Accounting Today - - Coverstori­es - From page 1 See CHANGE on 42

those two con­cerns were most fre­quently cited as the big­gest chal­lenges fac­ing the pro­fes­sion, rais­ing a host of sub­sidiary is­sues that ac­coun­tants will need to ad­dress in the com­ing months and years.

Come the rev­o­lu­tion

At their broad­est, de­vel­op­ments in tech­nol­ogy are hav­ing so­ci­ety- and econ­omy-wide ef­fects that will change the way we all con­duct busi­ness and our lives. “Mas­sive shifts in tech­nol­ogy like data au­to­ma­tion, blockchain and ar­ti­fi­cial in­tel­li­gence are ush­er­ing in what some are call­ing the ‘Fourth In­dus­trial Rev­o­lu­tion’ and oth­ers (per­haps more ac­cu­rately) are call­ing ‘the Trans­for­ma­tion Econ­omy,’” ex­plained Joe Woodard, chief ex­ec­u­tive of­fi­cer of Woodard Events and the or­ga­nizer of the an­nual Scal­ing New Heights tech­nol­ogy con­fer­ence.

That will mean wide­spread changes to client de­mands, em­ploy­ment prac­tices, and how busi­nesses are run, but those tech­nolo­gies will also have very spe­cific ef­fects on ac­coun­tants.

“The in­tro­duc­tion of data an­a­lyt­ics and in­no­va­tive tech­nolo­gies, such as ar­ti­fi­cial in­tel­li­gence, bots and drones, pro­vides the op­por­tu­nity for the great­est change in the ac­count­ing pro­fes­sion since the pas­sage of the Se­cu­ri­ties Act of 1933 and the Se­cu­ri­ties Ex­change Act of 1934,” ex­plained D. Scott Showal­ter, chair of the Fed­eral Ac­count­ing Stan­dards Ad­vi­sory Board, and pro­fes­sor of prac­tice in the Poole Col­lege of Man­age­ment at North Carolina State Univer­sity. “No mat­ter the dis­ci­pline, whether au­dit, ac­count­ing, tax or ad­vi­sory, all will be af­fected by these in­no­va­tions.”

The con­cerns aren’t lim­ited to the po­ten­tial for tech­nol­ogy to com­modi­tize core ser­vices like the au­dit, book­keep­ing and tax prep (though that cer­tainly wor­ries many); they also en­com­pass the po­ten­tial for those ser­vices and the en­tire role of ac­coun­tants to be rad­i­cally re­shaped.

“Tech­nol­ogy’s ex­po­nen­tial ad­vance­ment is im­pact­ing the pro­fes­sion in pro­found and un­prece­dented ways,” ac­cord­ing to Mary­land As­so­ci­a­tion of CPAS chief com­mu­ni­ca­tions of­fi­cer Bill Sheri­dan. “Ar­ti­fi­cial in­tel­li­gence, cog­ni­tive com­put­ing, blockchain, and even more main­stream tech­nolo­gies like cloud com­put­ing and so­cial me­dia are trans­form­ing what ac­count­ing and fi­nance pro­fes­sion­als do — and what they need to know. Our very ex­is­tence de­pends on our abil­ity to learn the skills that will let us work side-by-side with the ma­chines and do the things they can­not yet do.”

‘The rel­e­vancy of the ac­count­ing pro­fes­sion in the next decade will be largely im­pacted by how ca­pa­ble we are at vi­su­al­iz­ing and har­ness­ing the po­ten­tial ben­e­fits of new tech­nol­ogy, and how will­ing we are to make the changes nec­es­sary to take ad­van­tage of the en­hanced tech­nol­ogy of to­mor­row.’

There was lit­tle ques­tion among ac­count­ing’s lead­ers that ad­vance­ments in tech­nol­ogy were set­ting the pace, and that the pro­fes­sion needed to do its best to keep up.

