MONASH

BUSINESS

The Roles of Accountant in

Business Organisation
FOO YEE BOON FCCA
PhD, MSc, B. Mgmt (Hons), GCHE, CFP, MCS

Presented at PCU 2nd October 2019 (Master of Management)

AGENDA
History of Accounting
Role of Accounting in Business
 Financial vs Management Accounting
Future of Accountancy
 Artificial Intelligence
 Will AI replace Accountants?
 Impact of AI

MONASH
2 BUSINESS
 MONASH
BUSINESS

History of Accounting
HISTORY OF ACCOUNTING – ANCIENT ACCOUNTING TEXTS

Mycenae Museum, Mycenae, Greece

MONASH
4 BUSINESS
HISTORY OF ACCOUNTING – ANCIENT ACCOUNTING RECORD

Epigraphical Museum, Athens, Greece

MONASH
5 BUSINESS
HISTORY OF ACCOUNTING – DOUBLE-ENTRY BOOKKEEPING

 Every entry requires a

corresponding and opposite entry
to a different account – debit and
credit
 Pioneered in the Jewish
community (banker) – 11 CE
 Luca Pacioli – father of accounting
– Published a detailed description in
1494

MONASH
6 BUSINESS
 MONASH
BUSINESS

Role of Accounting in Business -

Financial Accounting
FINANCIAL ACCOUNTING

 A specialised branch of accounting

 Keeps track of company’s financial transaction -
record
 Present financial statements
– issued annually
– for external stakeholders (shareholders, bank,
government, analyst etc)
 Follow accounting standards
– International Accounting Standard Board (IASB)
– Financial Accounting Standard Board (FASB)

MONASH
8 BUSINESS
FINANCIAL STATEMENTS - STATEMENTS OF FINANCIAL POSITION

MONASH
9 BUSINESS
FINANCIAL STATEMENTS - STATEMENTS OF FINANCIAL POSITION

MONASH
10 BUSINESS
FINANCIAL STATEMENTS - STATEMENTS OF FINANCIAL POSITION

MONASH
11 BUSINESS
FINANCIAL STATEMENTS - STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INFOME

MONASH
12 BUSINESS
FINANCIAL STATEMENTS – STATEMENTS OF CHANGES IN EQUITY

MONASH
13 BUSINESS
FINANCIAL STATEMENT –
STATEMENT OF CASH
FLOWS

MONASH
14 BUSINESS
FINANCIAL STATEMENTS – NOTES

MONASH
15 BUSINESS
LOVE LETTER BY AN ACCOUNTANT

MONASH
16 BUSINESS
 MONASH
BUSINESS

Role of Accounting in Business -

Management Accounting
MANAGEMENT ACCOUNTING
 Accounting for management
 Function of management:-
 Planning
– Detailed formulation of activity to achieve defined
goals
– Tactical Planning (short-term) vs Strategic Planning
(long-term)
 Decision Making
– Choosing the best solution among many alternatives
 Control
– Monitoring the performance against its planned
objective
MONASH
18 BUSINESS
ROLE OF MANAGEMENT ACCOUNTANTS

 Forecasting
– Invest in equipment? Buy other company?
– Diversity into other markets?
 Planning & budgeting
– Predict revenues, cash flows etc
 Costing
– Make or buy?
– Cost of product?
 Performance measurement
– Build on positive variances and manage negative
variances

MONASH
19 BUSINESS
 MONASH
BUSINESS

Artificial Intelligence
ARTIFICIAL INTELLIGENCE

 Artificial intelligence (AI) - an area of computer

science that emphasizes the creation of
intelligent machines that work and react like
humans.
 Some of the activities computers with artificial
intelligence are designed for include:
– Speech recognition
– Learning
– Planning
– Problem solving
www.techopedia.com

MONASH
21 BUSINESS
AI POWERED REAL TIME SCENE

MONASH
22 BUSINESS
AI POWERED REAL TIME SCENE

MONASH
23 BUSINESS
AI - PART OF LIFE

MONASH
24 BUSINESS
MACHINE LEARNING – A BRANCH OF AI

 Systems can learn from data, identify patterns

and make decisions with minimal human
intervention
 Strengths
– Large data volumes
– Complex and changing patterns
– Consistency
 Limits
– Not all problems have the right data
– Not all problem will be suitable, eg unique question

MONASH
25 BUSINESS
AI AND THE ACCOUNTING PROFESSION

 AI technology help accountants to provide better

advice and make better decisions
– Provide better and cheaper data to support decision-
making
– Generating new insights from the analysis of data
– Freeing up time to focus on more valuable tasks e.g.
strategy development, relationship building, and
leadership

(ICAEW, 2017)

MONASH
26 BUSINESS
USE OF AI CAPABILITIES IN REAL WORLD ACCOUNTING

 Using machine learning to code accounting entries

– improve on the accuracy of rules-based approaches and
enabling greater automation of processes
 Improving fraud detection
– through more sophisticated, machine leaning models of
‘normal’ activities and better prediction of fraudulent activities
 Forecasting
– Use machine learning-based models to forecast revenues etc
 Access to unstructured data
– Improving access and analysis of contracts and emails etc
through deep learning models.

(ICAEW, 2017)

MONASH
27 BUSINESS
 MONASH
BUSINESS

Will AI Replace Accountants?

THE ARTIFICIAL INTELLIGENCE DEBATE

MONASH
29 BUSINESS
 AI can be very powerful and
are improving quickly.
 They provide outputs that can
be extremely accurate,
replacing and, in some cases,
far superseding human efforts.
 However, they DO NOT
replicate human intelligence.

MONASH
30 BUSINESS
IMPACT OF AI

MONASH
31 BUSINESS
Technologies by proportion of companies likely to adapt them by 2022 (projected)

MONASH
32 BUSINESS
Examples of stable, new and redundant roles, all industries

MONASH
33 BUSINESS
Ratio of human-machine working hours, 2018 vs. 2022 (projected)

MONASH
34 BUSINESS
Workforce in 2018 and 2022

MONASH
35 BUSINESS
Indonesia

MONASH
36 BUSINESS
Indonesia

MONASH
37 BUSINESS
 MONASH
38 BUSINESS
 MONASH
BUSINESS

THANK YOU