Notes – ACCA Africa Members Convention – Evolution
With over 800 delegates from 38 countries, the ACCA Africa Members Convention may be the biggest gathering of accountants in the continent. Kigali Convention Centre in Rwanda was the host of the 2019 convention between 09th to 11th December 2019.
The convention was jam-packed with multiple plenaries and breakout sessions relating to the evaluation of finance particularly in technology, accounting standard, leadership, governance, diversity, economy, ethics and talent development.
As an author, trainer and fellow of ACCA, I took note of some learning points from the sessions I attended and also read some reports referenced by the speakers. I hope this note will benefit those who are unable to attend the convention, more especially accounting students.
“The current trends of rapid global changes require regional professional bodies to create synergies, share experiences and best practices to remain relevant.” – Jamil Ampomah, Director of ACCA Sub-Saharan Africa
The theme of this year’s convention was The Evolution of Finance: Africa thriving in a disruptive sociotechnomic dispensation.
You will agree with me or at the end of this note that the theme is very relevant as technology continues to disrupt every sector and more recently the finance function. Jenny Gu, the ACCA President, emphasised the impact of technology as it liberates millions of people and continues to create more opportunities. Jenny also gave insight into a recent ACCA employer survey which revealed what the employers expect from their accountants. Among the top key skills includes blockchain, big data, Excel, analytics, cybersecurity, commercial awareness, strategy and leadership.
2. Agile Finance is Digital Finance
Business agility refers to those qualities that allow firms to rapidly respond to internal and external environment changes while focusing on their vision. Agility is critical for finance leaders as the role of a CFO is evolving from finance specialist to a business partner or strategist, who should help CEOs navigate the changing business landscapes, spot new business opportunities and drive growth. An agile finance model demands the finance leaders change their operating models to an agile approach through the digitalization of finance functions.
Artificial intelligence and machine learning are radically transforming how the business operates, especially finance. Routine tasks are being automated so that finance professionals can focus on what matters most – identifying the business growth market. – Safra Catz, CEO of Oracle
Oracle team presented interesting research about agile finance. The report shows that there is a positive correlation between adaption of digital finance and revenue growth of an organisation. It also revealed that the digitalisation of finance plays a much stronger role in driving enterprise-wide digital transformation.
According to Oracle insights, the digital finance operating model covers three key areas:
- Operational Excellence: Driving process automation at scale, re-engineering legacy finance processes, and keeping a “digital-first, cloud-first” mindset
- Digital Intelligence – connecting data enterprise-wide, using AI to uncover hidden patterns and gaining a clear view of which data has the most value to the business
- Business Influence – Partnering with the business, using data-driven insights to recommend new courses of action, and influencing business strategy.
Interestingly, the majority of the survey participants believes that their finance team are lagging far behind when it comes to digitalisation of finance. Only 10% of the participants believes that their finance team has the skills needed to support their organisation’s digital ambitions.
Therefore, the major takeaway from the Oracle research for finance leaders includes:
- There is an urgent need for finance leaders to adapt the new finance model or they will fall behind
- CFOs cannot drive enterprise growth and strategy without the digital finance operating model
- New technologies are enablers to the digital finance operating model.
3. Machine Learning session
Narayanan Vaidyanathan, Head of Business Insights at ACCA led this session. The ACCA’s survey (April 2019) of members and affiliates reflected challenges when asked about their understanding of terms such as AI, ML, natural language processing (NLP), data analytics and robotic process automation (RPA). On average, 62% of respondents had not heard of it, or had heard the term but didn’t know what it was or had only a basic understanding. This report suggests a lot of potential for greater education and awareness building among the accountancy community around the world.
Therefore, Narayana started with the basic explanation of the key terminologies and how they are related using an image similar to the Venn diagram.
- Artificial intelligence (AI) is the ability of machines to exhibit human-like capabilities such as thinking, understanding, reasoning, learning or perception. It also includes the ability of the machine to make decisions on the basis of these processes.
- Data analytics (DA) refers to the ability to conduct data analysis to extract insights using a variety of techniques. DA is generally seen as a task that is controlled and led by explicit human instructions.
- Robotic process automation (RPA) is a piece of programmed software that implements a defined sequence of activities – like a high-end Excel macro that automates processes.
- Machine learning (ML) involves the machine, over time, being able to learn the characteristics of data sets and to identify the characteristics of individual data points. This allows it to identify relationships in complex and large data sets that would be more time consuming or more difficult for a human to see.
- Deep learning (DL) and Natural Language Processing (NLP) are generally thought of as being within the ML family. They can handle more complex data, including unstructured data, such as images. This can allow for greater complexity of patterns that can support, for example, image recognition or speech recognition.
