The approach and thought process underlying the thesis is explained in this chapter. This section aims to provide enough information for other researchers conducting studies relating to the digitalization of the management accounting sector. As a result, the scholar begins by describing the research design, which includes a description of the study’s actual procedures. This paper then explores the researcher’s methodology, findings, recommendations and offers limitations and future research.
Research Design
The research design is a broad strategy for addressing the study issues. A well-organized research design ensures that the research methods match the research goals, quality data collection, and appropriate analysis to answer the research questions using reliable sources. Good designs allow researchers to draw valid, trustworthy conclusions. The design connects the conceptual research challenge to relevant and doable empirical research. The researcher will adopt the experimental research design, which entails posing open-ended questions to get a new understanding of the subject under investigation. The design was chosen based on what was best suited to answer the following research questions:
 1. ” How will digitalization change the management accounting profession? “
 2. “What skills will a management accountant need in the future to address future challenges of digitalization? “
An experimental design is an excellent strategy for acquiring a new perspective or elucidating your thoughts on a theme. It will further broaden the understanding of the subject, allowing the investigator to understand better why and how things occur. The researcher applies exploratory research to clarify concepts, create priorities, and generate operational definitions. According to the scholar, this field of research is relatively new after searching for literature on the subject. As a result, few scientists have looked at these topics. There is research on the impact of digitization on accounting businesses. However, there is a scarcity of information about accountants’ perceptions about how digitalization would affect their profession. The researcher looked forward to comprehending how digitalization has impacted the managing accounting sector. The ability to convey and obtain new information about the subject benefits from employing this type of study. It allows the writer to take an open approach to data gathering and analysis.
Data Collection
Researchers can use both primary and secondary sources to acquire data. The scholar used primary data in the thesis to obtain material pertinent to the study challenge. Personal interviews played crucial roles in information collection by the researcher. An interview is an excellent way to get information and ensure the writer acquires more information about the participant’s self-awareness, motivation, and personal views on digitalization. The researcher collected secondary facts from the accounting businesses’ websites to learn how digitalization has affected management accounting.
Assortment of businesses and participants
Interviews with five accounting firms provided the basis for the research. The respondents are equally diverse in terms of experience, age, and gender. They have worked anywhere from 9 months to 25 years of experience. All firms were free to select who would be questioned. Interviewing the manager provided an opportunity to examine the company’s entire picture. By interviewing a management accountant, the scholar obtained firsthand information and vision of how digitization has impacted their profession and their skills to attain organizational goals. Random sampling strategy played a significant role in giving each participant equal chances of selection.
Interview method
As previously noted, the researcher primarily collected data through interviews, which would be an excellent method to gather information about digitalization impacts. An interview is a method of gathering more extensive and comprehensive information about a person’s experience, viewpoint, and views about a subject. Interviews provided accurate and consistent data relevant to the research questions. Interviews comprise semi-structured, organized, and unstructured (in-depth) interviews. The investigator applied semi-structured interviews to focus the conversation in one direction while allowing the subject to express themselves freely and clarify any ambiguities.
Interview preparations and guide
An interview guide provided a systematic framework for the interviews. An interview guide lists topics and questions that the researcher wants the interviewee to respond to. The researcher was not required to follow the rules of the letter when conducting a semi-structured interview; hence the researcher used the guide to help in remembering essential subjects and questions. The interview started with a brief overview of the issue and ourselves, followed by a series of straightforward questions. These methods would help the interviewee get off to a good start, such as, “What is your employment position?” and “How long have you been in the accounting industry?” were some of the first questions we asked regarding their background and education. “What problems and opportunities do you connect with the digitization of the accounting industry?” and “What attributes are needed to take advantage of digitalization?” were two of the questions posed. These were open-ended questions so that the reply might offer extra information about the subject.
Interview Completion
Qualitative interviews can be conducted in person, over the phone, via chat, or by email. The researcher considered in-person interviews since they fostered a sense of trust and transparency. This strategy allowed for a smooth dialogue with few interruptions. We were also able to keep an eye on the issue and control it. The researcher utilized a voice recorder during the interview, which all participants agreed to, both writing and oral records. Voice recorders helped the researcher be present throughout the interview to enhance effective communication.
