By MIA Digital Economy, Reporting and Risk (DERR) Team
The first Technology Adoption by the Accountancy Profession Survey (Survey) was conducted in 2017 which has served as input to the MIA Digital Technology Blueprint (Blueprint) that was issued in 2018. The second Survey was carried out in 2019 and its findings have been incorporated into the Blueprint’s 3-year operational plan which has 39 initiatives with more than 200 activities or outputs.
It is now timely for another survey to be conducted to ascertain the progress since 2019. As digital adoption has been accelerated by the pandemic, the findings of the third Survey will provide insights on the impact of the pandemic on digital adoption of the accounting profession. It will also help MIA in identifying further initiatives to move the profession forward.
The third Survey was conducted from 12 January to 25 February 2022. A total of 887 MIA members responded to the Survey and their profiles are indicated below in terms of sector, position and age.
Technologies impacting the profession
Respondents ranked the following technologies as those with higher impact on the profession. There was also an increase in the number of respondents who cited these technologies are affecting the profession: online services, mobile, cybersecurity, automation and big data and data analytics.
Overall, respondents indicated that the top three reasons for adopting technology are to: (a) improve efficiency and facilitate workplace mobility; (b) accelerate digital transformation and (c) increase competitiveness.
There was a change in the perception of barriers to technology adoption. Lack of talent to utilise technology effectively is ranked as the top barrier compared to 2019 and 2017. This is followed by lack of understanding on benefits of technology adoption and lack of funding.
Interestingly, respondents are now more exposed to fintech, as indicated by the number of respondents who have never or rarely used fintech and cloud applications having improved from 21% and 61% respectively in 2019 to 76% and 75% in 2022. The greater take-up of fintech and cloud applications to a certain extent may be due to the pandemic, as evidenced in the survey findings.
Accelerated digitalisation by the pandemic
When asked how accountants across all sectors (PAIB, public practice and public sector) responded to the pandemic, they ranked “increase in remote working and/or collaboration” and “increasing use of advanced technologies in operations” as the top two responses.
This is consistent with the findings where more than 80% of respondents indicated that the pandemic has accelerated their technology adoption.
Overall, the top five technologies being adopted due to the pandemic are video conferencing and group collaboration tools, Microsoft applications, cloud applications, accounting software and data analytics. The public practice sector shows that they have been using more audit software following the pandemic as audit software was ranked fifth by the public practice.
Digital transformation progress of the accounting profession
Regarding the status of technology adoption, 97% of respondents indicated that they are at various stages of adoption and only 3% has not started any adoption.
Developing a strategy for technology adoption is crucial so that it is aligned with the long-term strategy of the organisation as well as ensuring that the adoption is carried out with necessary care and planning. 45% of respondents have a documented technology adoption strategy while the remaining do not, although they are currently adopting technology. Only just over a third of public practice respondents have a documented technology adoption strategy.
In terms of technology investment, more than 50% of respondents allocated more than 10% of their annual budget allocation¹ on technology spending. Such technology investments have been funded internally as well as through loans and grants.
Finally, when it comes to the organisation’s current strategic posture towards technology, 24% of respondents indicated that they will invest more in technology to make it a competitive advantage while 23% view that it is critical for their survival and sustainability.
The Way Forward
The findings of the survey have provided great insight on the status of technology adoption by the accountancy profession in Malaysia, how it is funded as well as the impact of COVID-19 on technology adoption. Based on the findings as well as detailed analysis that the Institute will be carrying out on the survey data, a plan on how to move the profession forward on digitalisation will be developed to ensure that the accountancy profession is future relevant.
¹ Annual budget allocation comprises capital expenditure (CAPEX) and operating expenditure (OPEX).