3.1 Opportunities for accountants to bridge human and digital
Accountants can truly benefit from the ability of new technologies such as ML to support us in the intelligent analysis of vast amounts of data. However, we have to take the opportunities to develop an understanding of these emerging technologies while building our interpretative, contextual and relationship-led skills.
3.2 Opportunities AI may offer includes:
- Weak AI does not fully replicate human contextual understanding and integrated thinking
- Legal, societal and cultural values founded on the principle that only individual people or corporate entities can be held accountable
- A professional accountant is expected to have an opinion, and be liable for its consequences
- Judgement/interpretation can draw on multiple factors – future choices not just about past patterns
There is a continuous maturing of the discussion around ML, and AI more generally. Some will embrace it. Others will fear it. But only the reckless will avoid finding out more about it. – ACCA 2019
4. AI Leadership – Ethics
As finance teams adapt digital models to drive growth through new opportunities, there is a need to consider ethical compromises from the decisions made by the algorithm.
- AI may not always give the correct decision, particularly when are they fed with biased data. For instance, a certain group of customers may be excluded from the analysed data. Therefore, we should continue to remember the old saying “garbage in and garbage out”. As the decision-makers, we should always use our analytical minds on the AI’s output.
- Additionally, we should note that in the existing regulation and law, the consequence of all decisions lies with human beings, not AI. Of course, this will be a key focus of discussion for the years ahead.
- Care should also be taken about the cookies we accept on websites. Most of the cookies are tracking our online activities. This enables data collectors to use our information into their big data. They will learn about our patterns, commonly visit websites and know us more than ourselves. Data collected through these cookies should not be used to manipulated or unethically influence consumers’ behaviour.
While ethics start from the top, it is the responsibility of everyone to create an ethical business environment. The effort to enforce ethical decision making should be conscious work through training, lead by example and culture. Do not just create a checklist of ethical processes.
5. Diversity in Business and Finance
Dr Terraria Trent said that “Success is not about meeting our personal financial or development goals. It is about connecting our goals to the great good of the community”.
The convention also discussed diversity, especially supporting women. An exemplary institution that supports diversity is the ACCA with over 60% of council members being women. Delegates were challenged to create platforms and opportunities through which women can learn and participate in economic activities such as boardroom, government and other key decision making tables. References were made to research reports which show a positive correlation between gender diversity and good economic performance.
As Fela Durotoye said “Let us think about the success of the community. Your success is not enough, the continent must succeed. But this can only be through working together.”
Therefore, as business leaders, we must lead better narratives that will encourage inclusiveness, sustainability and right assessment of value our firms. This reminds of me a challenge Dr Ndidi Nnoli -Edozien, the Group Chief Sustainability and Governance of Dangote Industries Ltd tasked the accountants. She challenged accountants to think of a mechanism through which people should be considered as assets in the statement of financial position instead of as an expense in the income statement.
6. Sustained employment of accountants
You should probably appreciate that the digitalization of finance functions is more of a science than fiction. Starting from RPA, AI to ML, all traditional finance functions can be possibly automated. However, do you start to think about how accountants can remain relevant?
Well, the answer is easy and complex: Accountants must acquire skills and knowledge that will be relevant in future businesses.
There was a special session on sustained employment.
But before I share more details about that session, I will encourage you to read the recent ACCA paper on the drivers of change and future skills. This report identifies the main drivers of change that will have the most impact on the profession, plus the technical, ethical and interpersonal skills and competencies that will be required in the future. An ‘optimal’ mix will vary across specialist domains, roles, organisations, industries and geographies, and it will evolve in response to change. However, all roles need to maintain the highest levels of ethical conduct, independence and professional sceptics will remain constant.
Back to the session!
Kinsley E Ngwese, CEO of NERCO Cameroon, explained employability as developing a mindset that produces an environment suitable to develop and gain knowledge and skills needed at the desired job(s) by employers. It also involves sustaining and growing in a job and the ability to shift career in different function or sector.
Joseph Wolabi, ACCA Global Council member and Director Deloitte Australia, presented key triggers of new opportunities as well as how accountants can maintain sustained employability.
6.1 Opportunities for accountants: What are the triggers
Every change comes with an opportunity. As the global economy evolves, so do the finance function. The old function will be automated but there will new opportunities too:
- Globalisation: IFRS, M&A, international tax
- Climate change: sustainability reporting, strategy & communication, supply chain assurance
- Cyber vulnerabilities: Pen test, vulnerability assessment, control control, I.A
- Digital innovation: data analytic, IT audit, blockchain advisory
- Conflict of interest: governance, risk, ethics, remediation, conduct etc.
6.2 Sustaining employability
We can only benefit from the opportunities above (6.1) when we are prepared. How can we prepare ourselves?
- Leverage CPD events
- Develop new skills – technology is an enabler
- Anticipate changes and prepare for them.
