Ed Chan, co-founder and chairman of mid-tier firm Chan & Naylor, has claimed that tax compliance services have continued to grow in prominence over the past 35 years, despite ongoing claims that the accounting industry is engulfed in a “compliance death spiral” due largely in part to the rapid rise of technology.
“Over the last 35 years the tax compliance pie has grown, and continues to grow, contrary to all the scaremongering by those outside our industry that have never actually run an accounting practice,” said Mr Chan.
“Tax reform is on the government’s agenda, and that fuels the tax compliance pie. There is no need to change the model when you are on fertile ground,” he added.
According to Mr Chan, the presence of cloud accounting software has allowed accountants to reclaim work from their bookkeeping counterparts that was previously unprofitable.
“Cloud accounting software has enabled us to compete, and it is now profitable to take back the bookkeeping from the bookkeepers, as the clients prefer the whole process of bookkeeping, accounting and tax compliance under the one roof.
“Instead of reducing our compliance work, it has increased the opportunities.”
Mr Chan noted that Australian accountants will continue to thrive, thanks to the complex nature of Australia’s tax legislation.
“Australia is one of the few countries who has a record number of accountants per head of population and that is due to the complexity of our tax laws.”
He added: “Both the Labor and Liberal parties are now talking about changes to superannuation and negative gearing, as well as a whole host of other changes that will keep accountants busy forever. Between the constant tax changes, the ageing population, and Australia’s growing population, tax compliance is a growing pie.”
Mr Chan's comments contrast with those put forward by research house Bstar, which has claimed that accountants should look to move away from traditional compliance service offerings and explore predictive analytics and specialist advisory services.