Ethical Leadership in A Digital Age 

The accountants and auditors need technology-based competence if they want to keep delivering in a digital world. This competence will bring them ethical basis for claiming their leadership roles and responsibilities.

NEW CHALLENGES

In changing times, the incoming new ideas and technology are disruptive, until we learn how to explore and utilize them. This is exactly what happens with professional accountants and auditors, who are yet to embrace the digital revolution.

The landscape for the professional accountants and auditors (PAs) have changed extensively and so rapidly, that staying relevant is a big challenge. The traditional roles of PAs have been taken up by machines for input of data, analysis and final delivery of information. With the availability of sophisticated software, computer modelling and AI, the PAs are getting redundant. However, the experts have noted that the concept of “purely digital’ is a fallacy which will be falling apart very soon. Instead of purely digital, the metrics of human cum machines capital will be more sustainable. This is the silver lining for PAs who may be facing an existential threat on the advent of digital transformation.

Since the stakeholders are shifting reliance on data scientists and other experts who are equipped with a better skillset of human-machine collaboration, PAs are now redefining their core skills. PAs have been known for deriving information from data and bringing trust to that information. With this role partly switched to machines, PAs need to hone their skills of using technology. According to International Panel on Accountancy Education (IPAE), “Not only we are connected to each other; we are connected to machines, and machines are connected to machines. That’s the big picture”. The core skills of PAs, and resultantly their competence, will now be judged with reference to the pace and agility with which they become part Ethical Leadership in a Digital Age of this big picture. This is a competence paradigm shift!

BEFITTING NEW ROLES

There is no denying that machines will be better and faster than humans for transactional, analytical and prediction tasks in the roles that PAs perform today. However, humans will retain their competitive advantage over machines for non-technical professional skills such as critical thinking, contextualizing information, collaborating, ethical and strategic decision-making, etc., with only one caveat – they equip themselves with new technologies. Once they do, they have the unique advantage of serving as a collaborator between top management and IT teams, and as a moderator for ensuring a balance between innovation and organizational targets.

Even with the systems utilizing machine intelligence, PAs will stay relevant, and sometimes indispensable, because stakeholders need quality assurance for the data used, and information generated. PAs have a centuries old legacy of providing credibility to reports and analysis, and this reputation will pay a long way when people need assurance about digital systems.

Digital systems are always evolving, trying to achieve something new and better, and need continuous evaluation on this path. The measurement of how far a target has been achieved by a newly developed system, involves work of independent experts who are free from a ‘digitization bias’, and who can objectively vouch evaluation – hence, the PAs!

THE ETHICAL LEADERSHIP

Professional competence and due care are the ethical embodiments of the personality of PAs, and often these two are flip sides of a same thing. With their arrangements and their resilience to withstand pressures, PAs always tend to be objectively independent. This trilogy has remained undeniable for the stakeholders, and the same impression will very well be carried during digital

Transformation of the world provided PAs exactly know what is expected of them. Here are some key takeaways: • PAs have to take ‘due care’ which, in a digital world, is not possible without competence in technology

• PAs have to take ‘due care’ which, in a digital world, is not possible without competence in technology.
• PAs independence requires them to have the ability to observe independently.
• PAs need to cultivate curiosity, awareness, contextualization, and evaluation of how the digital information presents itself.
• PAs are expected to lend credibility to evaluation of cybersecurity, algorithms, web-trusts, etc. by selfwork or examining the work of IT teams/experts. They need to develop their competencies.
• PAs will need to be able to derive ‘meanings’ from machine generated analysis, dashboards and digital reports, etc. and to convince Board