Data Analysis
The researcher used thematic analysis, which entails compiling, dissecting, recombining, analyzing, and closing. The investigator utilized codes to indicate the themes from the data gathering during a thematic analysis. The scholar further used theme analysis for the thesis since it facilitated a rigorous methodology of depth interview data while also providing a more open route for study. This strategy aided the research, which allowed the writer to identify central themes, study critical themes, and notice new difficulties that arose during data collecting and evaluation that the researcher previously overlooked.
Findings: Digitalization of Management Accounting Role
Management accounting digitalization changes the profession significantly in various ways. For instance, IT solutions, particularly automation, increase resource availability due to a significant reduction in the required capacity for repetitive tasks, enabling management accountants to assist with strategic decisions. New business models, a shift in the focus of management accountants, and real-time performance data and reactions are all aspects in support of innovative value-adding operations. Overall, organizations can gain a competitive advantage by effectively managing the data and information made available through digitalization (Puhovichova et al. 140). Due to numerous laws, it is challenging to use all of these benefits. Any significant change to be executed in a firm requires a well-thought-out strategy and overall plan. The development of a performance management approach requires open communication and constructive feedback. Change drivers will struggle to implement changes without strong employee participation. A trial-and-error culture must be established in addition to changing the culture. In an environment where less stability is unavoidable and more uncertainty must be managed, disruptive developments add stress.
Digitalization plays a significant function in allowing workers to try new things, which is critical in dealing with environmental changes but challenging because it contradicts another strategic goal that prioritizes safety through defect avoidance. As a result, digitalization in the management accounting industry is critical for keeping personnel up to date on new technologies, such as artificial intelligence and ERP deployments, to eliminate complications and guarantee that work is completed quickly. Before automating anything, it’s essential to figure out which actions and responsibilities are appropriate and then rate them. Another problem brought up is the expensive expense of building sound IT systems. However, good data management is required to get the most out of any technology. One of the most critical problems is that management accountants’ abilities must be updated to utilize digitization fully.
Artificial intelligence
Learning ability, often known as machine learning in AI, is a common requirement. In actuality, the term “artificial intelligence” was coined in 1956, but it has only recently acquired attention due to a few other factors. Big Data is one of them since when AI confronts new scenarios that necessitate decisions, it consults large amounts of high-quality data. The second wave of digitization is Artificial Intelligence. As a result, it emphasizes how new the technology is in management accounting applications. Several academics stress the importance of AI, predicting that it will undoubtedly become a critical component of business in the future. In the future, AI might make precise decision-making recommendations to the management accountant, or systems could make sovereign judgments and design steering measures based on management practices.
A well-known Artificial Intelligence software example is IBM Watson Analytics. This tool could be cooperative in MA, particularly for reporting and risk management processes, where data collection, correlations, visualization, and forecasting are obliging. Artificial neural connections are a powerful technology that replicates human-machine learning in today’s AI. These networks learn from processed data by looking for patterns, adjusting connection strength, and taking into account terrible outcomes to find solutions to previously unforeseen situations. As a result, the foundation for machine learning is artificial neural networks. As a result, as the amount of data being studied rises, it helps apps enhance the quality of their analysis and discoveries since the algorithm can constantly comprehend the magnitude of elements and how they are related. BA models, for example, can be updated and enhanced regularly to achieve the highest level of analytical quality; DataRobot, BigML, and PredictionIO all provide IT solutions. The storage and processing of data and applications on the cloud are called “cloud computing.”
Artificial Intelligence tools help management accounting institutions raise the visibility of organizational plans, a dream of total control in which distance is eliminated, and databases and analytical algorithms know people better than they know themselves. It also increases the number of misleading connections and the necessity to choose from vast amounts of data and alternatives. Furthermore, AI assists management accounting managers in addressing various complicated issues that their companies encounter. Management accounting is one of the most valuable tools accessible to a manager, who may use it to assess opportunities, situate action directions, and develop the corporate strategy. Thus, management accountants add significant value to firms by identifying and eliminating parts of the issue.
