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World Congress of Accountants 2018 blog: The law of unintended consequences

The law of unintended consequences is one of life’s absolute rules – that when humanity takes action, invariably there will be unforeseen results. When The Accountant editorial team goes to Sydney to attend and report on an accounting congress, the unintended consequence will be one of them getting sun burnt, for example.

Professor Niall Ferguson mentioned this rule in his address at the start of the first day of the World Congress of Accountants 2018 (WCOA2018), and this clearly caught the attention those present.

In at least three sessions over the following days, we spotted a question on unintended consequences being asked by the audience on the Congress’s app – on talks about topics as diverse as block chain and sustainability reporting.

In some cases, the question did not end up being put to the speaker or panel, but clearly this idea was something a number of the 5,600 accountants present at the Congress were curious about. Over the course of four days in Sydney, dozens of speakers gave presentations, led workshops, and had conversations around virtually every facet of accounting. A lot of this was about the future – about how accounting can help combat climate change, about how the balance of the world economy is shifting towards Asia and how this will impact the profession, and how younger generations are destined to impact on the industry.

There were a number of linked themes which came through the various talks, but one was around climate change. Through ‘non-financial’ reporting, the accounting profession is in a key position to help enlighten the world on which companies are doing what to help lessen their carbon footprint, and the damage they are doing to the environment.

Next you have the rise of the younger ‘Generation Z’ beginning to enter the workforce. As a generation, the general consensus is they are less driven by purely capital, but are more likely to take into account environmental impacts of a company, and they want a company to have a sense of purpose.

For an accounting profession, which has traditionally existed as a way of giving investors reasonable confidence that what a company is reporting is true and proper, this could cause issues in recruitment. So the rise of reporting on other forms of capital (cyber capital, human capital, environmental issues, etc) could be coming at a convenient time.

It is ironic that these themes are becoming more prominent at a time when many governments are lurching to the right. In the US, Trump has pulled the country out of the Paris Agreement, Brazil has recently elected a president who many fear will oversee the destruction of vast swathes of the Amazon Rainforest (one of the planets few remaining carbon sinks). Meanwhile there is evidence China is secretly building coal powerplants at an accelerated rate, while Australia – a country seemingly perfect for solar and tidal electricity – doggedly continues to promote the power of coal.

While accountancy is no doubt an important part of the world economy, what can one industry do when governments around the world are apparently moving in the opposite direction when it comes to protecting the environment?

That question was addressed in the penultimate session of the congress. Ban Ki-Moon, former secretary-general of the UN between 2006 and 2016, president and chair of the Global Green Growth Institute and a key driving force of the Paris Climate Change Agreement, noted that the word accountant comes from the word accountability. It is therefore the role of accountants all over the world to hold those in power accountable.

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