The 21st Century Profession - The changing nature of professions - Chartered Accountants
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The 21st Century
Profession
The changing nature
of professions
charteredaccountantsanz.com
THE 21ST CENTURY PROFESSION
Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand (CA ANZ) represents more than 125,000 financial
professionals, supporting them to build value and make a difference to the businesses, organisations and
communities in which they work and live. Around the world, Chartered Accountants are known for their
integrity, financial skills, adaptability and the rigour of their professional education and training. CA ANZ
promotes the Chartered Accountant (CA) designation and high ethical standards, delivers world-class services
and life-long education to members and advocates for the public good. We protect the reputation of the
designation by ensuring members continue to comply with a code of ethics, backed by a robust discipline process.
We also monitor Chartered Accountants who offer services directly to the public. Our flagship CA Program, the
pathway to becoming a Chartered Accountant, combines rigorous education with practical experience.
Ongoing professional development helps members shape business decisions and remain relevant in a changing
world. We actively engage with governments, regulators and standard-setters on behalf of members and the
profession to advocate in the public interest.
Our thought leadership promotes prosperity in Australia and New Zealand. Our support of the profession
extends to affiliations with international accounting organisations. We are a member of the International
Federation of Accountants and are connected globally through Chartered Accountants Worldwide and the Global
Accounting Alliance.
Chartered Accountants Worldwide brings together members of 13 chartered accounting institutes to create a
community of more than 1.8 million Chartered Accountants and students in more than 190 countries. CA ANZ
is a founding member of the Global Accounting Alliance which is made up of 10 leading accounting bodies that
together promote quality services, share information and collaborate on important international issues. We also
have a strategic alliance with the Association of Chartered Certified Accountants. The alliance represents more
than 870,000 current and next generation accounting professionals across 179 countries and is one of the largest
accounting alliances in the world.
Copyright © June 2020. Chartered Accountants Australia and New Zealand. All rights reserved.
DISCLAIMER This document was prepared by Chartered Accountants Australia and New Zealand. The information in this document is provided
for general guidance only and on the understanding that it does not represent, and is not intended to be, advice. Whilst care has been taken its
preparation, it should not be used as a substitute for consultation with professional accounting, tax, legal or other advisors. Before making any
decision or taking any action, you should consult with an appropriate specialist or professional.
Chartered Accountants Australia and New Zealand. Formed in Australia. Members of the organisation are not liable for the debts and liabilities of
the organisation. ISBN: 978-0-6482276-6-3 1768
Chartered Accountants Australia and New Zealand 2
THE 21ST CENTURY PROFESSION
Contents
Foreword..............................................................................................................................................................4
Executive summary........................................................................................................................................5
Survey methodology...................................................................................................................................... 7
Introduction........................................................................................................................................................8
What is a profession?....................................................................................................................................9
What are the essential characteristics of a profession?........................................................... 12
Threats to professions..........................................................................................................................17
Impact of technology...........................................................................................................................20
Regulatory failure..................................................................................................................................22
Life Long Learning.................................................................................................................................23
Dilution of the worth of professions?...........................................................................................23
Acting in the public interest.............................................................................................................. 24
Purpose beyond profit........................................................................................................................ 24
Who is now a member of a profession?............................................................................................26
Summary..........................................................................................................................................................29
References.......................................................................................................................................................30
Chartered Accountants Australia and New Zealand 3
THE 21ST CENTURY PROFESSION
Foreword
When you join a profession, you do not sign up to ‘business as usual’.
Members of professions hold respected positions in society. Doors are opened that are closed to many.
The responsibilities that come with this esteem are numerous and great, including a commitment to
act in the public interest, a reality starkly brought home by COVID-19. Public trust and confidence in
professions, notably the medical, has underpinned national responses to the pandemic.
And as countries move from a public health focus to economic and social recovery, other professions
including accountants, are stepping up. The depth and breadth of accountants’ expertise helps reveal the big
picture and chart the best course of action. Managing risk and preparing businesses for future challenges,
they are trusted to shape the course of companies, organisations and economies around the world.
It is crucial to understand where this trust in professions comes from – which parts of their social
licence to operate sit on solid foundations, and which are at risk.
Our research as part of The 21st Century Profession clearly shows that public trust is multi-faceted.
It rests on a combination of a profession’s visible commitment to ethics and integrity, high levels of ongoing
education, accountability via professional discipline, and commitment to act in the public interest.
At their heart, professions offer a unique trinity of expertise, ethics and integrity.
However, expectations and emphasis relentlessly change, and only those professions that adapt nimbly
will remain relevant into the future.
Professions often speak of “keeping the badge shiny”. The 21st-Century Profession lays out the many
bright spots and, crucially, also the areas where professions need further work to ensure they continue
to fulfil the responsibilities the public has vested in them.
And as they adapt, they must not lose sight of their age-old responsibilities.
Ainslie van Onselen LLB MAppFin
Chief Executive Officer
Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand 4THE 21ST CENTURY PROFESSION
Executive Summary
Opportunity in a world of challenges
A theme running through our thought leadership papers is the challenge presented by deregulation, increasing competition,
innovative technologies and globalisation. Professions are not immune to these disruptions, which are pressurising what has been
described as the “the modern gold standard of occupational status”.
The 21st Century Profession looks at the current state of professions as badges of ethics and expertise. What are their strengths?
Their weaknesses? Where to next? The findings are supported by a survey of the public and of Chartered Accountants.
But first, what is a profession in 2020?
