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The Fourth Industrial Revolution cannot replace human values of ethics and trust – Agulhas

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The digital revolution may overhaul the way accountants and auditors operate, but it cannot replace the values and ethics that are the human elements lying at the foundation of the profession, said Bernard Agulhas, CEO of the Independent Regulatory Board for Auditors (IRBA).

Speakers at the Saiba Quickbooks gathering in Sandton on the Fourth Industrial Revolution and how it will impact the accounting profession. From left: Luyanda Ngonyama, Department of Social Development, Adv Rory Voller, Commissioner CIPC, Bernard Agulhas, CEO of IRBA

“Values and ethics are human elements, and they will always be there. If auditors don’t behave ethically, if they are not independent, that is not something technology can change. In the auditors’ space, behavioural competencies have become more prominent. This maybe sounds negative, but that’s not something that technology can change.”

Speaking on Wednesday at the SA Institute of Business Accountants (Saiba) yearend event on the role of the digital revolution on the accounting profession, Agulhas said auditors were the only segment of the accounting profession covered by regulation. “The profession has adapted to every revolution that went before it, including industrialization, so it will adapt to this one too.

“Until now we didn’t have the necessary data to assist auditors and to identify where the risks are. We at IRBA are looking at digitisalising processes, but this brings new risks with it. Now we have to acquire competencies to monitor auditors, and we need to upskill our staff so they can monitor the auditors. Failures, where they occur, happen at board level, and that is not something that auditors are necessarily equipped to detect and monitor.

A packed auditorium at the Saiba Quickbooks event at Capital in the Park in Sandton

“For this reason we need an oversight body for the whole financial reporting system, and we have sent a proposal to the minister to legislate this process. If IRBA’s role expands to cover the entire financial reporting system, we will need more intelligence and resources, and this will cost money and infrastructure.”

Advocate Rory Voller, commissioner for the Companies and Intellectual Property Commission (CIPC), said the first time he had heard of 4IR was from former trade and industry minister Rob Davies. “He asked how we as CIPC was going to make ourselves relevant. We’re both regulator and a service provider in terms of registering companies and maintaining a database of company information. We call it innovation. My staff live and breathe innovation.

“What’s important is what the citizen or the customers wants, and not what we think internally. We’re now embracing cloud services and while we’re not where we want to be in terms of technological advancement, we’re getting there.

Agulhas said he did not see automation as a threat. “Professional accountants must continue and develop tech skills. As we enter the digital revolution, our focus on professional skepticism becomes even more intense. Accountants will have to see how to they can adjust to the technology and offer services.”

The Department of Social Development (DSD) was likewise embracing technology as a way to improve efficiencies and accelerate digital delivery. Luyanda Ngonyama of the DSD said there are more than 200,000 non-profit organisations registered with the Department with us and they are required to submit reports. “Without technology, they would have to travel to Pretoria and bury the department in paper. There is a steady move to online submissions, as paper applications get lost. However, the digital revolution is not happening as fast as the department would like, as most people in the NGO space are social workers and they are often resistant to change.”