Because computing power and sensors can now be embedded into so many everyday objects, the scope of what we can measure is rapidly expanding. This constant generation and collation of data, combined with high-quality analysis, contributes substantially to better decision-making.
This could have profound implications for society, business and specifically the accountancy profession. The IoT offers many potential benefits - from helping us to manage the planet’s limited resources more effectively, to taking the guesswork out of accounting estimates. It could play a major role in sustainability, improve the quality of people’s lives and enhance productivity. For example, when it comes to vehicles, the IoT enables preventative maintenance, reduced energy consumption, optimal route planning, asset sharing and accurate useful-life and depreciation calculations.
We must, however, also be wary of the risks. For example, once connected to the internet, vital infrastructure – such as energy grids, hospitals and transport systems – becomes vulnerable to attack from malevolent actors. The IoT also gives significant rise to issues of privacy and ethics, because a lot of the data it generates will relate to people’s individual habits, characteristics, or even health.
It is crucial that chartered accountants know how to embrace the opportunities provided by the IoT, while managing the risks. To assist us to do this, ICAEW’s Business and Management Faculty worked with the Shanghai National Accounting Institute (SNAI) and leading Chinese tech company Inspur, on a joint research project. This included interviewing Chinese businesses, analysing relevant literature and speaking with ICAEW members.
The resulting report, The internet of things and accounting: lessons from China, provides a clear and accessible introduction to the IoT and examines its potential impact on management and accounting. It presents some thought-provoking ideas, which I hope many chartered accountants and other finance professionals will explore and build on. Please have a read here and consider how it could support you and your organisation.
If you have any questions or examples of how chartered accountants can utilise the IoT, please contact our Business and Management Faculty on firstname.lastname@example.org.
For more on this and other matters, please follow me on Twitter @MichaelIzza.