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EY CEO anticipates shifting dynamic in CA(SA) profession

Aug 22, 2016
EY CEO anticipates shifting dynamic in CA(SA) profession

Ajen Sita speaks like a futurist, and understandably so, he is, after all the chief executive officer of EY Africa. A strategic thinker, Sita started his career with EY as a trainee accountant in 1993. In that time, he has observed several extraordinary shifts in the chartered accountant profession which have had far reaching consequences. Now he sees another coming. One, he says EY must gain the upper hand on if it’s to grow and stay relevant. 

“We are now in the digital era,” says Sita. “Most companies have some sort of ERP system with data easily accessible. The entire value chain is more online.” Much of a chartered accountant’s (CA[SA])’s day-to-day activities will be transformed as technology is used increasingly. This is in line with a 2012 report entitled 100 Drivers of change for the global accountancy profession,a study that anticipates the adoption of intelligent tools that analyse and interpret large volumes of data rapidly, effectively transforming activities such as audit and forensic auditing.     

“We are seeing a shifting dynamic in the CA(SA) profession,” says Sita.  These changes are already happening. They are likely to impact on who takes the lion’s share of responsibility of training CAs(SA), and will influence employment in both the private and public sector.  Significantly, there will be a shift from a narrower definition of a chartered accountant’s role as a score keeper –albeit a highly skilled one – to a broader role encompassing entrepreneurial skills, innovation and information technology.

Indeed, the type of work required from large and small firms by the client is also changing. Sita is observing this within EY.  While the firm’s audit business provides large revenues, “the rate of growth in other businesses; being consulting, transactions and tax, has outstripped the audit work”.

Yet this comes with its own concerns.

“We have to invest significantly in technology,” explains Sita. “Despite our audit business growing, my own sense is we will need fewer CAs(SA). I worry that at some stage you will find the profession recruiting less. I think we are going to have a serious challenge at a national level. Increasingly it’s not just about being disruptive to ourselves, but serving our clients in the most effective and efficient manner possible.”

The knock-on implication of this, notes Sita, is that the current shortage of CAs(SA) in the country is unlikely to be filled to any great extent by the larger firms.

But there is hope. Sita notes a positive trend in the public sector. “We are finding an increasing number of CAs as CFOs. In the last five years, there are more CAs(SA) in this role than we would find before.” While in the past most CAs(SA) perceived the public sector as the less attractive option, this phenomenon is changing. He endorses the view that the public sector needs to “grow its own wood” as expressed by ex– Auditor-General and current CEO of SAICA, Terence Nombembe.  

“To us as a business, the government and the private sector are both critical parts of our organisation. For many of our staff it’s no longer more attractive to be in one or the other,” says Sita. “I would say some of our most successful partners are the ones who we have recruited from the public sector. They come from a bigger world view. It’s certainly not a limiter.”      

On the question of remuneration, Sita confirms that there is no pay advantage whether one is an audit partner in financial services or the public sector.  The scope of work can be more challenging in the public sector, giving those with ambition the opportunity to ascend the career ladder more rapidly. “I can comfortably say that some of the highest earners in our firm are the partners that serve the public sector,” says Sita.  

A study conducted in 2011 by the Institute of Chartered Accountants of Nigeria (ICAN) suggests that chartered accountants who do not develop an appropriate skill set ‘risk finding themselves at a career dead end’.  The authors cautioned that the implications are significant both for practising chartered accountants and for accounting educators. They recommend that chartered accountants allocate more time to decision support, and update their financial modelling and IT skills.

“As the audit firms need fewer CAs(SA), they will train less,” says Sita. “The public sector is a big user of CAs(SA) so the burden of training will shift.” One positive consequence is the public sector will attract many more CAs(SA) than formerly.  Change is certain: the smart thing to do is swim in the right direction.