National Broadband Network to pressure country accounting practices, says business systems expert
Changes in technology and the development of the NBN could force the closure of almost 25% of companies listed on the stock exchange, University of Melbourne business systems expert Professor Colin Ferguson has warned.
“I think it’s going to put pressure on a number of business models,” he says.
“In my view, I could see as many as 25% of companies listed on the Australian Stock Exchange (ASX) disappearing in the next decade because of the proposed NBN roll out and other rapid technological change.”
“There are a number of companies listed on the ASX whose business models are essentially threatened. By and large they are models built around solving information asymmetry problems in markets for goods and services – filling an information gap between a ‘buyer’ and a ‘seller’ – but increasingly people will be able to do it themselves.”
His comments come ahead of the release of the Centre’s first research study tomorrow through the Department of Accounting & Business Information Systems (ABIS). The study, ‘Public Accounting Firm Services in Rural and Regional Australia’ is the first of two examining how accountants view their industry and what their expectations are for the future.
The study was an ARC Linkage project between the University of Melbourne as well as CPA Australia, Deakin, RMIT and Victoria Universities.
The research found that:
- There is a minor undersupply of accounting and allied services in rural and regional Australia
- This undersupply is set to worsen in the next five years
- A shortage of professional staff is the most significant issue affecting the ability of these regional practices to provide services to their clients
- Practices were ambivalent with respect to the level of support provided to country practices by professional accounting bodies.
More than 500 accountants based in country areas across Australia such as Warrnambool, Ballarat, Tamworth and Griffith completed the survey, and while most practices were generally healthy with a satisfactory provision of services, Professor Ferguson says there are significant concerns.
“I don’t think there’s any doubt that practices have to change. Technology is capturing and commoditizing human capital. In the case of accounting practitioners, their expertise in financial matters is threatened by commoditization.”
“Rural and regional accounting practices serve predominantly small to medium size businesses that are essential to regional economic development. The major problem they have is in attracting the staff required to service these SMEs; for some clients, accessing that information is just as easily done over the internet now.”
“I don’t think enough people recognize the issues technology is bringing here”
The Centre for Accounting & Industry Partnerships will officially launch the ‘Public Accounting’ study Friday, 26 March, and will announce the Department of ABIS’ Executive in Residence program for 2010-11. The program is intended to introduce senior business people and accounting practitioners across Australia to the department and its students.
Two of those taking up positions as part of the program are Kevin Stevenson (Chairman, Australian Accounting Standards Board) and Gunther Burghardt (Finance Director – Wine, Foster’s Group Limited).