Ken McHattie CA, ICAS President: The age of disruption

Ken McHattie CA, ICAS President
By Ken McHattie CA, ICAS President

4 January 2017

ICAS President Ken McHattie CA argues that current political upheavals stem from the rapid pace of change in technology.

The past few months have seen the UK vote to leave the EU and the election of Donald Trump. The ramifications of these events will be profound. Although the details are as yet unclear, both prompted plenty of discussion at a recent members’ dinner I hosted in San Francisco. It was a very entertaining evening and many thanks to those who came along for looking after me so well.

While I was there, I visited San Jose, otherwise known as Silicon Valley, where I was lucky enough to spend some time at Cisco Systems’ offices. 

My visit was arranged by Matt Smith, a senior Cisco executive who has been extremely helpful in arranging some ICAS technical webinars. Cisco is a key player in developing the technology behind the 'Internet of Things', such as intelligent kitchens, which will order your groceries using your shopping app and deliver them by drone to your door; driverless cars, which will arrive on demand and bring an end to mass car ownership; or streamed music and film entertainment. 

Businesses such as Uber, Amazon and Spotify are already having a serious impact on the traditional business models in their industries.

While disruption can mean lower prices and improved competitiveness, the downside in many cases is that jobs are lost.

So what? Well, it seems highly likely that the Brexit vote and the election of Donald Trump are, to some extent, consequences of this disruption.

All over the world people are saying they feel disconnected from their politicians; that the benefits of globalisation are passing them by; and that improvements in living standards have stalled. Unfortunately, recent events seem to back this up. While disruption can mean lower prices and improved competitiveness, the downside in many cases is that jobs are lost, particularly in low paid, less skilled areas of the workforce.

So, where do we go from here? Let’s hope technological advances are not impeded by unnecessary and unhelpful regulation. We must be prepared to support the changes that will be necessary to allow the business disrupters to displace the existing models.

What will be the implications of these changes on our profession? The challenges we face are by no means limited to trust and ethics.

I would respectfully suggest that politicians of all hues should prepare themselves for an avalanche of disruption. The Information Age will change our lives in ways few of us will be prepared for. It is almost inevitable that some of our regulatory systems will prove unable to cope with the technological advances on their way to a sofa near you.

What will be the implications of these changes on our profession? The challenges we face are by no means limited to trust and ethics. 

The Information Age is likely to see us having to deal with unprecedented amounts of data. Software developments will allow auditors to interrogate transactions in a level of detail, and to a depth, which hitherto was possible in only small entities. How will we deal with the expectation gap in these circumstances? 

And can we as a profession find ways to support business disruptors within current regulatory regimes or are we too constrained?

The business models of these organisations are one thing, the way in which they run their businesses may be quite another.

One thing is for sure: the worlds of politics and business are facing increasingly difficult challenges, in an increasingly unpredictable world.


This article is in the December 2016/January 2017 edition of CA magazine.

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  • Opinion

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