Despite ongoing change, including the addition of “newer” professions such as accounting, engineering and architecture, the
fundamental characteristics of professions remain relatively static. These include self-regulation, codes of ethics, expertise,
professional membership bodies, acting in the public interest and advanced education and training.
A body of research sees professions as under threat from economic and technological disrupters such as data analytics companies
taking over what were formerly regarded as core accounting activities. Similarly, legal-tech for the legal profession. This report,
however, points to a healthy future for professions, albeit one that is very different from the present.
An ethical foundation
Professions set themselves apart from other occupations by their commitments to ethical codes.
In the survey we conducted as part of The 21st Century Profession, all respondents ranked adhering to a code of ethics as the
most important characteristic of a profession, ahead of expertise and education. Being an expert is not enough; expertise must
be underpinned by ethics and integrity.
And asked about the benefits of engaging a member of a profession, respondents put ethical behaviour at the top of their
lists. Codes of ethics are a response to regulatory gaps – they commit members of professions to do what is ethical, not only
what is legal.
Chartered Accountants Australia and New Zealand 5THE 21ST CENTURY PROFESSION
A substantial majority of survey respondents believe professions need a purpose beyond just making a profit. People expect
professions to act in a socially responsible manner and to be culturally and environmentally aware.
Need to change
Judging by our survey, there is strong demand for professions to change, particularly from young Chartered Accountants
(95% agreed professions needed to change).
Drilling down into the changes being sought, there is a clear call for greater transparency. More than two thirds of the general
public respondents, and almost half of Chartered Accountants respondents, say professions must be more transparent. There also
indications that professions need to work on building (or re-building) trust and reputation.
Some of the responses challenge current thinking regarding the traditional views. Only around a third of general public
respondents (i.e. users of professions) believe professionals need a university degree and should sit professional exams, although
nearly two thirds expected members of professions to hold expert knowledge. This supports the call for programs to widen entry
pathways to professions.
Professions must look forward and continue to change to stay relevant and meet new demands.
In fact, and as demonstrated in the wake of the COVID-19 induced lockdowns, in a knowledge-intensive disrupted world,
members of professions have the opportunity to play increasingly important roles in business and communities, bringing to bear
their expert knowledge, advisory skills and strong ethical foundation.
Chartered Accountants Australia and New Zealand 6THE 21ST CENTURY PROFESSION
Survey Methodology
This paper draws on data from two surveys commissioned by Chartered Accountants Australia and New Zealand. In the first
survey, we interviewed 1,210 Chartered Accountants and in the second, 1,531 members of the general public. We asked them
the same questions.
Gender of respondents
Survey population
Male Female All
General public Chartered Accountants
80% 80%
70% 67% 70% 62%
General public
60% 60%
50% 50% 50%
38%
40% 33% 40%
30% 30%
20% 20%
50% 10% 10%
0% 0%
Australia New Zealand Australia New Zealand
Age of respondents
Chartered Accountants
General public Chartered Accountants
38%
18-34 35-49 50-64 65+ All 18-34 35-49 50-64 65+ All
62%
20% 24%
37% 37% 32% 32%
6% 12%
Chartered Accountants Australia and New Zealand 7THE 21ST CENTURY PROFESSION
Introduction
Historically, the body of professions comprised the law, medicine and religion.1 Professions now include
a much wider category of occupations, but where do we draw the line between who is and who is not a
member of a profession? What are the characteristics of a profession? We examine these questions in this
paper, and use the findings to inform the second part of this paper, which is: does it even matter? We then
explore the changing role of the professions in the 21st Century.
We discuss the body of professions in this paper. While this encompasses a diverse range of expertise, tasks, skills and language,
there are many similarities among the different professions and the challenges they currently face.
KEY FINDINGS
• A professional designation is a badge of expertise and ethics. It provides people with the confidence
that they are dealing with a trusted ethical expert.
• Adherence to an ethical code is considered an essential characteristic of a profession.
• As our environments become more knowledge-intensive, members of professions play an increasingly
important role in bringing their expert knowledge and advisory skills to society.
• There is a call for professions to be more transparent. Professions must get better at explaining what
they do, how they do it and the value they add.
• Professions must have a purpose beyond just making a profit in order to maintain their social licence
to operate.
• Professions must be dynamic. They must continue to look forward and evolve in order to remain
relevant in the future of work.
• Professional expertise is critical, but many question the need for it to be derived from a university
degree or professional exams.
Chartered Accountants Australia and New Zealand 8THE 21ST CENTURY PROFESSION
What is a profession?
Adherence to
Organisation Advanced The definition of a profession has expanded since the 19th Century from just medicine and law to include
Self into a education and
regulation a code of professional training
“newer” professions such as accounting, engineering and architecture. There is a distinct difference between
ethics body
a profession, which is an indicator of trust and expertise2, and a professional – a person who receives
Continuing Self discipline remuneration for their work and adopts a business-like approach to their activity – such as a professional
Acts in the
professional Expertise of its
development
public interest
members
sportsperson.3
Despite changes to the range of occupations claiming professional status, the fundamental characteristics of professions have
Status and Specialised
Client influence in Collegiality body remained relatively constant over time. Figure 1 builds on a model developed in 2005 by British academics Graham Cheetham
focused society of knowledge and Geoff Chivers.4
Figure 1: Characteristics of a Profession
One notable feature of most professions is the expectation that members act in the public interest. At the same time, they also
have a degree of regulatory autonomy in relation to determining their standards and who can enter the profession.5
Chartered Accountants Australia and New Zealand 9THE 21ST CENTURY PROFESSION
Some occupations fulfil some but not all the traditional criteria of a profession. For example, people who work in information
technology or consulting have a high level of expertise and training, but they are often not bound by an ethical code, which if
violated could result in sanctions preventing them from working in that professional role again. A lawyer struck off for poor
conduct is very unlikely to work as a lawyer again. However, a software engineer who engages in misconduct may lose their job
but is unlikely to be prohibited from working elsewhere as a software engineer.
