For all the disruption that technology is bringing to the accounting profession -- and the economy in general -- it’s also going to be crucial to their success, according to CPA.com president and CEO Erik Asgeirsson.
“The firms that are leveraging technologies like artificial intelligence are going to win in the end,” he told an audience of accountants during his keynote at the 2017 Digital CPA conference, held in San Francisco in early December. “You can’t fear the technology and circle the wagons -- you need to see it as an opportunity.”
Technology will disrupt and commoditize many of the profession’s traditional services, Asgeirsson acknowledged, but at the same time it will help accountants move up the value chain. “Automation is going to win on the low end,” he said, “and that’s OK because that frees you up to bring the services clients really value.”
As an example of the sort of opportunity created by new technologies, he offered client accounting services powered by cloud-based software. “If you want to see what lies ahead for tax and audit, look at what we’ve seen in client accounting services over the past decade – with the cloud, virtual CFO services are now an increasingly important driver of CPA firm revenue growth,” Asgeirsson said, noting that CAS offerings average growth of around 20 percent across the profession, while more traditional services are in the 8-10 percent range.
CAS currently accounts for approximately 10 percent of firm revenues, so there’s room for expansion. “There’s clearly a need for more planning,” Asgeirsson said. “We need to put in place more structure, and more language around describing the CAS service.”
With that in mind, CPA.com is planning a survey with the PCPS Section of the American Institute of CPAs to develop metrics and benchmarks around pricing and best practices; setting up a series of roundtable groups with firms of all sizes to share best practices; and creating advocacy and support materials to help sell the idea of CAS within accounting firms.
Looking to the future
CAS may be an area where the profession is currently learning to leverage technology, but there are other areas coming up where the impact may be even more significant.
Auditing is one area in particular where Asgeirsson and other leaders of the profession expect significant change.
“The heart of the evolution in the audit is about the advancement of new methodology with the development of new technologies,” he said. “CPA.com is working toward a vision of a dynamic audit solution methodology, leveraging big data to automate inputs and drive value-add around the financial audit.”
During the Digital CPA conference, CPA.com, the AICPA and audit and analytic software developer CaseWare announced the impending release of a dynamic preparation, compilation and review solution, with the long-term goal of creating a broad, automated audit solution.
Asgeirsson also pointed to coming changes in the tax area, where technology is allowing nontraditional providers to compete with accountants in tax prep and planning, while also allowing CPAs to change how they interact with clients.
“2018 is going to be a massive change potentially for tax. Nontraditional providers are thinking about the space, and client demands are changing,” he said, predicting, “You’re going to see a sea change in how firms have tax planning conversations with clients.”
Finally, he noted the potential for blockchain, which offers the prospect of “a new, very sophisticated database” of information that’s secure, unchangeable and validated at every step.
“Blockchain is about validated information, and when you look at it that way, it’s easy to see why accountants are interested,” he said, explaining how it may change audits significantly -- but not destroy them.
“Blockchain does not mean that the audit will go away,” he said. “There are going to be huge opportunities in private blockchains for audits. There are going to be assurance needs.”
For instance, the creators of the crypto-assets like bitcoin that are currently blockchain’s major application will need impartial assessments of the value they claim to be creating, according to Asgeirsson.
“They actually want regulators and auditors to show up,” he said. “Over the next couple of years, you’re going to see some really interesting assurance opportunities arising around blockchain.”