AI plays a significant role in management accounting actions, including processing large amounts of data for policymaking, improving speed and timeliness in decision-making; thus, allowing for time and money savings, capability to monitor overarching business practices, enabling planning due to intuitions created by higher data volumes, productivity gains, reducing operating costs because of better data quality, and possible new sources of income as a result of connecting ability of data quality and improving interactions with customers due to the open nature of data. Fundamentally, artificial intelligence (AI) promotes the horizontality of financial organizations, allowing companies to benefit from it at both intra- and inter-organizational levels. The corporation becomes a collection of social networks connecting various stakeholders within and without the enterprise. Management accounting firms may utilize AI in managing their accounting data; thus, it may be transformed into actionable insights that drive company decisions and help improve every customer engagement and increase operational improvements.
AI is more than a support function; it is a crucial component of value generation and a competitive advantage. It helps firms operate better with streamlined business processes, increased efficiency, better operational planning, and the ability to respond swiftly to unforeseen events. AI and the rapid utilization of information and communication technologies have accelerated financial institutions’ Big Data growth and effect. It allows for new management accounting data and forecasts based on existing data. On top of that, AI also assists accountants in creating precise forecasts based on extensive comprehension of the macro environment, permitting them to identify the fundamentals that may affect a firm’s incomes and more accurate prices. Therefore, AI implementation provides a strategic edge for management accounting firms in the future, essentially putting rivals out of business.
Blockchain and data analytics
Blockchain technology, a machine recording system that uses bitcoin in a customer network, is another trend that may alter the demand for accountants. While bitcoin, a virtual currency that keeps track of transactions and enables the construction of new currency systems without the use of a bank, has raised blockchain’s popularity, the technology has progressed significantly. The application of blockchain in management accounting stems from “the promise of a new form of a holistic approach – one that can be updated and confirmed regularly without fear of being changed or damaged.” Accountants are naturally interested in blockchain since it allows for real-time access to books and records and the establishment of intelligent contracts and recordkeeping. Blockchain has already been adopted by some accounting firms, including the Big Four — EY, PwC, Deloitte, and KPMG. While blockchain data can verify an asset’s ownership, its condition, location, and genuine value must be confirmed.
By lowering the expenses of storing and maintaining ledgers and enabling complete transparency into financial assets and history, blockchain can help enhance audits. When combined with other automation technologies such as machine learning, Cryptocurrency will enhance transaction processing accounting, but only for experts. Instead, competent accountants will look into the real-world economic consequences of blockchain records, linking them to economic reality and valuation. A debtor’s existence, for example, can be validated using blockchain, but the debtor’s recoverable valuation and financial value are still up for argument. The value of a company’s data, for example, could widen the scope of accounting by allowing more aspects to be included that are currently judged complex or untrustworthy to assess.
Reporting
Each decision should be centered on accurate and relevant information obtained from a credible and secure database. Data scientists and other departments like IT are increasingly challenging controllers’ primary role of building and enhancing such a “single source of truth.” New information procedures may likewise contribute to an additional self-service, decentralized-based broadcasting and decision-making setting, affecting the kind of control and the responsibility of controllers. Conversation bots and additional robotic mechanism automation tools can save time and money for businesses, but they need to be managed carefully.
The Management Accountants’ Exposure to Digitalization
Several businesses are still at an early stage of digital transformation. Specific organizations have numerous information about their customers, products, and transactions. As a result, those polled are enthused about the potential of big data. The respondents appear more interested in the subject matter, including the use of modern technologies like AI and RPA (Robotics Process Automation) (RPA). Every company that uses RPA also employs AI; most respondents use ERP systems hosted in the cloud. According to the research, those polled are happy with the cloud solution and feel that the data is safe and secure, and accessible at all times and in all places. Several clients Find ERP fascinating and amusing since they can utilize it on mobile apps and track the progress on their mobile devices. Cloud-based accounting systems have numerous advantages; traditional systems take longer to implement than cloud-based systems.
Businesses are implementing digitization, and most of them are adopting artificial intelligence and robots to ease their work; they are just starting their journey to Robotic process automation (RPA) technology. Automated processes are becoming more commonplace since it is a tool that countless companies have long-term plans. Robots are not the most important technology for companies since they are programmed to execute a limited number of simple, repetitive activities. Appropriate advancements must be in place to automate the repetitious tasks, and the government needs to support and encourage new ideas. Most management accountants are aware that robots are utilized on less than ideal systems to save money; hence companies only use AI when necessary because accountants have to deal with it in a complicated manner. Companies that have been using AI for a long time are finally seeing results because they realize the advantages and are optimistic about their potential.