A profession is a disciplined group of individuals who adhere to ethical From a client’s perspective, professions are about trust and confidence. A professional designation gives the client confidence that
standards. This group positions itself as possessing special knowledge they are dealing with a trusted and ethical expert.7
and skills in a widely recognised body of learning derived from research,
education and training at a high level, and is recognised by the public as The safeguards provided by engaging a member of a profession are significant. They include minimum standards of initial and
such. A profession is also prepared to apply this knowledge and exercise ongoing education and experience, the requirement to act in accordance with an ethical code, and access to recourse if that does
these skills in the interest of others.6 not occur. These safeguards help build trust.
The Australian Council of Professions
The following case study examines the consequences when an industry with an important and trusted role in society, acts in self-
interest without the traditional safeguards of a profession (discussed above) available to protect the public.
This case study highlights a gap between the expected and actual conduct of financial advisors. Many clients assumed they were
dealing with a financial advice ‘profession’ and expected that the safeguards traditionally associated with a profession would be in
place.
The financial advice industry , however, lacked most of the traditional safeguards embedded in a true profession. This provided
fertile ground for misconduct, resulting in consumer harm as revealed by the Royal Commission into Misconduct in the Banking,
Superannuation and Financial Services Industry in Australia.
Chartered Accountants Australia and New Zealand 10THE 21ST CENTURY PROFESSION
CASE STUDY
Mind the gap – the financial advice industry. When a ‘profession’ is not a profession
In December 2017, the Australian government established the Royal Commission into Misconduct in
the Banking, Superannuation and Financial Services Industry. The government set up the Commission
after a range of scandals and serious accusations against the financial services sector. These
included numerous allegations of misconduct, potential involvement in criminal activity, impropriety in
transactions and a lack of accountability for wrongdoing.
In his final report, Commissioner Hayne said: “History tells the story of an incomplete transformation
– from an industry dedicated to the sale of financial products to a profession concerned with the
provision of financial advice. I say ‘incomplete’ because I do not believe that the practice of giving
financial advice is yet a profession.”8
A hallmark of a profession is its ability to enforce industry standards and regulations. Commissioner
Hayne said this authority was almost entirely absent in the financial advice industry.
He announced changes to lift financial advisers’ professional standards. These included mandatory
registration of financial advisers, creation of a single disciplinary body with the power to impose
sanctions and an industry code of ethics. To become a professional advisers, applicants would need
a relevant degree before sitting an industry exam, complete a year of supervised work and training
and fulfil ongoing annual professional development obligations.9 These changes represent “a further
important step towards making financial advice a profession”.10 Similar changes were also introduced
in New Zealand.
Commissioner Hayne outlined a further three areas that need to be addressed “before the provision
of financial advice can truly be regarded as a profession”.11 The first two are self-evident: that advisors
cease charging fees for service and provide quality advice in an environment with zero tolerance for
conflicts of interest.
The third is introducing a disciplinary system for financial advisors. As Commissioner Hayne said: “One
hallmark of a profession is the existence of a credible and coherent system of professional discipline,
where the ultimate sanction is expulsion from the profession.” 12
Chartered Accountants Australia and New Zealand 11THE 21ST CENTURY PROFESSION
What are the Essential
Characteristics of a Profession?
In our survey, we asked respondents what they thought the essential characteristics of a profession were.
We offered them 12 options to choose from, with the ability to select as many as they felt were appropriate.
A professional code of ethics contains principles that Table 1 outlines the 12 options.
govern the behaviour of a person or group in a business
environment, guiding individuals on what is ethical, as Responses to this first question are shown in Figure 3. All groups clearly ranked adherence to a code of ethics as the most
opposed to just what is legal. important characteristic of a profession. Our general public survey respondents said this was twice as important as
self-regulation, with nearly two-thirds of respondents agreeing this was important for a profession and only one-third believing
self-regulation was important.
Chartered Accountants Australia and New Zealand 12THE 21ST CENTURY PROFESSION
Table 1: What are the essential characteristics of a profession?
Members hold a university degree
They are self-regulating (self-regulation means the government has delegated some or all its regulatory functions
to a professional regulatory body with the specialised knowledge to do the job)
They are independently/externally regulated
Admission is controlled by a professional body
They act in the public interest as opposed to acting in their own interest
There is compulsory ongoing professional development
They are bound by a code of ethics
Members must have a specified amount of relevant work experience
Members are disciplined and held accountable if they do not comply with expected standards of behaviour
They are highly trusted
Members have expert knowledge
Members must pass professional examinations prior to entry
Similarly, the Chartered Accountant respondents said adherence to a code of ethics was more than twice as important as
Objectivity Confidentiality external regulation. While rules and regulations are essential, there will always be regulatory gaps. For example, Figure 2 shows
the IESBA International Code of Ethics for Professional Accountants lists integrity, objectivity, professional competence and
due care, confidentiality and professional behaviour as fundamental principles of ethics for the accounting profession.13 These
establish the standard of behaviour required of a professional accountant and are underpinned by a conceptual framework. Every
Integrity Professional
Behavior profession is defined not only by the knowledge, skills and attitude of its members, but also by their commitment to act in an
ethical manner.
