Industry 4.0 will impact the accounting industry. It provides standardized value to stakeholders, vendors and suppliers. Industry 4.0 should complement the new financial reporting standards that combine corporate responsibility and sustainability
Accountancy is one of the oldest professions in the world. India to open accountancy research by establishing research institutes.
“Accountancy firms should invest in technologies such as big data, data analytics, Internet of Things (IoT) and artificial intelligence (AI).
The adoption of these technologies will help the accounts keep pace with Industry 4.0 represented by these technologies, ”said Vishal Divadkar, partner and head, assurance, BDO, of ASSOCHAM’s recent virtual conference on financial reporting and control.
, ‘Recent Developments and Challenges’. Looking at the financial landscape, automated process automation can be used to capture customer data and perform repetitive tasks.
Robots can help generate invoices, which can be validated through cognitive AI. Cognitive invoice processing is faster and drives efficiency in the system.
“It is clear that technology plays a decisive role in accountancy. It also indicates that the auditors’ staff need to update their skills to take advantage of opportunities and make full use of the technology, ”said Divadkar.
The use of AI in accounting is on the rise. AI with machine learning tools is used to control data and reduce financial fraud. AI algorithms can upload documents. IoT solutions are integrated into the financial system.
Accountancy IoT can be used to improve risk management; this is desperately needed because accountants are intertwined with the risk management aspect of the company.
The real-time data emerging from the IoT can help reduce the risk factor; it paves the way for revenue growth. In addition to Industry 4.0, Covid-19 is also responsible for wider technology adoption.
“Mobility is a challenge in the days of Covid 2.0. This is where digital transactions fit in. They help to break down location barriers and facilitate a structural shift in the work pattern.
This brings other benefits such as speed, accuracy and transparency, ”added Preeti Malhotra, Chairman of the ASSOCHAM National Council for Corporate Affairs, Company Law and Corporate Governance, and Chairman of Smart Bharat Group.
Covid taught us to communicate with investors through webinars. “Digital transactions have multiplied. A click on the button will shed light on inventory and work in progress.
Technology is integrated into the system for better balance sheet outlook. But we must be vigilant against cyber attacks, ”said Amarjit Chopra, NAFRA member and former ICAI president.
Physical offices have shrunk and are being replaced by virtual offices. Rents have fallen and real estate’s footprint has decreased.
“Working from home required a change of mindset, requiring companies to invest in laptops and enterprise resource planning solutions.
When logistics were ironed out, it was important to keep compliance issues in the financial reporting. Outdated software tools have been replaced by aggressive automation.
System-driven data is used for results, ”explains Deepak Dikshit, consultant at Oman Cement Company. Since Covid has necessitated the extensive use of technology, skilled manpower is required to carry out the technology operations.
Traditionally, high-quality financial reporting only takes place in the event of fraud or if the organization collapses.
But financial reporting is required for the survival of the business and to build confidence with the investors. “Financial reporting is not just about the financial statements, but also includes transactions and ongoing transparency.
Financial statements represent the entire value chain, including the chief financial officer and regulators.
The auditor has a vital role when account statements are unclear, ”said Dr. Ashok Haldia, Chairman of ASSOCHAM Task Force on Accounting Standards, former Secretary at ICAI and former MD and CEO of PTC India Financial Services Ltd.
Companies do not work in isolation and financial reporting is the main language. The annual accounts are part of the ecosystem; they should reflect the company and what it does for society.
All of this must be measured and shared with the investor in a reader-friendly format. “Financial statements are themselves reports of the past, although they are project estimates for the future.
So it becomes all the more important for the investor community to be able to connect the past with the future of the company, ”said V Rama krishnan, former TCS Chief Finance Officer.
In this fast-moving world, financial statements are relevant to investors, stakeholders and shareholders, depending on the speed at which they are finalized.
Transparency and consistency are other features of these statements. Technology comes into play here, as intelligent engineering tools can be used for precision and data analysis.
Cloud accounting is catching up with the industry. This allows users to view the account statistics and outstanding invoices from anywhere online. Since cloud accounting is accessible through the web browser, it is cheaper than the accounting software.
Covid is a period of uncertainty and uncertainty leads to unprepared conditions, which can erode the company’s profits. Companies must therefore use technology to raise the bar when it comes to financial reporting.