Challenges of Digitization and Opportunities
Artificial Intelligence, which may be incorporated into auditing and accounting activities, can reduce the need for human labor considerably. Artificial intelligence can help with more structured, programmed, and repetitive jobs, where getting human intelligence and expertise is not time-wasting. Innovative technologies are not being designed to take the place of human intellect; instead, they are being integrated to aid accountants become restored strategic consultants by offering crucial firm visions. Machine learning and AI will offer accountants more access to real-time data from more sources. Though AI is in its early phases still, most companies apply it mainly for intelligent document OCR (“Optical Character Recognition”) and funds transfer automation. Software development leads to a knowledge of invoices rather than just matching order numbers and invoice amounts.
Businesses may utilize the blockchain to get real-time data from several sources. Most organizations opt for this distribution method to protect sensitive financial data and streamline complex operations. The term “blockchain” should not be used to describe the technology. Blockchain can replace traditional auditing, compliance, and reconciliation chores due to its unwavering security and transparency. Technology advancements open up new avenues for delivering information regularly. Accounting is still based on the evaluation and analysis of financial data regularly, but stakeholders, auditors, and others expect more detailed and real-time reporting. A transition period and implementation processes will be required to move from an episodic basis of bookkeeping and reportage positioned exclusively on financial information to an additional complete view of accounting reporting. Current jobs will be displaced and disrupted due to implementing and transitioning to a more comprehensive accounting function.
Higher performance and greater efficiency can be achieved by accounting experts through the usage of digital systems while reducing waste and increasing competence. Accountants will be looking for new methods to do things when working electronically, developing more complex accounting tools, which will aid in the efficient flow of accounting work. Accountants will have to learn to use new accounting systems and technologies to work digitally, advancing the accounting industry. Digital working allows us to work from any comfortable and safe location while keeping the COVID-19 scenario in mind. It is more cost-effective to conduct business via digital means because it reduces the need for actual office space and other expenses such as stationery travel. Therefore, accountants can complete clients’ data presentations in a specific time frame and low cost.
Technology provides a plethora of options and assists individuals in doing various tasks. The electronic working environment, among other things, will make full use of various technology. The digital world uncovers talented people by allowing them to accomplish tasks from anywhere in the world and give a surprise, high-quality results. Customers would have more faith that their administrative job is automatically done because it is more evidence that their chosen accounting specialists will perform it. It will also make the expert more accountable, ensuring that the work is precise and reliable. The electronic performance of financial work will aid in the proper record of information, evading the damage of data information in traditional paperwork systems. It will also assure the security of the data by applying many layers of protection. Another advantage of digital platforms in accounting and artificial intelligence is that they provide 100 percent accuracy and automatically detect faults, preventing human error. The various accounting programs give high accuracy and error detection technologies, ensuring that the financial work is relevant.
Challenges
Accountants’ tasks and actions include critical intellectual and imagination, thus mechanizing the errands and actions that would be problematic, impacting the accounting occupation’s development. Auditors must be ready for computerization, which requires specific and new information and assistance. Automation is on the horizon for accountants who perform tedious, repetitive, and standardized tasks. Data mining, experience and understanding systems, and a more comprehensive network of facts are potent tools to manage a firm effectively. Because of automation, there will be a reduction in the need for human data input and an increase in speed, reliability, and correctness through digital technologies like artificial intelligence and cryptocurrency.
In the future, bookkeepers and auditors will be supplanted by consultants, counselors, and accountants’ technologists. Because of this, accountants must seize the opportunity presented by technological improvements that make their work more accessible and more efficient. Large firms must spend substantial money digitizing their operations and incorporating new technologies to implement expertise management. Investing decisions, especially for small shareholders, could be significantly impacted by widespread accounting and auditing automation concerning capital markets. In the modern digital financial accounting and reporting context, a regular balance sheet is provided to readers of the income statement. Lastly, human intellect will always trump machine learning, even though various tasks done by auditors can be mechanized.