THE
Professional CONCEPTUAL
Competence FRAMEWORK Independence A principles-based code of ethics articulates the fundamental ethical principles required of members of that profession. By
and Due Care
stating the values a profession wishes to foster in its members, the profession defines their desired behaviour. As a result, written
codes of conduct or ethics become benchmarks for measuring behaviour and reference points for professional discipline.
Figure 2. The fundamental principles of ethics for
professional accountants
Disciplined and Accountable
Governing or regulated bodies of a profession hold their members accountable for breaches of law, conduct or ethics. This is an
essential characteristic of a profession. Such accountability provides assurance to users of their services, the government and
society that members of that profession will deliver high quality services. Mechanisms for accountability vary by profession. They
can include sanctions such as suspension or expulsion from the profession, penalties or cancellation of fees for services rendered.
Our survey respondents rated highly the need for members of professions to be both disciplined and accountable.
Chartered Accountants Australia and New Zealand 13THE 21ST CENTURY PROFESSION
Educated versus Expert
A number of responses challenged traditional thinking about characteristics of a profession. For example, Figure 3 shows that
CASE STUDY
only 37% of the general public survey respondents believed that members of a profession should require a university degree
A modern pathway for professional accountants
and sit professional exams, although 63% of respondents said members of a profession needed expert knowledge. This indicates
a belief that expert knowledge does not necessarily come from a university degree or professional competency exams. These
In 2018, in partnership with Chartered Accountants
responses support the suggestion that to remain relevant and continue to attract top talent, traditional professions should
Australia and New Zealand (CA ANZ), professional
consider adapting their entry pathways.
services firm PwC commenced a new Higher Apprentice
and Traineeship pilot scheme. The scheme provides
By contrast, Chartered Accountant respondents felt a university degree and professional exams were essential characteristics of a
individuals with the opportunity to pursue a career via
profession, with 62% responding that professions require a university degree and 69% considering professional exams necessary.
the completion of a Business Diploma qualification CA
It’s not surprising that people who are already members of a profession responded more positively to factors that currently
Foundations level study and relevant work experience,
comprise part of their professional membership.
as an alternative to the traditional upfront university
route. The pilot is designed to improve diversity and social
Chartered
mobility by attracting talented school leavers that PwC Public Public All
Accountants
would not normally access. Chartered Accountants
Tracy Gower, CA ANZ General Manager Professional
Accreditation and Pathways said that “so far the pilot Code of ethics
scheme is a success, with the PWC Higher Apprentice Expert knowledge
graduates performing as well both in the workplace and Disciplined and accountable
in their CA studies as degree graduate entrants. The Highly trusted
performance of these pilot students will continue to be Compulsory professional development
closely monitored by CA ANZ during this pilot phase, This
Relevant work experience
will ensure that optimum levels of workplace experience
Admission controlled by professional body
and formal study are required in any future alternative
pathways to becoming a Chartered Accountant.” Act in public interest
Externally regulated
Professional exams
University degree
Self-regulating
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Figure 3: Essential characteristics of a profession
Chartered Accountants Australia and New Zealand 14THE 21ST CENTURY PROFESSION
Gen Z and bite-sized learning
According to a recent survey by global education company Pearson14, learners’ expectations are changing,
which is shaping how they engage with higher education. No doubt these changing expectations have
WHO ARE GEN-Z? been further exacerbated by COVID-19. For many, the future of education will consist of a lifelong learning
experience delivered in smaller segments, as opposed to an upfront investment in a multi-year university
Gen-Z are the post-Millennial generation.
degree. Gen-Z and Millennials are increasingly opting to educate themselves in bite-sized chunks throughout
Born between 1997 and 201216, they currently comprise their careers. Known as micro-credentials or nanodegrees, learning can be undertaken in combination with
24.3% of the U.S. population17. Gen-Z are true digital earning. This option especially appeals to people wishing to pursue a professional career without the large
natives and your new co-workers as they enter the upfront financial investment and time out of the workforce.
workforce and sit in a desk near you.
This is supported by recent research by professional services firm Deloitte15, which found that many Gen-Z are
reconsidering the cost/benefit analysis of traditional higher education due to its growing cost. This generation
is increasingly exploring learning to enhance their existing skills via online platforms. This has no doubt been
exacerbated by COVID-19 which forced all learning institutions to adapt at short notice and pivot to an online
learning model, in most cases with great success.
In the global knowledge economy, education will remain important. However, indicators suggest that
consumption patterns are changing. This is further reinforced by the high number of survey responses
supporting the need for compulsory ongoing professional development for members of a profession.
Benefits of dealing with a member of a profession.
We were also interested in why people engaged members of a profession when they had alternatives. To answer this, we asked our
respondents about the benefits of transacting with a profession. We offered them nine options which are shown in Table 3.
Table 3: What are the benefits of dealing with a profession?
You will receive superior service
There are greater opportunities for redress if service is not delivered to an acceptable standard
There is a guarantee that expertise will be up-to-date
There is the reassurance of education and expertise supporting the service provided
They will behave ethically
It saves having to do a lot of individual research to ensure that the service provider is appropriately qualified
They have greater regulation (both self-regulation and independent)
They can be trusted more than someone who is not a professional
They act with my best interests in mind
Chartered Accountants Australia and New Zealand 15THE 21ST CENTURY PROFESSION
Results from this question are shown in Figure 4. What is clear from both Figures 3 and 4 is that people value ethical behaviour.
