Death of compliance fears unfounded, work tipped to spike

Edward Chan, co-founder and non-executive chairman of Chan & Naylor, said that due to the ever-changing nature of tax laws, and the increasing population, accountants will always remain in demand.

“Compliance is alive and well in Australia; as long as there’s tax in the country, there’s going to be tax changes, and when [there are] tax changes there’s going to be demand for accountants to explain those tax changes, and in [among] all of that clients will ask you to help them with their compliance to meet the legal requirements,” Mr Chan said.

“Our population’s increasing, the pie is increasing [and] the complexity of the tax laws [is] much more complex,” Mr Chan said.

Mr Chan said while the amount of time spent on compliance work had significantly reduced due to technology, the desktop-to-cloud transition would not “reduce that job from 4 hours to nothing”.

“When I first came into the industry, to do a tax return...that job would take 40 hours to do. When software came in it reduced that job from 40 hours to five hours, so the revolution has already happened,” Mr Chan said.

“Despite a job that took 40 hours that’s now taking four or five hours to do, our margins are still the same, but what’s happened is the client has increased, so there’s a lot more compliance in our country.”

Mr Chan said that because Australians were required to complete tax by law, accounting firms had a beneficial business model.

“It’s not illegal to not take advisory work, but it is illegal to not do a tax return, so for the accountants who are in business, they’ve got a wonderful business because they’ve got a business model where the government drives the business to their door,” Mr Chan said.

“What a great business model; I wouldn’t give that business model up if I were them.”