By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor
The success of an economy often relies on the hard work of many unnamed and unrecognized people. At the core of any thriving economy lies the diligent work of government workers, bankers, economists, entrepreneurs, logistics professionals, educators, engineers, and accountants.
Accounting, in particular, is an irreplaceable element in the equation for a modern, thriving society as they play a role in everything from managing personal finances of individual entrepreneurs and business owners to running multinational corporations. Their expertise ensures that financial information is not only accurate but also transparent, and that transparency is necessary in creating an environment ripe for business growth and economic stability.
According to the International Federation of Accountants (IFAC), accountants support businesses in securing investment and accessing credit, which in turn propels economic expansion. An IFAC study, titled Nexus 2: The Accountancy Profession — A Global Value Add, showed that accountancy is strongly linked to prosperity and improved living standards, highlighting the scale of the profession’s importance to the global economy, particularly in developing economies where accountants have a significant role to play in strengthening the institutions and architecture that will improve people’s lives.
“The accountancy profession plays a pivotal role in our financial ecosystem. Without reliable financial reporting, we cannot build the trust that investors and stockholders need to make investment decisions, thus impacting the Philippines’ competitiveness in the global capital market,” Sharon G. Dayoan, chairman and chief executive officer of KPMG in the Philippines (R.G. Manabat & Co.), said in an interview.
Ms. Dayoan explained that as external auditors, accountants provide assurance on the fair presentation of a company’s financial statements, needed to attract foreign investment and foster business confidence. Moreover, accountants also work with various stakeholders for tax compliance, business transformation, sustainability reporting and digital adoption and transformation, which help shape policies that promote economic growth.
Notably, accountants assist businesses in setting up in the Philippines, providing transfer pricing advisory services, as well as expertise in cybersecurity, robotic process automation, and intelligent automation, helping catalyze business growth and help with economic development.
“Accountants significantly impact small and medium-sized enterprises (SMEs) by acting as trusted advisors and providing essential financial management and planning services to drive their businesses forward. We help businesses navigate complex regulatory environments, make informed investment decisions based on financial analysis, and maintain competitiveness in a rapidly evolving market,” she said.
This has only become more essential today as the world pushes for more sustainable development across all nations and industries. The World Bank highlighted the importance of public sector accounting in managing state assets and curbing illicit financial flows, which pose a substantial threat to global economic health. This level of transparency ensures that governments can be held accountable by their citizens, fostering trust and efficient governance.
In 2016, Samia Msadek, former director of Governance Global Practice at the World Bank, said in an interview that in the public sphere, the accounting profession supports a public sector that is more transparent and accountable to its citizens.
“Effective financial reporting is critical to governments’ understanding of their fiscal position and prospects. It is also crucial for providing legislators, markets, and citizens with the information they need to make efficient policy decisions, and to hold governments accountable for their performance,” she said.
“The profession can contribute significantly to the achievement of the Sustainable Development Goals (SDGs) that aim to end poverty, protect the planet and ensure prosperity for all. The ability of countries and corporations to measure progress, monitor impact and report on achievements in these areas will be critical. This is where, in my opinion, accountants have a key, but easily overlooked, role to play.”
Accountants, through their expertise and proficiency in the tools to measure and report on various financial data, can help many organizations progress toward sustainability goals, pushing businesses and governments to track their social, environmental, and economic impacts.
Ms. Dayoan agreed, saying that the transparency that accountants provide public institutions attracts local and foreign investments, and is vital for assessing the effectiveness of government programs.
“Additionally, the expertise of accountants in financial analysis helps shape policies that promote economic growth, sustainability and social equity, contributing to overall economic development in the Philippines,” she said.
Accounting in a changing world
Naturally, as a profession concerned mostly with numbers and metrics, accounting is seeing rapid evolution due to technology. Advances in data analytics, artificial intelligence, and other technologies are revolutionizing accounting practices, making them more efficient and insightful, while also enabling accountants to offer deeper, more insightful strategic advice.
For instance, Ms. Dayoan said that in the Philippines today, accountants are expected not only to report on numbers but also to provide insights, identify trends, flag risks, and contribute strategically.
The expectations of stakeholders, from investors, clients, regulators, to the general public, are also changing. More are demanding greater transparency, enhanced ethical standards, and a more proactive advisory role from accountants.
“The role of accountants has expanded from record-keeping and providing assurance on financial statements to being strategic advisors proficient in areas like data and analytics, sustainability reporting, and risk management,” she said, adding that while technologies like AI and blockchain are enhancing efficiency and accuracy, they also pose risks.
“As an example, AI automates routine tasks and improves data analysis, while blockchain offers secure, transparent record-keeping. This shift allows accountants to focus more on strategic and advisory roles, increasing their value to clients. However, these technologies also pose risks, such as data security concerns and implementation challenges. Accountants must balance leveraging technology with maintaining critical judgment, ensuring they stay relevant and drive innovation in the evolving business landscape.”
Mitigating security risks and taking a proactive stance against any emerging issues will be the key to using these technologies to their fullest. After all, at the heart of accountancy is the unwavering commitment to transparency and integrity.
“The accountancy profession can better serve the needs of the Philippine economy and society by continuing to uphold the highest standards and by embracing the role as catalysts for transparency, sustainability and innovation,” Ms. Dayoan said.
With the integration of Environmental, Social, and Governance (ESG) principles into business practices, she highlighted the crucial role that accountants play in creating a sustainable future by measuring and reporting on ESG performance, providing data to inform sustainable decision-making, ensuring compliance with sustainability standards, managing sustainability-related risks, identifying cost-saving opportunities through sustainable practices, and engaging with stakeholders to communicate an organization’s commitment to sustainability.
“Now, more than ever, continuous learning and the rapid adoption of new technologies are essential. Accountants must proactively upskill and adopt innovative methodologies to effectively meet evolving demands. Additionally, maintaining strong connections and fostering collaboration with fellow professionals, organizations, and stakeholders is vital. By actively sharing knowledge, resources and best practices, we can collectively address challenges and drive positive change.”
