Current Accounting Industry Trends in 2024

With the increasing adoption of AI, blockchain, and cloud accounting technologies, staying ahead of industry trends is crucial for navigating the changing landscape of the accounting industry.

In my career as an accountant, I have never seen such a rapid change in processes and efficiency as I have in the past two years.

Below, I have outlined the emerging accounting trends in 2024 to help you stay on top of the latest changes in the industry.

Technology Trends

AI and Automation in Accounting

48% of accountants plan to invest in artificial intelligence (AI) and automation to enhance efficiency by streamlining processes and reducing human errors.

These technologies allow for automated data entry, reconciliations, and report generation, improving the accuracy of financial transactions and statements.

Blockchain for Secure Accounting Management

The increasing adoption of blockchain technology in accounting is helping enhance security, reduce the risk of fraud, increase efficiency, and boost transparency and reliability.

These applications underscore its potential as a vital tool for recording and managing financial transactions.

Big Data and Analytics

The integration of big data, analytics, and business intelligence tools is transforming how accountants process and use financial information.

Accountants leverage these technologies to extract valuable insights from large datasets, enhancing decision-making and enabling more effective trend identification and anomaly detection.

Cloud-based Accounting

The global accounting software market is projected to reach $38.08 billion by 2030, with a significant shift towards cloud-based solutions.

These solutions offer advantages such as lower upfront costs, automatic updates, and instant data access from any location, making them a smart choice for companies with a hybrid workforce.

Third-Party Involvement

The rise of digital platforms like Uber Eats and Square has led to increased outsourcing of business-critical functions.

This trend benefits accountants by providing another source of information on client dealings and simplifying transaction tracking through third-party records.

Data Security Emphasis

In response to rising data breaches, the accounting industry has increasingly focused on data security.

The average cost of a data breach in 2023 was $4.45 million globally, highlighting the importance of robust security protocols, regular employee training, and the adoption of tools like password managers and VPNs.

Regulatory Trends

Increased Regulatory Supervision and Enforcement

The regulatory landscape in 2024 is expected to be influenced by economic fluctuations, election-year uncertainties, and legal challenges, contributing to elevated levels of regulatory intensity across various domains.

Regulatory agencies are intensifying the supervision, enforcement, and investigations under both existing and new regulations, affecting areas like ethics, conduct, and consumer and investor protections.

Focus on Risk Management and Governance

Boards are expected to provide credible evidence of dynamic risk assessment and decision-making, with regulators demanding increased formalisation of documentation and controls to manage novel and complex risks.

Data and Cybersecurity Regulation Enhancement

Regulatory scrutiny in the data and cybersecurity domain is increasing, with an emphasis on governance, incident reporting, and identity/access management.

Companies are expected to develop frameworks that balance regulatory requirements and business needs.

Prudential Regulators’ Elevated Expectations

In 2024, prudential regulators will increase expectations around sustainability, strength, resilience, and fairness, focusing on data, models, and “model-like” risks to enhance security and privacy.

Remote Work Trends

Remote Accounting Jobs Remain Available

As of May 2023, over 600 remote accounting positions were listed on the job board of talent solutions firm Robert Half, highlighting the continued availability and demand for remote work in the accounting field.

High Interest in Remote Positions Among Accounting Professionals

Nearly 9 in 10 workers looking for a job change are interested in hybrid or fully remote positions, demonstrating a strong preference for flexibility in work arrangements.

Increased Job Satisfaction and Desire for Remote Work

A significant 91% of survey respondents reported enjoying working remotely, citing flexibility as the primary benefit.

This trend underscores the positive impact of remote work options on job satisfaction.

Cybersecurity Trends

Increased Cloud-based Threats

The rapid adoption of cloud computing has led to new security concerns, particularly due to unclear responsibilities in implementing and maintaining security for cloud deployments.

This shift has exposed critical applications to threats, especially as attacks on software supply chains are expected to rise.

AI in Cybersecurity for Accounting

With artificial intelligence (AI) becoming more mainstream, its application in accounting for predictive analytics and automated responses is expanding.

The global market for AI cybersecurity is projected to reach an estimated $133.8 billion by 2030, highlighting the role of AI in enhancing preventive cybersecurity measures.

Rise in Cybercrime Costs for Accounting Firms

Cybercrime is increasingly targeting accounting firms, with small practices facing an average cost of $46,000, medium-sized practices around $97,200, and large practices $71,600 annually due to cyber-attacks. The number of cyber-attacks has risen by 23% in the past year.

Accounting firms are prime targets for cyber-attacks due to the valuable financial data they hold.

The adoption of AI has enabled hackers to develop more sophisticated attacks, including hyper-personalised spear phishing and AI-generated deepfakes, posing new challenges for accounting cybersecurity.

Education and Skills Development Trends

Decline in Accounting Majors Due to the 150-Hour Requirement

The accounting profession faces challenges with declining interest in accounting majors, partially attributed to the 150-hour requirement for CPA licensure.

Critics argue that this requirement has not achieved its goal of preparing students better for the profession and has instead deterred potential students due to the additional cost and time commitment.

IFAC’s Proposal for Transforming Accounting Education

The International Federation of Accountants (IFAC) has proposed updating accounting education globally to prepare “future-ready” accountants.

This initiative aims to equip accountants with five key competencies, including digital acumen and data interrogation, to adapt to the Fourth Industrial Revolution’s impact on the profession.

Impact on CPA Exam Pass Rates

Studies examining the 150-hour education requirement have shown a significant decrease in the number of CPA exam candidates and a slight increase in pass rates for first-time candidates only.

This suggests the requirement may not have had the intended positive impact on CPA exam success rates.

Salary Comparisons and Economic Impact

The starting salaries for fields such as finance and technology are often at least 20% higher than for accountants, contributing to the profession’s challenges in attracting new talent.

As the supply of entry-level accountants declines while demand remains strong, the economics of supply and demand are expected to eventually drive up starting salaries for accountants.

Conclusion

From AI adoption to cybersecurity, I’ve covered what I believe to be the crucial trends that will continue to shape the accounting industry in 2024.

In the rapidly changing technological, regulatory, and social environments, staying on top of these trends is crucial.

If you have any questions or need further insights, don’t hesitate to contact me or my accounting team at M2 Corporate.