is not only critical for government activities but helps in decision making and projections for investment purposes by players in the private sector. Hence, the experience in the last a couple of years where budgets were not signed until midyear tells a lot of discouraging stories about the country’s economic performance. For instance, the President signed the 2019 appropriation bill, in May. This implies no serious financial transactions took place by the various Ministries, Departments and Agencies (MDAs) of government until June. Technically, one can say the economy was at a halt for the first five months of the year since the inability of players in the private sector to know the government’s direction would also constitute a drag in their investment drive. This leaves much to be desired.
As we all know, the weak budgeting infrastructure in the country is not due to lack of capacity or experienced professionals. Essentially, undue political interference is a major challenge that has bedeviled the country’s achievement of an efficient and effective budget system. A country’s budget is such a sensitive financial instrument that should not be turned into a pawn in the chess of politics.
There is also the need to critically look into most of the assumptions underlying our budget preparations. Such assumptions should not be based on a parochial interest of any sitting government but rather on a holistic analysis of the country’s economic dynamics. A situation where a larger percentage of the budget, sometimes about 70per cent, is servicing recurrent expenditure does not also portray a country poised at deepening investments in capital expenditure that spur growth and development.
As part of our advocacy mandate at ICAN, we regularly organize budget symposia as a way of assisting the government in developing budgets that would address the peculiarities of our economy. Such symposia are also intended to educate the public on the need to hold the government responsible on public finance management in the country.
Adherence to corporate governance is being emphasized by international accountancy bodies like Pan Africa Federation of Accountants (PAFA), Association of Accountancy Bodies in West Africa and International Federation of Accountants (IFAC). How have you repositioned the practice in line with operational transparency?
I am happy that you raised this issue. As you are aware, when the Financial Reporting Council of Nigeria (FRC) released the draft 2018 Nigerian Code of Corporate Governance, we submitted our recommendations as an institute after organizing a stakeholder’s forum that critically reviewed the exposed draft. This is one of the ways we are repositioning the practice of accounting for operational transparency.
We engage regularly with regulators and players in the country’s business space on the need to promote good corporate governance as a sine-qua-non to attracting the much-needed Foreign Direct Investments (FDIs) into the country.
The institute’s Whistleblower’s Fund of N50 million set up in 2015 is another initiative of ICAN to promote operational transparency. The fund is used to protect ICAN members who report any form of a financial or operational misdemeanor in both the public and private sectors of the economy.
The accounting profession has really come a long way in terms of the contributions to the social and economic development, promoting transparency and probity in financial matters. What plans do you have to further grow professionalism?
As the watchdog of the economy, accountants have the professional responsibility to contribute to national growth and development. Over the years, ICAN members have lived up to this expectation and we have seasoned chartered accountants and financial experts. These individuals continue to be the repository of professional and technical advice, assisting government at all levels to formulate practicable policies aimed at repositioning our economy. In addition, ICAN is at the vanguard of promoting ethics, transparency, and probity in the country. Of course, we cannot afford to fail in this regard as this forms the thrust of the institute’s motto of Accuracy and Integrity.
The 2019/2020 Presidential Year is poised at building on the legacies of the founding fathers and past presidents of our noble institute. We are renewing our resolve to deepen the accounting profession’s contributions to the economy. We would ensure that ICAN members remain at the cutting-edge of knowledge in the profession. Equipped with this knowledge, they would be well-positioned to provide informed advisory roles in their various organizations thereby impacting on the general economy. Hence, the continuing professional development program for our members is a mission-critical for our administration.
The creation of more awareness on members’ adherence to the ethics and code of conduct of the profession is another focal point for this Presidential Year. While various organizational scandals cannot be blamed entirely on the failure of accountants, allegations are rife that these scandals would significantly reduce if accountants are more proactive. We are deploying both moral persuasion and, if need be, the disciplinary framework of the institute at ensuring that members abide by the code of ethics of the profession.
We would collaborate with other local and international bodies in our drive at promoting professionalism and capacity building in the country. ICAN is of the firm belief that an economy is as strong as the quality of the professionals in the system. As our members operate in a global space, the institute would create channels and opportunities that would enable them to interact and share ideas with professionals from other climes.
International Financial Reporting Standards (IFRS) has become a global standard. What is ICAN doing to aid an understanding of the IFRS 9 with respect to profit and loss provisions? What is ICAN doing to enforce compliance to the Standards by its members?
To ensure that our members remain attuned to the IFRS, we organize training on various aspects of the standards. The curriculum for our MCPE is structured to adequately fill the knowledge gap in the understanding of the IFRS 9. Equally, we have a faculty that runs a certification program on the standards. As a result, we have members of the institute who are duly certified as experts on IFRS.
To ensure compliance to the standards by our members, we create regular awareness on the need for members to join the global business community through adherence to the principles of the standards. We also have various disciplinary channels to discipline members who fail to comply with the Standards and this also serves as a deterrent to others.
In the alternative, how can governments at all levels boost their tax collection drive rather than subject firms to multiple taxes?
My submission is that there is a need to develop a strategic approach at ensuring that all citizens are brought to the tax net. This would guarantee more tax inflow into governments’ coffers. Governments at all levels should also develop incentives that would encourage tax collection by tax administrators. These may include setting ambitious targets for tax administrators in relevant agencies and rewarding identified staff for an excellent performance. Regular training on tax collection should be organized for the administrators.
