Welcome Address by SMS Sim Ann at the DFK International & Asia Pacific Annual Conference 2019
The Accountancy Sector in a Digital-As-Usual Age
Mr Roland Graf, President of DFK International,
Mr Martin Sharp, Executive Director of DFK International,
Mr Evan Law, Chief Executive of the Singapore Accountancy Commission,
Mr Jamshid Medora, Partner of JK Medora Singapore,
Distinguished Guests, and members of the accounting industry
A very good morning to all of you. For those of you who have travelled from far away to be here, welcome to Singapore, and I hope that Singapore will have the opportunity to host you for any future meetings.
Let me share with you about a collective journey in Singapore that we have embarked upon – the introduction of the Industry Transformation Programmes (ITP) in 2016. This is about modernisation and digitalisation, bringing key industry sectors and Singapore to the next level. We have a council known as the Future Economy Council, and many of our Members of Parliament, and political office holders are working alongside our statutory boards and government agencies to uplift and bring industries into the digital age. We have put in place Industry Transformation Maps (ITMs) for the Professional Services industry, an adjacent and very important industry sector for Singapore.
These Industry Transformation Maps are public documents and alongside these transformation maps is a Digital Economy Framework for Action. The idea behind this Framework is to enhance Singapore’s digital competitiveness to serve as a business node in Asia.
The professional services ITM charts a roadmap for Singapore to become a global market node in high-value specialist services - these will include firms such as the architecture and engineering services, consulting, accounting, legal and advertising. Together, this cluster of services is projected to post an average growth of 4.6% from 2015, and reach a value add of $31 billion by 2020.
Bright Outlook for Singapore’s Accountancy Sector
What is the outlook for the accountancy sector in Singapore? I would say that macro trends present a bright outlook for the accountancy sector. We are strategically located at the heart of a fast-growing Asia. Asia is projected to represent 66% of the global middle class population and 59% of middle class consumption by 2013. Meanwhile, ASEAN’s combined gross GDP of US $2.55 trillion has made it the world’s sixth-largest economy. We are experiencing an annual growth of around 5% within ASEAN, and with this, ASEAN is expected to become the world’s fourth-largest economy by 2030.
As Asia continues to grow, companies will look to deepen their presence and also grow their regional headquarters to service this region. We believe it will correspondingly bolster the growth of Professional Services, like accountancy, especially in the areas of risk management and business valuation. To enable Singapore companies to capture these opportunities, we are increasing our efforts to accelerate technology adoption and digital innovation, and build our pipeline of local talent with deep expertise.
Allow me to elaborate. First, we know that accountants have always been leveraging technologies to complete their tasks more efficiently and more accurately. Today, we know that more firm are using Robotic Process Automation (RPA) to automate key finance processes such as bookkeeping, financial reporting, and operating accountancy. In future, combinations of emerging technologies such as AI, cloud computing and blockchain technologies could make it possible for accountants to perform real-time verification of business transactions and audits of full financial data sets.
Helping Firms Adopt Digital Technology
For that day to become reality, firms and individuals must embrace new models of collaboration, invest in technology and also deliver new solutions and services. The Precursor Group is an excellent example of a home-grown accounting firm that has innovated and come out stronger. With the support of the Capability Development Grant (now the Enterprise Development Grant) from Enterprises Singapore, our government agency dedicated to growing and supporting small and medium enterprises expand internationally, the Precursor Group has diversified from traditional audit and accounting services to also offer human resource and analytics via technology-driven and cloud-based models. Having built them product on cloud technologies, the Precursor Group was able to scale services to over 500 local and multinational clients with a team of just 60 people, and grow their business by 50% year on year.
To support more companies to transform and innovate like the Precursor Group, the Singapore government is playing an active role to foster partnerships with academia, with coders and designers, and also to co-create new solutions. The Singapore Accountancy Commission has organised the Accounting Innovation Challenge to bring new ideas to transform the accounting industry. This has brought together students, professionals, coders and designers to push boundaries and also design solutions to tackle real challenges faced by the accounting industry.
Firms can also source for digital solutions virtually through the Open Innovation Platform. This is an initiative by the Infocomm Media Development Authority, part of the Ministry of Communications and Information, and this platform aims to connect and also match real business challenges with problem solvers.
Building Local Talent with Deep Expertise in Accountancy and Digital Skills
- In a future where financial transactions can be audited in real-time, we know that there is also a need to equip the workforce with the necessary skills. The accountants of tomorrow will not only have deep technical accounting knowledge, but will also be conversant with new technologies, and be able to continually improve algorithms to make better decisions. Accountants will also be involved in the design of systems and machines that take over accounting tasks and auditors will be involved in auditing the reliability, rigor and accuracy of the systems.
To support accountants in adapting their existing skill sets, the Government has launched the Skills Framework for Accountancy in October last year. This will help our accountants better understand the range of career pathways, skills requirements, and the corresponding training programmes available. This framework, which is developed in partnership with the industry, has identified emerging skills and career advancement opportunities across 25 job roles and six tracks – which include insurance, financial accounting, management accounting, internal audit, business valuation and tax – and serves as a guide to help our firms as well as our professionals prepare for the future economy.
Singapore has also been working with international bodies to equip accountants with skills in high growth areas, such as business valuation and internal audit. Singapore organises major regional accounting conferences such as the IVAS-IVSC business valuation conference, to showcase the deep expertise of local business valuation professionals and CVA charter holders. Last year, the conference was attended by 350 delegates from 11 countries. This year, we will hold this business valuation conference on 10 - 11 October, and we look forward to your support.
I think there are some exciting times ahead for us, and there are many opportunities, both in this fast growing region and in Singapore. We are very cognisant of these macro trends and hope to be well-positioned to enable our companies to capture these growth opportunities. This is something that we have been working on and we are very happy to learn from other friends and professionals who are striving in the same direction. Let me now end by wishing everyone a very fruitful and successful conference.
- Thank you very much.