Linda Espahbodi

Multi-stakeholder alliances are essential to developing and maintaining a diverse talent pool for the Fourth Industrial Revolution (4IR). 4IR, the advent of cyber-physical systems (CPS) , involves new uses of technologies created by the internet and automation during the third revolution. It has created entirely new capabilities for people and machines and, as such, has had a profound effect on most professions, including accounting. An example of CPS in accounting is the profession’s use of drones to collect and analyze data on inventory to confirm the client’s enterprise resource planning (ERP) system records. Information from this CPS application has allowed for better real-time decisions.

Moreover, the process of gathering, analyzing, and communicating data on a large scale using various technologies to improve decision-making has become mainstream, and employers have signaled that this mindset must be developed in students at earlier stages in higher education and integrated into curriculum. Thus, graduates today must be proficient in the fundamentals of statistics to thrive in the 4IR workplace.

On the employer side, the ability to attract and retain top diverse talent in the workplace is important for success in the 4IR. To date, minorities (Hispanics, Blacks, and Asians) have not been able to enter and advance at professional accounting firms in meaningful numbers, even though accounting is a popular major among them. As the demographics of the United States shift to a minority majority by 2045, it is imperative that these individuals have access to a solid foundation in statistics for good career opportunities—a must for equity in higher education in the 4IR.

Since traditional higher education institutions have not solved the issue of universal quality education, new frameworks must be developed to tackle this issue. A multi-stakeholder approach—a collaboration among employers, government, and other stakeholders—to create and support new types of educational organizations will allow for universality in quality education and, thus, excellent career opportunities for minority groups in the accounting profession.

Inspiring Accounting Talent for a Sustainable Society (iat4ss), a nonprofit educational organization, was created to assist minorities enter the profession by providing relevant curriculum at an early stage in higher education. For example, students can enroll in Data Analytics and Statistics in Accounting after completing the principles of accounting courses. Further, data analytics is integrated into the entire curriculum.

Our society depends on certified public accountants (CPAs), as trusted professionals, to ensure reliable information for making financial and investment decisions. The traditional route for becoming a CPA has generally been to earn an undergraduate and/or master’s degree in accounting, pass the CPA examination, and gain work experience. To date, the CPA examination has primarily focused on accounting and regulatory topics: financial, managerial, and governmental accounting; auditing; tax; and business environment and regulations. The ability to use office and productivity software such as Excel, electronic workpapers, tax software, and email was all that was required of professional accounting staff in the past. IT professionals were added to the audit, tax, and consulting teams as support to automate routine work and electronically access and analyze client records.

Thus, the traditional CPA model essentially did not require technology heavy or data savvy professionals. Now, with the increase in nature, volume, and velocity of data and rapid changes in technology related to the way data is collected, analyzed, communicated, and used, professional services firms have reassessed their talent acquisition needs and are hiring non-accounting majors. Specifically, they are hiring more graduates who are competent in data analytics by using current and exponentially developing technologies such as artificial intelligence, machine learning, and blockchain.

This shift in hiring has caused the certifying bodies in the accounting profession to initiate the CPA Evolution project. Specifically, the National Association of State Boards of Accountancy (NASBA) and American Institute of Certified Public Accountants (AICPA) are working together to transform the CPA model. The new model will include technology as a core body of knowledge that candidates must be proficient in, similar to auditing, financial accounting, and tax.

However, technology skills of the workforce alone are insufficient for professional services firms (and other organizations) to achieve success in the new environment. They need a workforce that (1) is learned in quantitative reasoning with data, commonly known as data analytics; (2) can apply knowledge in a collaborative, diverse, and multidisciplinary environment; and (3) adheres to ethical standards. To solve problems in our data-driven world, data analytics is now first and foremost on the minds of employers. This ability—in conjunction with a robust and dynamic skillset in technologies to analyze issues, arrive at possible solutions, and communicate to a diverse group of stakeholders—is essential for individuals to thrive in the workplace in the 4IR. Since artificial intelligence provides us with content on an immediate basis, graduates will be hired not for content knowledge, but for how they can apply knowledge resourcefully and work collaboratively within diverse teams to solve real problems in the world.

There is an immediate need for a multi-stakeholder collaboration to develop and deliver an application-based multidisciplinary curriculum to a diverse and competent talent pool. This application-based, multidisciplinary approach of learning is being used at a few colleges and universities, but it needs to become pervasive in higher education and available to underserved students.

Harvard University already has made quantitative reasoning a part of general education requirement for their Arts and Sciences students. An example of such a course is Raj Chetty’s Using Big Data to Solve Economic and Social Problems.

However, the challenge at many colleges and universities is that professors who are “old school” are reluctant to change to the new pedagogy of learning. In addition, the demographics of some colleges and universities in the United States do not provide students with the opportunity to collaborate with a diverse group of individuals, so students must find alternate ways of gaining learning experiences that will make them attractive to employers during 4IR.

Preparing a competent workforce for 4IR would also require developing a student mindset with a strong conviction to adhere to ethical standards. Technology has unfortunately been used for wrong reasons. Currently, the major tech companies are dealing with an ethical issue regarding the operations of their respective businesses. Congress and other global legal and regulatory bodies have questioned how these companies collect and use customer and sales data. Ethics is already an important consideration in the CPA profession because of the high level of public trust necessary in financial reporting. As such, ethical standards will continue to evolve to address 4IR issues in this field.

The students and doers of statistics have much to offer professional services firms in the accounting profession, and now there is a path for these individuals to become CPAs with the CPA Evolution project via iat4ss. On the other side, these firms offer individuals excellent career choices with opportunities to grow during a lifetime. The complementing of a statistical mindset with lifelong learning in the CPA profession is a match made for 4IR.

To share your thoughts, or for more information about iat4ss and its program, contact Linda Espahbodi.