New Financial Planning Rules For 2014

According to the Financial Review, accountants should brace for upheaval.

A triple-whammy of technological change, audit reform and new financial planning rules will hit the accounting profession in 2014.

It will force career changes and consolidation, and create ­clients who are less dependent on their accountants.

Many accountants report business activity has picked up since the federal election. However, just as many, including Pitcher Partners Melbourne ­managing partner, John Brazzale, feel “growing in a slow-growth environment” will be the big challenge for next year.

“There are challenges wherever you look,” KPMG’s new chief executive, Gary Wingrove, said. But with them, comes opportunity.

Wingrove said: “Increasing regulatory pressures both in audit and tax, and the global move towards increased tendering, has already led to a number of listed companies putting their audits up for grabs.”

Overall, he said competition is strong, not just from big four rivals, PwC, EY and Deloitte, but also from boutique firms, investment banks, and strategy and consulting firms.

Balancing investment in growth with profitability in this environment requires innovation and greater efficiency. “Firms are frantically trying to avoid the commodity magnet,” said management consultant Joel Barolsky. He’s had three big firms in the past three months ask him to present on the topic of “massive process innovation to reduce costs, or service innovation to offer something unique and valuable to clients”.

Proactive Accountants Network chief executive Rob Nixon said technological change is having a profound impact on the profession, reducing the relevance of accountants as middlemen. This will hurt those heavily reliant on compliance work.

He points to moves by the tax office to link its computerised standard ­business reporting systems with commercial online accounting software.

“With one click, clients will bypass the accountant,” said Nixon.

“Businesses set up on cloud [-based software systems] won’t need their accountants as much.”

Source: | Agnes King – PUBLISHED: 11 Dec 2013