Accountancy at a Crossroads
George Themistocleous, Managing Partner and CEO of RSM Cyprus, in a comprehensive interview in Gold magazine featuring on the Accountancy Cover Story, reveals how the accounting sector is overcoming contemporary challenges and explains why new hires require a wider skillset than ever before.
What are the major megatrends (globally and locally) affecting the professional services sector and Accounting Firms in particular?
Significant challenges have been experienced by the accounting sector over the past few years, driving us to completely alter the way we conduct business today compared to how we did up until a decade ago.
The demand for innovation and technical advancement, in my opinion, is the main megatrend. Using Artificial Intelligence provides us already a new, better way to do business. This can be easily regarded as a "virtual" member of our team and can undertake the responsibility to give reliable and quick answers to multiple and complex questions.
Additionally, technological developments can provide solutions to serve not only the accountants, but also our clients. Several new solutions, like bespoke apps, come into play frequently, providing solutions which fulfil their expectations and creating an ongoing communication and flow of information to them.
A second megatrend which has risen massively during Covid-19 times, is the need for remote working in our business. Employees are seeking this option and firms can utilise this as an additional incentive to attract new employees. The shift from office work to working from home, was a drastic change during lockdowns, however, it has gone a lot better than expected.
People might work longer hours, but they declare higher happiness and productivity levels. This is a very important element for both employees and their employer. Once again, this was possible due to the new technology which empowers this option. It was not a coincidence that remote working was retained by the vast majority of employers following the lifting of lockdowns.
As CEO of one of the major accounting firms in Cyprus, what are your biggest challenges at present? What is your overall vision for the firm?
In my view, the three major challenges we face today are the preservation of Cyprus as a solid and reliable economic and business hub, the reliance of the business environment on certain markets and the lack of interest from professional candidates to join Audit Firms.
To begin with, Cyprus economy is largely dependent on the professional services industry. Organisations including, audit firms, law firms and financial institutions, need to adhere to a number of regulations aiming to prevent and combat the money laundering and financing of terrorism. During the last decade, we have observed a number of relevant developments being introduced in the Cyprus Law, and the organisations previously mentioned are regularly monitored by their professional bodies. Despite the adherence of the Cyprus Law with the latest EU Directives, the target is to relentlessly work towards the right direction to remove any black stains from the past.
Secondly, as a matter of fact, Cyprus is regarded as an ideal destination for foreign individuals to visit, as well as to live and work. Following the recently introduced Action Plan for attracting businesses in Cyprus and all the benefits this plan entails, it was noticed that people from new markets expressed severe interest in utilising the mechanisms offered by the Action Plan, so they can live and work from Cyprus. Following the war in Ukraine earlier this year, it was evident that we need to explore new opportunities and take the necessary steps and be independent from any certain markets to do business. This will allow us to split any risks that may arise and continue our work uninterruptedly.
Finally, a growing challenge in our industry is a lack of human resources. Although a large number of young people choose to pursue studies and training in the general field of the accounting profession, for various reasons, they do not wish to continue their employment in our field, creating a gap not only in numbers, but also in people with special qualities.
Taking seriously under consideration the above challenges, at RSM we have created our own vision.
As members of the world's 6th largest accounting network, it couldn't be anything else than our continuous growth. A development that will be multifaceted while also ensuring the high quality of the services we provide. Our market recognition as one of the offices that provides services of the highest quality has greatly contributed to our recent growth.
What service/revenue lines do you expect to be on the rise in the coming years in your firm? (e.g. new service lines, advisory business, specialised services, etc.)
Financial Advisory, as well as specialised Tax Advisory services, seem to be on the verge of being the most significant services to be provided by Accounting firms in general.
The globalisation and the desire of organisations to expand overseas, leave them with no other choice than to have the right advisor. During mergers, for example, a professional financial due diligence report by independent consultants is considered as one of the most important steps towards that challenge.
As previously mentioned, technology plays an important role in the modern business environment, therefore entrepreneurs need something more than a typical IT consultant.
The right advisor can reliably assist them in designing together the next steps based on their actual needs and circumstances.
What has the impact of digitalisation/digital transformation been on the profession?
Digital transformation has already played a key role in the way we do business in our profession. We do not consider technology as a support function in our business today, but merely as a key tool which simplifies processes, gives high value-added results, provides valuable information for both clients and management, while the time and paperwork are significantly reduced. The importance of the human capital remains vital, though, but they need to be adapted and get the proper training and education.
Taking under consideration the necessary changes firms will need to take, firms must plan for a significant investment on both innovation, as well as on the training of their employees.
What kind of skill sets and academic backgrounds will you need from your new hires in the coming years? How do they differ from those required a decade ago?
Considering the challenges we currently face in our profession, as well as the challenges to be addressed in the coming years, ideally, new hires must have a combination of technical and non-technical skills.
The relevant background education in our industry remains a key composite for an ideal candidate, of course, however, new hires must also be able to think "out of the box" and adjust to new technological trends related to our profession.
IT skills have already been considered part of the core skills of new candidates, while the importance of automation in processes in the accounting sector is not questionable.
New skills, such as data analysis, would also be required in the very short term, as organisations in our industry are increasingly using data coming from different sources.
So, to be efficient and utilise data in a proper way, data analytics would also be a skill that would be immensely appreciated.
What is the future of the Accounting, Audit, and Tax Advisory sector of Cyprus, in relation to international clients? How attractive is Cyprus' offering on the global market? What should the country's new vision be in relation to services provided to international clients?
Cyprus must adapt its legislation and philosophy to continue figuring amongst the most attractive destinations for international clients. The government announced that it soon will proceed with tax reforms in line with the latest international tax developments, while on the same time it will also provide compensatory tax reliefs, so that businesses will not be further suffering additional tax burdens. In addition, Cyprus is currently sitting amongst the 10 most innovative economies within EU.
This can be regarded as a competitive advantage over other similar economies, as well as traditional competitors in the region. It is my firm belief that despite Cyprus is already advertised as a technological hub, there is a lot of work that still needs to be done. In my opinion, there is still much work to be done in modernising and digitalising the governmental infrastructure, as this will enable citizens, both native and Internationals, to be effectively served.
As previously mentioned, the modernisation and digitalisation of the governmental infrastructure will be of immense importance to International Clients, as the business environment nowadays, is largely dependent on technology, and as technology offers opportunities, International clients can themselves proceed with closing certain typical arrangements and save costs. The new vision in relation to services provided to International clients needs to be based on effectively assisting them in doing their business easily and with the least bureaucratic burdens.