ESSENTIAL CHARACTERISTICS OF A PROFESSION Respondents felt strongly that for an industry to be designated as a profession, members had to adhere to a code of ethics (as
shown in Figure 3). Similarly, many respondents said the main benefit of engaging a member of a profession was that they would
Examples of survey responses that highlight respondents’ views on the
behave ethically (as shown in Figure 4).
essential characteristics of a profession.
Chartered
If the profession itself maintains a good reputation that is Public Accountants Public All
Chartered Accountants
built upon robust requirements for entry and continuing
membership, and a sound code of ethics, then trust in that
profession will follow. They will behave ethically
Education and expertise underly the service
Obviously experience and knowledge are a base but in Greater regulation
the end it is your clear ethics that give you the backbone to
Guarantee expertise is up to date
make the right decisions every time.
Greater opportunity for redress
Superior service
Trust more than a non-professional
Saves individual research
Have client’s best interest in mind
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Figure 4: Benefits of transacting with a member of a profession
This is an important message for aspiring, traditional and newer professions. Ethical behaviour sets a profession apart from a non-
profession. A strict and enforced requirement that members of a profession adhere to a code of ethics demonstrates the integrity
of members of a profession to those outside it. And as mentioned earlier, a code of ethics also serves as a benchmark against which
behaviour can be measured and a reference point for professional discipline.
A code of ethics and a robust disciplinary procedure
serves as a benchmark against which professional All respondent groups rated “education and expertise supporting the service provided” as the second most important factor.
behaviour can be measured, and an essential reference Perhaps this was second to ethics as people saw no point in engaging an expert if their advice was not founded on an ethical base.
point for professional discipline. Up to date expertise and the opportunity for redress and regulation were also rated as important by both groups (shown in
Figure 4). Again, it is apparent that a profession is viewed as a hallmark for quality, expertise, ethics and integrity.
Respondents, however, did not rate other factors highly. Less than a third of respondents from the general public thought that
members of a profession had the client’s best interest in mind. Less than half of the Chartered Accountant respondents thought
the same.
Chartered Accountants Australia and New Zealand 16THE 21ST CENTURY PROFESSION
This is not surprising, given the often highly publicised reports of self-interested behaviour by professions and their members.
The global audit profession has recently come under the spotlight for the provision of non-audit services to audit clients – the
implication that by doing so gives rise to a conflicts of interest. A prominent law firm in New Zealand sought to conceal and
minimise serious and systemic sexual harassment by a senior staff member. An engineer was amongst the ringleaders prosecuted
in 2019 for the VW emissions scandal in Germany. In 2015, an Australian surgeon continued to implant a medical device in his
patients despite knowing that it was faulty. The surgeon had a financial interest in the medical device. These examples of highly
publicised acts of self-interest by members of a profession are enough to taint public perception that the entire profession is
THE PUBLIC INTEREST self-interested.
Individual professions are subject to different
sets of ethical norms, but most if not all, have a Professions take note
requirement to put the clients’ best interests above Members of professions and professional bodies alike must take note. When dealing with a member of a profession, society
their own. Doctors are required to consider the places great value on expertise and education, but even greater value on ethical behaviour. The perception that they act in
health and wellbeing of the patient as their priority18, self-interest, whether grounded in reality or not, is a threat to the greatest perceived benefit of engaging a member of a profession
accountants are required to act in the public when alternatives exist. Expertise is a given, but on its own insufficient. Expertise must be combined with ethical behaviour for
interest (not their own) and be on guard against the professions to fulfil their social contract and retain their relevance to society. Further, and as highlighted by Commissioner Hayne
threat of self-interest19, the code of professional in the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,
responsibility for teachers requires them to act in discipline, transparency and accountability are key. Where permitted by law, professional bodies should consider making their
the best interests of learners.20 professional sanctions well-known to help uphold public trust and confidence in their profession.
Threats to professions
Deregulation, increasing competition, innovative technologies and globalisation are just some of the forces challenging the future
of professions.21 In their book The Future of Professions: how technology will transform the work of human experts, futurist father
and son team Daniel and Richard Susskind propose two possible futures for the professions. One is a more efficient version of
the status quo. The second is a transformation of the availability of professional expertise. The Susskinds suggest that increased
automation will eventually end the need for professions.
While many people share the Susskinds’ view, other academics challenge this perspective. A recent Australian study suggests
that significant job loss projections from automation are overstated due to flawed methods, exaggerated predictions and incorrect
interpretation of data.22 While technological change has the potential to eliminate some jobs, these same changes are likely to
generate new roles or make elements of existing roles more productive. While the widely used accounting software Xero has
disrupted the accounting profession, it is also acknowledged that the software has enabled accountants to make the shift over
time from bookkeeper to that of their client’s trusted partner and adviser.
Susskind and Susskind make the criticism that professions are failing in six ways: “economically, technologically, psychologically,
morally, qualitatively, and in terms of their inscrutability”:23
Chartered Accountants Australia and New Zealand 17THE 21ST CENTURY PROFESSION
WHY DEAL WITH A PROFESSION • Economic failings exist as most people cannot afford the services of top members of professions such as doctors and lawyers. At
the same time, in many countries members of professions struggle to provide even basic services such as education, health and
Examples of survey responses that emphasised the importance of ethics, legal assistance.
trust and integrity in a profession: • Technologically, many professions are failing because their operating models rely on “increasingly antiquated techniques for
creating and sharing knowledge”.24
• Psychological failings result from members of professions’ inability to stay informed and engage in individual problem solving.
