Accountants Daily speaks to the three major accounting bodies to gather their predictions for the profession over the next 12 months.
Demand for services
2020 proved to be a momentous year for the profession, with practitioners taking on the role as frontline operators in ensuring the delivery of key government support measures to their business clients.
Despite the impending expiry of JobKeeper in March, the heavy reliance on accountants and bookkeepers is set to stretch into the new year as businesses continue to grapple with uncertain economic conditions.
“Demand for accounting services is unlikely to ease for the foreseeable future. Clients and lawmakers will continue to rely heavily on the accounting profession for help to manage the impacts of COVID-19,” said Dr Jane Rennie, CPA Australia general manager of external affairs.
“Rapid legislative and regulatory change in uncertain circumstances, which was a hallmark of 2020, is likely to continue. Policy proposals and reforms will continue to be rolled out rapidly, giving the profession less time to consider the impacts and respond.”
For the Institute of Public Accountants general manager of technical policy, Tony Greco, he believes the value of practitioners will increase as government support measures are wound up.
“Accountants will be busy helping clients transition from the economic financial impact caused by COVID to a post-COVID normal. Accountants have been busy helping clients adapt their business models to maintain viability and there will be many discussions around debt restructuring and cash flow forecasting,” Mr Greco said.
“[There are] huge opportunities to help small businesses transform and go from surviving to thriving. Accountants will be at the forefront of assessing viability and then either helping businesses to exit efficiently or transform into effective and productive businesses.
“After all the additional compliance work that was added to the profession’s workload in 2020, it will be back to basics catching up with lodgement deadlines and ensuring that all these COVID-related incentives have been properly accounted for tax purposes.
“Some of this year’s federal budget initiatives such as the full expensing of capital assets have unintended consequences that practitioners may not be aware of and will need to be factored into tax planning for 2021.”
Chartered Accountants Australia and New Zealand tax leader Michael Croker believes accountants will be kept busy by helping their clients navigate potential snap lockdowns and further assistance measures, as well as continuing to be able to access credit when needed.
“It’s an interesting time for financiers who want to make good lending decisions rather than get stuck with a worryingly large debt book,” Mr Croker said.
“There’s a lot of work there for accountants in mounting a business case for the continued viability of a business, and providing restructuring advice which helps lenders be more comfortable that action is being taken to get the business going.”
Increased digital push
With COVID-19 accelerating the digital transformation journey, and the government now leading the charge on modernising business communications, accountants should brace for continued change over 2021.
“Government service design and delivery will be increasingly data-driven, as we saw with the rollout of JobKeeper,” Dr Rennie said.
“Clients who don’t have sufficient digital presence may find it difficult to access government supports. Practitioners will need to be on the lookout for clients at risk of being digitally disenfranchised.”
One particular change on the horizon — the second phase of Single Touch Payroll — has already seen pushback from the profession.
“You get the feeling that Canberra’s really keen to get the red tape issue addressed partly by improving the online world and the Tax Office has been an exemplar there,” Mr Croker said.
“We just think there is a bit of a fatigue issue out there especially for small practices.”
The regulatory landscape is set for an upheaval over the coming year following the release of the review of the Tax Practitioners Board.
Consultation on the potential changes will take place over the following months, but practitioners can expect greater sanction powers from the TPB, a move towards an annual registration cycle and new education standards.
The government’s announcement to wind up the Financial Adviser Standards and Ethics Authority (FASEA) has also tipped to create more confusion with the advice space.
“More accountants and financial advisers may seek to continue the trend to exit the space unless we can achieve meaningful reform,” Mr Greco said.
“However, consumer demand will continue to grow, providing opportunities for those willing to make the commitment.”
CPA Australia’s Dr Rennie believes 2021 will prove to be crunch time for advisers.
“Among an avalanche of changes to hit the sector, advisers have until 31 December to complete their FASEA exam, a single disciplinary body will be legislated, FASEA is being wound up, a compensation scheme of last resort is touted, and they may face increased fees under the ASIC funding model,” she said.
“It will come as no great surprise if the exodus of planners from the sector continues.”
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.