What roles can accountants play in revenue generation and tax management in the country?
Chartered accountants are key players in revenue generation and tax management in the country. Over the years, our members have been involved in tax practices. To further deepen chartered accountants’ contributions to the country’s tax system, ICAN’s Council in 2018 approved the Implementation of Taxation Strategy by the Taxation Faculty Board of the Institute. The thrusts of the ICAN Tax Strategy Document are to influence the tax system positively in all key areas of tax policy, legislation, administration and adjudication; make ICAN a reference point and a voice for tax and fiscal policy matters in Nigeria and internationally; set standards and guidelines for tax practice in collaboration with other relevant bodies; enhance members’ value proposition through quality training, skills development programmes, recognition and practice protection and; promote transparency and accountability in the tax system for the overall good of society.
Talking about the growth of Small and Medium Scale Enterprises (SMEs) in Nigeria, what support can ICAN give in terms of bookkeeping to boost that sector?
The SMEs are the backbone of an economy and a large number of our members who belong to the small and medium-sized practices are providing vital services to the sector. We organize sessions to educate operators of SMEs on the need to keep accounting records. The syllabi of the Accounting Technicians Scheme, as well as the foundation levels of the institute’s examinations, are all designed to promote bookkeeping.
What international collaboration is ICAN establishing to deepen the practice among members?
As you are aware, ICAN is a founding member of the International Federation of Accountants (IFAC), the body that regulates the accountancy profession in 130 countries of the world; the Pan African Federation of Accountants and the Association of Accounting Bodies in West Africa. We currently conduct the Institute’s examinations in UK and Cameroon and have District Societies in Canada, USA, Malaysia, United Kingdom and Cameroon.
As at today, ICAN is one of the largest professional accounting organizations in Africa. To evidence the quality of the ICAN brand, the institute has entered into reciprocal arrangements with reputable foreign professional bodies like the Institute of Chartered Accountants in England and Wales (ICAEW) and the Chartered Institute of Management Accountants (CIMA) ICAEW and CIMA. These are testimonials about the quality we represent. This is also one of the reasons the ICAN brand is the toast of employers both in the private and public sectors within the country.
We are however not resting on our oars as we continue to seek reciprocity arrangements with other renowned accounting bodies across the world. With reciprocity arrangements in place, the job mobility opportunities of our members would be enhanced, as they would not have to write all the examination papers of these professional bodies with which ICAN established reciprocity arrangements.
What are you doing to enforce a code of conduct for members and in what areas are members contributing to the growth of organizations in the country?
The institute has a very robust framework to deal decisively with cases of professional misconduct. Our Investigative Panel and Disciplinary Tribunal are safeguards put in place by ICAN founding fathers to ensure members adhere strictly not only to the profession’s code of conduct but also the motto of the institute – Accuracy and Integrity.
Our members are occupying very strategic positions in both the public and private sectors of the economy as trusted advisers and administrators. It is also important that I place on record that from the 250 members that started the institute in 1965, ICAN has produced over 48,000 chartered accountants, 24,000 accounting technicians and with over 120,000 students.
In what specific areas do you plan to assist in the economic transformation of Nigeria?
As I earlier mentioned, our primary focus is in the area of continuous professional development. Human capital is a key factor for economic and structural transformation of any country. The central place of the accounting profession even makes it more imperative to encourage life-long learning among chartered accountants.
Also, we would continue to use our different knowledge events platforms, such as economic discourses and stakeholders’ fora, to provide the institute’s stances on topical issues in the country aimed at the economic transformation.
Do you think it’s lawful/right for Federal Inland Revenue Service (FIRS) to direct banks to deduct corporate taxes from companies’ accounts with them?
The Federal Inland Revenue Service (FIRS), being an agency of government established by law, is expected to act within the purview of the law establishing it. I believe FIRS would not act against the statutory provisions for tax collections. Hence, if the service eventually directs banks to deduct corporate taxes from companies’ accounts with them, this should suggest that the service has the statutory right to give this order. If IFRS is, however, acting outside its statutory mandate, then there are channels of reporting such as appropriate government arms for the necessary redress.
What should Nigerian accountants expect in terms of programs and capacity development from your presidency?
As I noted in my acceptance speech, after a painstaking analysis of the fundamentals of our profession in relation to effective and efficient services delivery, this administration has resolved that capacity building would continue to be a strategy in the scheme of events. Due to this commitment, we have tagged this Presidential Year as “Harnessing internal capacity” which translates to empowering our internal skills, building stability and sustainability.
As a body that operates in the global space, we would ensure that our members’ professional capacities are built to enable them to compete favorably well with chartered accountants from other climes. We would intensify our strategic approach to leverage technology in delivering cutting-edge services to our various stakeholders. In this Presidential Year, we shall reinvigorate our e-learning facilities. This will be of benefit to our members in diverse locations to maintain and be up-to-date with their Mandatory Continuing Professional Education (MCPE).
As seasoned professionals, we will, in words and actions, remain the foes of deceits and champions of honesty. We are prepared to support our members to ensure that they continually render value-laden services to clients, employers and the society at large in strict conformity with the ethics of our profession.