Integrity and ethical behaviour are the keys to
• Moral failings arise due to the tension between lack of affordable access to the expertise held by professions, and the fact that
maintaining the value in any professional designation.
professions are responsible for many of the most important functions and services in society.
Once the trust in these is lost the designation becomes
• Qualitative failings exist because for many, professions underperform. Only a privileged few are able to access world class
meaningless. professional services: “the finest experts are a very scarce resource”. 25
• Professions are unacceptably inscrutable. The imbalance of knowledge and thus power between a professional and the lay
Professions are only of value if they instil a sense of trust in person often results in unnecessary levels of complexity, opacity and mystery. These lead to a lack of transparency and
the public. accountability on the part of the professions.26
A profession earns trust through its members acting with Their argument is while members of professions play important roles in society, they need to evolve in order to keep up with
integrity, demonstrating competence including being up to societal changes and new demands. To research this issue, we asked survey respondents if they thought professions needed to
date and serving its clients well. change. Overall, the sentiment for change was strong with half of the general public respondents and 57% of the Chartered
Accountant respondents agreeing that professions needed to change. Figure 5 shows, sentiment for change was strongest among
younger (under 35) members of the Chartered Accountants profession than among older members; 95% of younger respondents
felt that the profession needed to change, compared to 59% of older members. Those under 35 represent the current and
future leaders of society and the professions. Their call for change represents an opportunity for transformation that should be
embraced by all professions.
Under 35 Over 35
years old years old Public
All
Chartered Accountants
100% 95%
80%
59%
60%
47% 51%
40%
20%
0%
Chartered Accountants Public
Figure 5: Yes, professions need to change.
Chartered Accountants Australia and New Zealand 18THE 21ST CENTURY PROFESSION
We asked a follow up question to those who agreed that professions needed to change. This question was: how do you think
professions need to change? Figure 6 shows these results.
Public Chartered
Accountants Public All
Chartered Accountants
Need to be more transparent
Trust is eroded
Need to provide different services
Reputation has been damaged
No longer need professions for many tasks
0% 10% 20% 30% 40% 50% 60% 70%
Figure 6: How do you think professions need to change?
Figure 6 illustrates the Susskinds’ prediction that in the future we will neither want nor need members of professions to work in
ways they have done in the past.27 It is notable that less than a quarter of respondents from both groups thought that professions
were no longer needed for many tasks, but nearly two-thirds of Chartered Accountants believed that professions need to change
by providing different services. While this was less evident among general public respondents, this difference may result from
Professions hold a privileged position in society. People greater awareness of the need to change amongst those inside a profession to ensure their relevance to their clients and society.
trust them with intimate details of their health, with
educating and caring for their children, their finances and Also notable is the call for transparency, with over two thirds of the general public and almost half of Chartered Accountants
legal matters, designing safe roads and structures and respondents clearly stating that professions need to be more transparent. The perceived lack of transparency is a likely
with their wellbeing. contributor to the low levels of trust in professions, with half of all respondents stating that their trust in professions had been
eroded.
To maintain their social licence to operate, professions must be more transparent in how they go about their
work, what they have considered in reaching their conclusions and how they arrived at their recommendations. Professions
must do a better job of explaining what they do, and how they add value. Transparency is an essential element of any
service-oriented profession.
Chartered Accountants Australia and New Zealand 19THE 21ST CENTURY PROFESSION
SOCIAL LICENCE TO OPERATE Opportunity: A call for increased transparency
Many professions, including lawyers, accountants and engineers, publish the outcomes of their disciplinary
A social licence to operate is the ability of an industry
proceedings on their website and in their professional magazine or journal. Naming supports openness,
or organisation to conduct its business due in part
accountability and transparency.29 But is this enough? Our survey findings are compelling. People want
to the confidence society has that it will behave
professions to be more transparent. The perceived lack of transparency is impacting their trust in professions.
legitimately, with accountability and in a socially
Professions have an opportunity to regain the lost trust by shining a light on serious professional misconduct,
and environmentally responsible way.28 The term
and in the interest of transparency, naming and shaming those that break their ethical rules. The outcome of
originated at a 1997 World Bank meeting, where it
disciplinary proceedings should be published in a timely fashion and featured front and centre on the website
was described by an executive from the then mining
of the relevant professional body, not hidden in a dusty corner where they never see the light of day.
company Placer Dome as being essential to the
ongoing survival of the mining industry. The term was
Renowned British Professor of Ethics and Education David Carr describes professions as “the modern gold
originally used by extractive industries due to their
standard of occupational status”.30 Is this likely to continue into the future? Over the past decade, professions
operations having a significant impact on natural
have already adapted to significant social, economic and technological changes, but there is more to be
resources. To gain the support of the communities in
done. They have also benefited from what are essentially professional monopolies. Of greater concern, some
which they operated, these industries needed to show
professions in more recent times have been accused of self-interest and inefficiency.31
they were acting in a transparent and responsible
manner. The term is now used more broadly across
many business sectors.