“The rel­e­vancy of the ac­count­ing pro­fes­sion in the next decade will be largely im­pacted by how ca­pa­ble we are at vi­su­al­iz­ing and har­ness­ing the po­ten­tial ben­e­fits of new tech­nol­ogy, and how will­ing we are to make the changes nec­es­sary to take ad­van­tage of the en­hanced tech­nol­ogy of to­mor­row,” said David Vaudt, chair­man of the Gov­ern­men­tal Ac­count­ing Stan­dards Board.

But while Vaudt saw this chal­lenge play­ing out over a decade, oth­ers weren’t so sure there was even that much time. Cit­ing the “ex­po­nen­tial rate of change” that blockchain, AI and big data will bring to au­dit and ac­count­ing, In­traprisete­chKnowl­o­gies man­ag­ing di­rec­tor Donny Shi­mamoto warned, “Many ac­coun­tants think it will be a slow change, but be­cause it’s an ex­po­nen­tial change curve, it will sud­denly be here and peo­ple aren’t go­ing to be ready. We need to start get­ting ready to use these tech­nolo­gies now by bet­ter un­der­stand­ing risk and con­trols (es­pe­cially IT risk) and data an­a­lyt­ics.”

Mean­while, Jan­ice Gray, vice chair of the Na­tional As­so­ci­a­tion of State Boards of Ac­coun­tancy, was con­cerned about lim­its on other rel­e­vant re­sources: “All of this change re­lated to tech­nol­ogy and ar­ti­fi­cial in­tel­li­gence will af­fect small firms and re­quire close mon­i­tor­ing,” she said. “With re­sources lim­ited for small firms, it could af­fect their abil­i­ties to au­dit clients and thus fur­ther di­min­ish the pool of au­di­tors avail­able to pro­vide ser­vices to smaller clients in an eco­nom­i­cal man­ner.”

De­spite wide­spread be­lief that ad­vance­ments in tech­nol­ogy rep­re­sent a ma­jor chal­lenge for ac­coun­tants, there was an al­most equally wide­spread be­lief that they could also of­fer so­lu­tions to many of the pro­fes­sion’s prob­lems, and op­por­tu­ni­ties for sig­nif­i­cant growth.

That raised a red flag, how­ever, for CPA Trend­lines CEO (and for­mer Ac­count­ing To­day editor-in-chief) Rick Tel­berg, who warned against an over-re­liance on non-hu­man so­lu­tions.

“Too many firms are look­ing for so­lu­tions from new tech­nol­ogy, soft­ware and apps, to the detri­ment of skills-build­ing and process im­prove­ments that would bet­ter serve clients with broader and deeper ser­vices,” he said. “In short, firms are pri­mar­ily us­ing tech­nol­ogy to re­duce costs and in­crease pro­duc­tiv­ity, in­stead of lever­ag­ing tech­nol­ogy to get bet­ter at do­ing what clients want most — pro­vid­ing proac­tive in­sight, anal­y­sis and guid­ance. Tech­nol­ogy can re­place peo­ple, and it is; you can see it in hir­ing trends and in per-part­ner in­comes. But tech­nol­ogy can­not re­place the judg­ment and wis­dom that clients re­ally want from their ac­coun­tants. This techno-cen­tric be­hav­ior is push­ing aside the client-cen­tric habits that have made ac­count­ing the great pro­fes­sion it re­mains to­day. The pro­fes­sion does so at its peril.”

Up the value chain

Tel­berg’s warn­ing was well-taken by many of the lead­ers Ac­count­ing To­day sur­veyed, who agreed that, in the face of all this tech­no­log­i­cal change, the pro­fes­sion needs to dou­ble down on bet­ter serv­ing clients, and to move up the value chain in terms of the ser­vices it of­fers.

“The chal­lenge is to switch our roles from that of com­pli­ance worker to that of knowl­edge worker and con­sul­tant. By uti­liz­ing all of the new dig­i­tal tools of AI

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