By Stuart Ridley

On 13 March 2019, the University of Sydney’s Professor Wai Fong Chua AM FCA was inducted into the Australian Accounting Hall of Fame. Chua is known internationally for her research on management accounting as a social and organisational practice, and was one of the first academics to investigate how emotional attachments and interests influence the use and flow of accounting information within organisations.

The Australian Accounting Hall of Fame Award, administered by the University of Melbourne, honours and celebrates distinguished accounting practitioners and academics. Inductees are nominated by their peers and selected by a committee drawn from individuals in industry, government and academia from around Australia.

Chua was inducted alongside Professor Roger Simnett AO FCPA, current chair and CEO of the Australian Auditing and Assurance Standards Board and accounting professor at UNSW Business School, and Professor Graham Peirson CPA (deceased), the former deputy chair of the Australian Accounting Standards Board and accounting professor at Monash University.

“Accountants will have to be much more aware of data as assets, much more used to visualisation software and knowledgeable about data analytics.”

Technology is fundamentally changing accounting, and with the accounting profession currently undergoing such disruption, Acuity asked Chua to identify three trends that are shaping the future of the field.

1. Accountants and data analytics skills 

While business analytics and accounting will continue to be separate disciplines, Chua reports growing numbers of students are interested in combining analytical technology units with their study in accounting to give them a career advantage.

“We’re teaching more audit analytics than we were 10 years ago,” she says. “In 2020, we’re also introducing more topics on data visualisation and data analytics within the accounting school.”

Her own field research in recent years has looked at the automation of many of the more transactional and simplistic elements of accounting work in organisations, as well as the benefits of harnessing big data to improve decision-making.

“Despite the growth in big data analytics, it is important to emphasise the need for the application of judgement and interpretive skills,” she says. “What do these numbers mean; what are their implications?

“Accountants will have to be much more aware of data as assets, much more used to visualisation software and knowledgeable about data analytics.”

2. Climate risk in financial disclosures

Australian Securities and Investments Commission (ASIC) commissioner John Price pulled no punches in June 2018 when he warned company directors they could be personally liable if they didn’t address climate risks in their organisations.

Price called for an Australian financial sustainability taskforce to augment international initiatives such as the Task Force on Climate-related Financial Disclosures (TCFD).

“We currently don’t have a standard for how we might even begin to measure, much less disclose, climate risk in a systematic, standardised way,” says Chua, who is researching the impact of the TCFD on Australian companies, with support from CIMA (Chartered Institute of Management Accountants).

“Super funds, for example, have to make deliberate choices about where they put members’ funds, so they need a position on coal and carbon, and how they can reduce the risk in industries with very high levels of carbon assets.”

“One reason we might not have a framework is because climate change affects some industries more than others,” she adds. “In banking, insurance, mining and infrastructure you will find organisations starting to think about how they might calculate possible impacts of climate change upon the business.”

3. How emotions affect accounting

Accounting was traditionally seen as a rational thinking practice, focused on collecting, analysing and reporting on an organisation’s numbers to help make decisions.

But Chua’s research shows judgement and decision-making are rarely isolated from emotional influence.

“As accountants we know much of this through practice,” she says. “The study of accounting is a cognitive exercise but there are also affective dimensions to how we interpret numbers and how we relay information – there is an emotional element.”

“Some organisations foster quite problematic emotional cultures,” she warns. “If you have a culture of fear and distrust in an organisation it doesn’t help anyone.”