Impact of technology
Technology is frequently identified as the most significant threat to professions. This paper uses the term “technology” to
incorporate the wide range of systems, algorithms, robots, etc., that increasingly perform routine, repetitive tasks that were the
historic domain of people. Research from the OECD reports that across OECD countries about 9% of jobs are automatable.32
Academic research indicates that some occupations will disappear with improved automation and digitisation, but occupations
which require members to have higher levels of educational achievement are less likely to be taken over by technology.33
Technological advancements also mean that, at least in some cases, the knowledge and experience once held solely by professions
are no longer exclusively their domain; for example, accounting software such as Xero and MYOB have enabled many small
businesses to prepare their own basic financial statements without the help of an accountant. While information, including
specialist knowledge, is now widely available on the internet, access to more information does not necessarily result in increased
ability to apply that knowledge.
Chartered Accountants Australia and New Zealand 20THE 21ST CENTURY PROFESSION
PROFESSIONS – A CALL FOR TRANSFORMATION As our environments become more knowledge-intensive, members of professions play an increasingly important role in
Quotes from survey respondents showing a call for professions bringing their expert knowledge and advisory skills to society.34 Building on the earlier example of accounting software
to transform: facilitating the production of small businesses financial statements. While accountants may not be required to prepare the
financial statements, their financial and industry expertise can help business owners to understand what the trends and numbers
The professions are at a crossroad. Technology and mean. In our data-rich world, professions play a vital role in interpreting information and determining what is relevant for their
changing stakeholder expectations are combining with organisations and their clients.
an often-deserved loss of trust to challenge the reason that
professions exist. This is the issues that all professions need It is evident that professions will continue to embrace innovative technologies as they generate efficiencies that will allow
to be dealing with. provision of a superior service. To date, this has mostly represented repetitive tasks, rather than high-skill activity. However, it
is only a matter of time until at least some more sophisticated tasks will be undertaken by technology. Artificial intelligence,
for example, has been touted as having great potential to help doctors diagnose patients more quickly and accurately in the
The professions need to evolve as the needs of members and healthcare sector. In the UK, in late 2019 the government pledged £250,00035 to fund a new AI intelligence laboratory to
the community they service change. This may mean that improve diagnostics and cancer screening. In the US, testing has been carried on machine learning designed to draw together
different capabilities are required and the prioritisation of all the relevant medical literature to assist a doctor diagnose breast cancer.36 If a person were to collate this information, they
those capabilities changes through time. would need to read 160 hours per week to keep up with the latest medical developments.37 Thus the development of artificial
intelligence systems is challenging some of the high-skilled professional tasks historically considered safe from technology.38
Professions should rest less on their (past) laurels. Notwithstanding this challenge, we suggest there will always be a role for humans. A case widely reported in the media in March
The fee-paying public are relentlessly evolving and 2019 showed how a video robot was used to inform a patient of his terminal diagnosis.39 The family was reported as saying that
demanding. “normal news” was acceptable to hear via technology, but serious news “should be done by a human being and not a machine”.40
Opportunity
As technology increases in sophistication, will this result in the “dismantling of the traditional professions”?41
This outcome is possible but by no means inevitable. Instead of signalling the demise of the professions,
technology is providing opportunities for change. Professions can use technology to improve service delivery
and expand potential value. We have already seen innovative examples of this in professional firms, such as
the deployment of advanced analytical technology for forensic accounting to detect unusual patterns and
transactions in an accounting system. Prior to the introduction of this technology, an individual would be
required to manually comb through individual transactions. Within professions a wide range of roles that exist
today did not exist two decades ago. Examples in the accounting field include, forensic accounting, data mining
or predictive analytics.
Chartered Accountants Australia and New Zealand 21THE 21ST CENTURY PROFESSION
Regulatory failure
Professor Crawford Spence of King’s College at the University of London argues that we have moved away from trusting
CASE STUDY members of professions and instead hold them to account using measurable criteria.44 At the same time, professions still
Forensic Accounting benefit from considerable autonomy, and freedom from oversight. Where there is oversight, it tends to be by peers in the same
profession.45 Is this familiarity a threat?
Forensic accounting is among a number of fast-
growing roles for accountants42. As online financial In recent years, some professions have failed to identify problems within their own discipline and as a result damaging and even
fraud and white-collar crime come increasingly fatal incidents have occurred, such as engineers failing to identify structural issues until buildings collapse46 or audit firms failing
under the spotlight, forensic accountants are now to identify irregularities with financial statements until corporations collapse.47 The fallout from such incidents is widespread
in great demand. Forensic accounting exemplifies and detrimental to the profession as a whole as well as the professional body.
a role that is interdisciplinary, combining the use of
advanced analytical technologies with financial skills, Professions are usually tasked with regulation of their members: controlling membership, establishing competency standards,
legal interpretation, data analytics and elements of rules of conduct and enforcing consequences when these are breached. Implication of members of professional bodies in sub-
criminology. Tasks range from “fraud investigations, standard practice questions the regulatory role of these bodies.
to quantifying losses and analysing damages arising
from breach of contract or professional negligence Figure 3 suggests that respondents thought that regulation, either external or self-regulation, was not an important characteristic
claims, valuing a business or other assets as part of a profession. About one-third of general public respondents said self-regulation was important, while just over one-third said
of a marital dispute, assisting with data protection external regulation was significant.
issues, or helping companies that have suffered (or
want to prevent) cyberattacks”.43 Universities such as What does this mean for the regulation of professions? This demonstrates an expectation gap between what the general public
Macquarie University in Sydney and the Queensland expect from professions and the level of regulation that professions have become comfortable with. The primary issue again, is
University of Technology now offer specialised the need for greater transparency and oversight.
courses in forensic accounting to meet demand for
this role. In Chartered Accountants Australia and New Zealand’s (CA ANZ) submission to the Inquiry into Regulation of Auditing
in Australia, CA ANZ highlighted the need to “revisit independence rules and the assessment of how conflicts of interest are
mitigated in an effort to keep pace with consumer and public expectations”.48 The submission also notes that authorities needed
to clearly understand public expectations regarding setting rules and managing conflicts of interest.
