For a majority of accountancy firms in Malaysia, technology is part and parcel of their daily operations, given the widespread use of computers, spreadsheets and accounting software. However, adoption of higher level technologies is still low, according to the Malaysian Institute of Accountants’ (MIA) recent MIA digital technology blueprint.
The report shows that while 92% of respondents occasionally or frequently used accounting software, the adoption rate of other technologies such as data analytics, fintech and artificial intelligence (AI) was below 25%. The national accountancy body also noted that while it has observed rising interest in technology among its members, there were also accountants who were uncomfortable with adoption. This highlights one of the biggest changes confronting the profession: the impact of evolving smart technology and how accountants can use it to enhance traditional ways of working.
The survey reveals that business benefits and business demands are the top two drivers of technology adoption. On the flip side, MIA digital economy task force chairman Steven Chong says that the survey lists high business costs, lack of talent to utilise technology effectively and the lack of understanding of the benefits of adopting technology as the top three barriers.
Take the initiative
‘These are very real and salient points around barriers to adoption. It is critical that accountants take the initiative to research and identify technologies that are strategically relevant and beneficial to their particular practice or area of work, and then assess how or which technology to adopt, at a suitable and palatable investment for them,’ says Chong, who is also an MIA council member.
ACCA Malaysia Advisory Committee member Renganathan Kannan says that barriers to technology adoption might exist due to scarce resources and a lack of understanding of clientele needs, as practitioners may tend to focus more on traditional and conventional accounting practices such as one-stop solution providers offering secretarial, accounting, audit and tax services.
‘In the present business environment, owners are looking for customised and timely support from professionals,’ Renganathan says. ‘And with the right and relevant analytical tools, I believe professional accountants could play a vital role in adding value for the business owners: for example, in real-time support services, timely advisory, dissemination of relevant information to the business owners, playing a vital role in sophisticated internal control mechanisms, and anti-money laundering tests.’
For Lawrence Chai, a partner at 3E Accounting, the lack of knowledge about such technologies among some practitioners is a huge obstacle to technology adoption. ‘The main barrier is that practitioners are not aware such tools are available in the market,’ he says.
While it has been suggested that Generation Y accountants are more inclined to adopt new technologies than more senior accountants, Chai believes that management support is more important than age. ‘It is more about the mindset of the top management; it is nothing to do with age,’ he says. ‘We do see many older practitioners using cloud-based accounting software as well.’
Renganathan says that the response of younger accountants to adoption is fairly good. ‘Younger professionals are managing the present situation diligently by crossworking with various experts to deliver on clients’ requirements in a timely manner,’ he notes.
Given the perceived high costs involved and specialist manpower needed, the key question is whether it makes sense for small and medium-sized practices (SMPs) to adopt such technologies. Chong dismisses the notion that adoption is suitable only for the bigger accountancy firms, arguing that the progress of current accounting technology and fintech is continually democratising access for the masses to technology and facilities that were available only to the largest organisations just 10 years ago.
On the areas where SMPs can leverage on digital technology, Renganathan believes that the growth sectors are bookkeeping, timely reports, costing and pricing analysis, internal control mechanisms, forensic accounting and anti-money laundering testing.