- Network appropriately
- Global village mindset- pick a new language, work on cross-department projects
- Stakeholder management
Just after the session on employability, I asked Joseph about the importance of networking:
7. African Continental Free Trade Agreement
On the 3rd day, discussions started with The African Continental Free Trade Agreement (AfCFTA) which is in force between member states. AfCFTA was signed in Kigali, Rwanda, on 21 March 2018.
Taiwo Oyedele, ACCA Global Council Member and Partner in PWC Nigeria, made an interesting presentation about AfCFTA. The key take ways include:
7.1 Protocols under the AfCFTA
- Protocol on Trade in Goods: State Parties are to treat the products imported from other State Parties (after customs clearance) in a manner no less favourable than how “like” or similar domestic products of the national origin are treated.
- Protocol on Trade in Services: State Parties are to treat the services and service providers of other State Party in a manner no less favourable than how “like” or similar services and service providers are treated.
- Protocol on Rules and Procedures on the Settlement of Disputes: Establishment of the Dispute Settlement Body (DSB), Dispute Settlement Panel (Panel) and Appellate Body (AB).
7.2 Opportunities for Accountants in AfCFTA
- Mobility of labour and professional skills
- Mutual recognition of qualifications
- Scale and capacity for big bets projects
- Leverage existing infrastructure and trade opportunities – AGAP, Africa’s Silicon Valley, Fintech etc.
- Support government with policy review and formulation
- Cross border partnership and collaborations
- New skills and services, e.g. Arbitration, languages, IT solutions
- Support for businesses shared prosperity from productivity gain and allocative efficiency
7.3 Risk and Potential Challenges of AfCFTA
- May stifle domestic sectors that are not regionally competitive
- Household skills mismatch could result in job loss to expatriates
- Could worsen the effect of contagion risk on the economy
- Regulatory capacity and readiness challenges
- Loss of regulatory autonomy
- Language barrier in Africa
- Poor Transportation network
- Multiple African currencies
- Africa should take part in 4th industrial revolution
- Politicians should involve other stakeholders
- We need to fight corruption
7.4 What is Next?
- Learn – Read the treaty
- Get involved – Leverage platforms – regional initiatives, insights etc.
- Think Ahead – What is in it for Africa.
- Lead -Lead from the front. Learn new skills, make new connections, take initiatives.
8. Africa’s overlooked business revolution
McKinsey presented a report which offers a strategic guide to doing business in Africa based on interviews with executives, case studies of thriving companies in sectors ranging from banking to technology to manufacturing, and proprietary McKinsey research.
8.1 Trends in doing business
- A young, fast-growing, urbanizing population with big unmet needs
- An industrial revolution in the making
- Africa’s infrastructure gap and the big pish to close it
- Untapped resources wealth and innovations to unleash it
- Rapid adoption of digital and mobile technologies, creating a leapfrog opportunity.
8.2 How to win in Africa: A Strategic Guide
- Map your Africa strategy
- Innovate your business model
- Build resilience for the long term and
- Africa’s talent
Dear accountants and finance professionals,
It is now clear that the evolution of the finance function has just started. The evolution demands new expectations from accountants, but it also brings new opportunities. There is evidence that many accountants need a paradigm shift. Our key stakeholders including CEOs and boards, want the finance function to provide data-enabled decision support, spend more time on strategic issues and drive major transformations such as digital finance model.
On the other hand, recent reports including the Mckinsey survey of finance executives shows that CFOs still spend more time on traditional finance activities than the time on digital trends. Therefore, we must strike the right balance among several emerging areas that need our attention. Several core principles can help us take advantage of these opportunities and remains relevant in the businesses, but the key areas are digital finance model and talent development:
- Embrace digital finance model – We know that the finance departments are increasingly becoming owners of the critical business data as companies push for the “single source of truth”. Finance must, therefore, take ownership of digital technology and to ensure it benefits the overall organisation. Let’s take a proactive leadership role in digital strategy than to wait for our colleagues in other departments.
- Talent development – Building capability of the finance team has never been more important than this evolutionary time. Therefore, finance leaders must lead in learning new competencies and skill across the seven constituent areas of the ACCA PQ. Talent development should be inclusive and embrace diversity.
In the end, the competition is not between AI and accountants but rather AI will allow us to focus on what we can do best as human beings.
10. Thank you
Thank you for reading this note and hopefully see you in the ACCA Africa members convention 2021 in …….. ( Thank you to Jamil and his team).
My name is Ebrima Sawaneh, an accountant, author and public speaker.
Am fascinated at your excellent compilation skills. You made it appear even better as if I was at event venue recording as it is being transmitted. I greatly appreciate you for this effort Sir. Would be interested to attend any of your seminars or trainings.
Thank you Vincent. Feedback appreciated. We will let you know.
Amazing job you have done with this summary. Thanks a lot. I will share with my team at work.
Thank you Adebola