Opportunity
It is timely for professions to proactively enhance their transparency and introduce stronger oversight across
their service provisions including assessing any independence rules. Having some self-regulation is a privilege.
Professions must demonstrate that they are prepared to take public considerations into account through
increased accountability and transparency. This will improve trust and help restore damaged reputations.
Chartered Accountants Australia and New Zealand 22THE 21ST CENTURY PROFESSION
Life Long Learning
Historically, junior members of professions have been responsible for less skilled tasks, as part of a professional “apprenticeship”.
Many of these entry-level tasks are now automated. One example from the legal profession is e-discovery software which can
locate and search electronic data used as evidence in legal cases. This software, in use for more than a decade, performs the data
discovery tasks more efficiently and accurately than junior lawyers previously did. While this lowers the cost of service, it also
leads to the loss of a traditional training that would otherwise enable the next generation of a profession to acquire practical skills
and knowledge.49
Universities and professional bodies also play a crucial role in training and education. But are university curricula, and the
education offered by professional bodies preparing students of today for their roles in the future? Our survey results show that
the general public did not regard a university degree as an important characteristic of a profession (refer to Figure 3). Respondents
believed a degree was less important than compulsory ongoing professional development. This supports the view that professions
The keys to the kingdom are changing, or, if not changing, are changing: people need to be knowledgeable, but that knowledge does not necessarily need to originate from a traditional
they are at least being shared with others. university background.
Richard and Daniel Susskind. 52
Opportunity
Professions could benefit greatly by requiring students to take university courses that develop a broader
range of knowledge and skills at an early educational stage, alongside specific disciplinary courses.
For example, technology is changing the way all professions deliver services. Artificial intelligence and
big data analytics are important to service delivery across many firms in many professions.50 Such learning
must also be integrated into professional examinations. Students could take such courses alongside their
core professional courses to ensure that qualifications provide a relevant skillset and a broader and more
agile mindset.
Dilution of the worth of professions?
Associate Professor Michael Smets at Oxford University argues that the reach of different careers into the realm of traditional
professions is posing a threat as “new entrants shake up the industry”. Data analytics companies are operating in the fields of
accounting and consulting, and ‘Legal Tech’ providers have gained ground in law, for example, helping existing law firms to
increase their efficiency and productivity, freeing up their staff to undertake value-add advisory work for their clients as
opposed to compliance .51 By driving down costs, legal tech is also opening access to legal systems to those for whom it was
formerly out of reach.
Chartered Accountants Australia and New Zealand 23THE 21ST CENTURY PROFESSION
Opportunity
CASE STUDY
Our survey responses clearly show that professions are necessary but need to provide different services. For
Legal Tech increases efficiency, transparency and
most members of a profession this will not be a surprise – professions have continued to evolve since inception.
access to legal systems
Professions must, however, also be prepared to engage in innovative business models with “new” professions
to ensure they remain relevant.
Legal technology (commonly known as Legal Tech)
encompasses a wide range of activities including
data analytics for lawyers, document automation and
discovery, and automated legal writing. Law firms in the Acting in the public interest
US and the UK are already using “robot attorneys” to When particular members of professions behave in an untrustworthy manner, this can damage the profession as a whole, argues
predict the success of cases in the courts.53 There is even professional services consultant, Dr George Beaton: “When professionals prove themselves unworthy of trust, public approval of
a legal field dedicated to this activity: computational the profession goes down, and the prestige and presumably – over time – the profits of the profession go down with it”.58
law – the branch of legal informatics concerned with the
automation and mechanisation of legal analysis.54 Traditionally, people expected members of professions to act in the public interest.59 However, results from our survey shown
in Figure 3 indicate that the general public may no longer expect this: only slightly more than a third of our survey respondents
Australia is leading the Legal Tech revolution,55 with indicated they believed that acting in the public interest is an essential characteristic of a profession. Regardless of public
more than 93 Legal Tech firms and a proliferation of expectations, Chartered Accountants, by virtue of their code of ethics, are required to act in the public interest.
start-ups over the past two years.56
As we noted in our recent paper The Future of Trust: New technology meets old-fashioned values, members of professions are
Stanford Law School has a research centre dedicated trusted more than other occupations. Professor Keith Leicht of the University of Illinois argues that overwhelmed consumers
to Legal Tech (CodeX) where researchers, lawyers, simply want professional experts they can trust: “The world of competing risks and information overload has consumers looking
entrepreneurs and technologists are “bringing new for those that will exercise fiduciary responsibility toward them in the areas of health, well-being, finance, etc. Individuals are not
levels of legal efficiency, transparency and access to likely to believe that unfettered free markets will deliver the best outcomes for them. Instead, they will look to expert labour
legal systems around the world”.57 for help”.60
Purpose beyond profit
The phrase “purpose beyond profit” is commonplace, but what does it actually mean? In contrast to the long-held belief that the
purpose of a business is to maximise profit for its shareholders, “purpose beyond profit” suggests that the purpose of business
should more broadly be to deliver value to all of its stakeholders, extending beyond the narrow shareholders’ circle to encompass
its employees, clients, suppliers and the community in which the business operates.
Chartered Accountants Australia and New Zealand 24You can also read
