The aims of the new financial reporting standards introduced over the last few years were to make reporting requirements of specific companies relative to their size, reduce the complexity of the UK GAAP, and bring the UK’s financial reporting schemes in line with International Financial Reporting Standards (IFRS).
But while expected - and to an extent - prepared for, the transition from the UK GAAP (Generally Accepted Accounting Principles) financial reporting scheme to the new reporting frameworks of the FRS 101, 102 and 105, has presented a massive and complex change for accounting professionals struggling to stay compliant.
What has been the impact of UK accounting regulations on the role of accountants?
Though many accounting organisations were ready for the transition, the level of ‘readiness’ across the board varied – with many staff struggling to cope with the new reporting standards. According to research we have carried out, almost a quarter (24%) of UK accountants said that the additional work required to adopt changes to industry regulations or mandates was enough to make them quit.
And, to further accentuate that point, according to our research; on average, office workers spend over three working weeks per year searching through paper documents. In an industry that is already struggling to retain staff, these statistics are unsettling.
So how can Accountants be prepared for future regulation changes?
With digital initiatives such as Making Tax Digital coming into effect (encouraging businesses to acquire compliant software and technology) as well as the unknown implications that Brexit may have, firms need to ensure they are adequately prepared and equipped to cope with the impending digital landscape and future UK accounting regulation changes.
Establishing procedures and investing in technology to take away the manual burden of keeping up with legislative updates is key for accountants looking to retain staff and attract new talent. By incorporating modern technology including cloud-based services into their day-to-day activities, accounting firms can improve efficiency, scale up their operations and offer higher quality services to clients.
Cloud technology, process automation and big data analysis all provide accounting firms with the opportunity to:
- Keep track of new regulations and amendments to current legislation with frequent software updates to ensure compliance
- Rapidly increase their productivity, allowing accounting to concentrate on technical tasks
- Utilise data to identify trends and opportunities – allowing firms to not just provide audit, but also consultancy services
Our research shows that there has been a strong drive towards improving technology. Over half (54%) of UK accountants believing that their organisation’s key priority in the next five years is the implementation of a new technology stack, and around seven in ten (73%) of accountancy practices already using Cloud technology in their core business strategy.
A promising sign in the industry is that accountants are also reassured by the security of the Cloud, with 70% believing that Cloud tech is “secure” or “highly secure”. It will also be interesting to observe how younger accountants take up Cloud technology, as the security concerns surrounding the cloud are even lower, so younger accountants may be responsible for a sudden increased uptake in Cloud tech.
To find out more about the changing landscape of the UK accountancy profession in 2017, click here to download the full research report.