Digital technologies are altering business models and operations across manufacturing and service sectors. But what are the implications of digitalization for the accounting function? Do finance executives need to alter their work practices and rethink the value they can deliver? Bhimani’s research tackles these questions head on and presents the most recent evidence we have on how and why conventional financial work is no longer fit for purpose in dealing with the information needs of executives across organizations undergoing digital transformations. The results of his studies are outlined in his book Accounting disrupted: How digitalization is changing finance just published by AICPA/Wiley. The research shows that technologies such as miniature sensors, artificial intelligence, 4D printing, robotics and blockchain among others are reshaping accounting and altering the knowledge base the finance function must deploy and harness. As we progress into a digitally transformed business world, accounting leaders have to ask whether to continue targeting the same goals they have historically been trained to do or to pursue novel pathways in information capture, analysis and reporting that chime with the advent of digitalization and new data forms.
Bhimani’s research does not set aside the idea that fundamental economic logic continues to prevail but suggests that the mechanics of how this logic plays out in the face of digital technology usage is unravelling differently. What cannot be done therefore is to assume that digitalization offers business-as-usual operational change possibilities. That would be missing the point about its extreme potential to connect and propel more grounded and continuous engagements between people and structures and therefore, to alter how organizations can create, track and manage value creation which is accounting’s foundational purpose.
What is growingly evident is that in digital, an executive mind-set that eschews traditional notions of business fundamentals is essential. Consequently, if accounting information is to continue to service the needs of organizational decision makers, conventional ideals of what guides managerial action must also be discarded. No area of accounting and finance including cost management, corporate finance, audit and assurance, performance evaluation and financial reporting can be left unaltered in organizations that are digitally transforming. Accounting Disrupted brings together how these domains of accounting are being re-thought across digitalizing enterprises identifying step-by-step what finance executives need to address. For instance, Bhimani reports that where digital technologies are deployed, they alter processes all the while triggering further changes that become essential but impossible to predict at the outset. Firms cannot entirely fathom where digital paths will take them, but new data analyses are required to point to ones that should be pursued.
By drawing on a wide range of corporate lessons, cases studies, surveys and interviews with finance, technology and information professionals, Bhimani’s book points to key issues facing accounting and audit professionals and the remedies that are being used by avant-garde firms to address digitalization requirements. For instance, in the book, Sir Martin Sorrell (Founder & Executive Chairman of S4 Capital plc) recognises that digitalization is disrupting everything including accounting. EY, the professional services firm, notes based on Professor’s Bhimani’s findings, that that the convergence of new technologies is creating a new paradigm for the field - everything we thought we knew comes under question. An Oxford University professor sees the research results as having the power to shift the whole profession’s modus operandi in that financial management and accountancy are being re-thought.
For accountants is now essential to analyse multiple sources of data and understand that learning from data is accelerating business thought which, in turn, positively drives more data. Knowledge growth begets knowledge growth which perforce requires swift and focused changes in information experts’ work particularly that of accountants. Big data machines, blockchain technologies, robotic process automation, and artificial intelligence among others are placing new responsibilities and opening avenues for finance and accounting work as well as for auditing and assurance practices. In other words, digitalization is mobilising a new order of value creation which will leave accounting behind unless the field re-invents itself.
Ultimately, Bhimani’s research will prove disturbing to accountants who seek to maintain the status quo as he delivers in his book, a compelling call to arms for members of the accounting profession to embrace a novel mode of thinking. Harvard Business School’s Dean considers Bhimani’s research findings as providing a “very valuable roadmap” to understand how automated technologies are changing every area of business and how accounting is playing catch-up because financial reporting, costing, auditing and information activities are all impacted. It is becoming increasingly clear that the disruptive impact of digital technologies on societal and economic activities will see few bounds. Accounting cannot afford to trail.