Future Situation
The accounting industry is undergoing a fast transformation due to advancements in technology. It is becoming increasingly commonplace for the financial department to use technology, machine learning, micro-robots, and various other technologies. Intelligent technology has only recently become available to organizations; therefore, they continue to employ automated accounting methods that are decades old. Computers may assist with accounting tasks, including supplier interaction, audits, account payables, purchasing procurement, cost control, closure procedures, and client questions. The prospective availability of accounting jobs is influenced by advances in technology (Rijanto et al., 3079). Automated systems take over tedious activities and link data and consumers, doing more analysis. Thus, the tasks and responsibilities of accountants will change shortly due to innovation
Students will learn data analytics, management accounting, complicated financial reporting abilities, and a deeper understanding of modern accounting technologies and advanced analytical procedures with an online master’s degree in accounting. In general, artificial intelligence (AI) will offer attempts for learners to simulate cognitive capacities in computers so that they can solve problems on their own and improve their solutions over time (Hassan et al. 143). “Strong AI” and “weak AI” or “narrow AI” are the two categories of AI that scholars will learn in future. Strong AI refers to ideas aiming to emulate and imitate human brain functions, whereas narrow AI refers to systems that merely demonstrate intelligent behavior in limited domains. Artificial General Intelligence (AGI) will offer a software that can handle complex problems in a variety of fields while also directing itself. Weak AI is currently more widely used and is included in modern AI software.
Artificial intelligence will provide real-time information about financial matters because it can generate brochures using natural linguistic dispensation and computer ideas faster, making daily reportage possible and cheap. The accounting industry is rapidly evolving due to technological advancements. Automation, adaptive intelligence, machine learning, and mini-bots will become integral components of the finance team. Even though intelligent technology is still in its early stages, countless organizations rely on manual accounting systems. Accounting duties that computers will assist with include supplier engagement, audits, accounts payable, purchasing, procurement, cost optimization, closure procedures, and customer questions. The kinds of accounting jobs that will be accessible in the future will be influenced by intelligent technology. As intelligent technologies take over repetitive jobs, humans conduct more analysis, making them the crucial link between data and people. As a result, technology will impact the duties and expectations of accountants in the future.
Blockchain and data analytics
Blockchain technology, a machine recording system that uses bitcoin in a customer network, is another trend that may alter the demand for accountants. While bitcoin, a virtual currency that keeps track of transactions and enables the construction of new currency systems without the use of a bank, has raised blockchain’s popularity, the technology has progressed significantly. The demand for blockchain in accounting stems from “the promise of a new form of a holistic approach – one that can be updated and confirmed regularly without fear of being changed or damaged.” Accountants are naturally interested in blockchain since it allows for real-time access to books and records and the establishment of intelligent contracts and recordkeeping. Blockchain has already been adopted by some accounting firms, including the Big Four — EY, PwC, Deloitte, and KPMG. While blockchain data can verify an asset’s ownership, its condition, location, and genuine value must be confirmed.
By lowering the expenses of storing and maintaining ledgers and enabling complete transparency into financial assets and history, blockchain can help enhance audits. Accounting firms could use blockchain to obtain visibility into their firms’ available assets and liabilities, allowing them to concentrate on strategy and valuation rather than recordkeeping. When combined with other automation technologies such as machine learning, Cryptocurrency will enhance transaction processing accounting, but only for experts. Instead, competent accountants will look into the real-world economic consequences of blockchain records, linking them to economic reality and valuation. A debtor’s existence, for example, can be validated using blockchain, but the debtor’s recoverable valuation and financial value are still up for argument. The value of a company’s data, for example, could widen the scope of accounting by allowing more aspects to be included that are currently judged complex or untrustworthy to assess.
Skills Needed for Management Accountants in The Future
As big data becomes more complex, accounting professionals will have to be conversant with information extraction methods to harvest organized and unstructured information. Using data analysis techniques skills, they will need to gather and maintain this knowledge and then evaluate and present stories. Industry analysis, planning, budgeting, operating decision analysis, risk assessment, and invention fall under the “strategic management” umbrella. Automated accounting operations will necessitate that accounting professionals examine the quality and productivity of accounting systems and provide recommendations for improvement. Advanced costing methodologies and procedures will also be required to ensure data security, protect assets and meet the legal and disclosure requirements. Skills in activities and business strategy include knowledge of the company’s industry and understanding operational processes, quality control, and program management.
Future Challenges and Opportunities
Lack of specialized IT skills, a lack of organizational change management, changing consumer expectations, a lack of a clear strategy, financial worries and limits, security concerns, and inadequate data management are all issues that need to be addressed. The achievement of any effective digital transformation depends on a group of dedicated and highly qualified IT professionals. However, it is becoming increasingly hard to unite this team. Increasing investment in new technology is creating a lack of skilled workers. Organizational structures that are antiquated, ineffective, and inflexible may hinder the success of the transformation, which was not clearer when firms struggled to migrate to a distant design explicitly in 2020 quickly. Currently, people have realized what they may do on their laptops and smartphones. As an outcome, customers have never been choosier or demanding. For instance, it is no more prolonged anxiety to have touchless purchasing options. Therefore, firms are forced to navigate rough waters, sure of their need to move forward but unclear of how. If a business does not have a strategy, its change will not get off the ground.
Opportunities
Digitalization will provide various opportunities, such as the utilization of Artificial intelligence. Future utilization of technology will generate digital management accounting solutions, new digitalization series, new possibilities, and fragmented firms. Most firms will utilize digitalization to attain their goals, attract more clients, or enhance efficiency. AI will help businesses perform standardized responsibilities that contribute to a repetitive effort that can be robotic. Companies would have no problem taking over their clients’ financial activities since technology allowed businesses to become more effective and discerning. The fragmented business would be competitive and more likely to merge with other industries. According to the survey respondents, competition with other firms in a similar sector and competitors from other fields.
Management Accountants’ Role in The Future
Accounting professionals will need to be familiar with data visualization techniques and tools to assist clients and executives in making sense of the data. Accounting specialists use predictive analytics and estimating to deliver tactical advice to consumers or administrations. Because computerization frees up spells spent on additional ordinary tasks, accountants may devote more time honing their analytical skills. The accounting will undoubtedly need to be technically advanced to stay up with the evolving business. As more innovative technologies advance and more institutions migrate their data to cloud-based platforms, accountants must become skilled in exploiting it to give customers efficient financial statement examination and stay modest.
Recommendation and How to Implement These Recommendations in The Future
The organization’s “economic conscience” should be conscious of its (long-standing) survival and digital strategy. This type of strategy uses digital technologies to give guidance, allowing executives to lead cardinal initiatives, trail their growth, and redeploy energies as wanted. Controllers should handle digital chances and accompanying changes in organizational initiatives and business models, which have numerous ramifications. New KPIs and adjustable steering approaches like the objective and central outcomes system and creative portfolio methodology that integrate traditional and digital commercial representations must be designed and adapted by controllers. Furthermore, typical capital budgeting tactics may be insufficient in the setting of exponential development powered by digital commodities, platform initiatives, and network thrifts.
Organizations should implement digital solutions such as Artificial Intelligence, machine learning, and the implementation of ERP systems. AI improves key processes by enhancing the precision and agility of strategic processes, allowing firms to create sound judgments. Machine learning allows businesses to track consumer trends and processes, which helps them create new goods. Corporations can streamline their business activities and centralize their data using an ERP system, allowing for better reporting and a data-driven, collaborative workplace. In light of systemic shortcomings, integration of human ruling and corporate savvy and extensive data and technology use are essential in the submission procedure. Identifying and effectively executing suitable methodologies and drivers are critical concerns. Total automation will probably be successful only in well-defined and comprehensive operations positions.
Data and information made available through digitalization can give businesses a competitive advantage. Firms in the management accounting industry must adapt digitalization as new technologies, such as artificial intelligence and enterprise resource planning (ERP), are introduced. Before automating any tasks, be sure that they are appropriate. Blockchain can improve audits by decreasing the expenses of storing and maintaining ledgers and enabling complete transparency into financial assets and history. Accounting firms could focus on strategy and value creation instead of recordkeeping if the management accounting sector implemented a blockchain-based asset and liability registry. Integrating Cryptocurrency with other automation technologies, such as machine learning, can improve transaction processing accounting.
Management accountants will undoubtedly need to be technically advanced in the future to stay up with the evolving business. As more intelligent technologies advance and more institutions migrate their data to cloud-based platforms, accountants must exploit the platform to give customers updated financial statement analysis and remain competitive. Accounting specialists who want to apply blockchain technology will recognize how to customize data transfers for account balances, agreements, and records and use the necessary tools. In addition, numerous accountants may be required to advise clients, which necessitates them to analyze large amounts of data to discover patterns and trends. Data analysis and other machine learning techniques are necessary.