CPA.com and Confirmation.com have launched RIVIO Clearinghouse, a secure, cloud-based platform for the exchange of CPA source-validated financial documents.
RIVIO—an acronym for Repository of Intelligent Validated Inputs and Outputs—was built for private companies, which lack a central repository for financial information like the Securities and Exchange Commission’s EDGAR system for public companies. Bankers, shareholders and investors can deliver financial documents like audited financial statements through RIVIO, which was built with the same rigorously audited encryption and IT architecture that supports secure online audit confirmation platform Confirmation.com.
CPA.com provides validation that a financial document has been uploaded by a licensed CPA firm and the system prevents companies from changing data once uploaded. Companies have control over who can view information and are also able to recall documents, so that if a financial statement or tax return is withdrawn, RIVIO notifies anyone who has downloaded the document it is no longer the recent version.
CPA.com and Confirmation.com have been piloting the platform with large and midsized accounting firms, banks and private equity firms over the last year. During that process, participating companies have appreciated the clearinghouse’s ability to prevent fraudulent activities like the altering of financial documents or Photoshopping firm letterhead.
“One group that really seems to be overly excited are private equity and venture capital firms,” explained Brian Fox, a CPA and president and founder of Confirmation.com. “They see it as an obvious tool to request financial statements through when investing millions of dollars in a business.” Those companies also tend to be on the bleeding edge of technology, Fox said, with one user describing RIVIO as “effectively like the last mile.” With everything else automated, the executive viewed secure file sharing as the last mile in automated, collaborative tools.
RIVIO is intended to serve a range of firm sizes, from sole practitioners to large firms, with the basic service free for those users that would be, for example, conducting a few audits a year, and the ability to scale up to the business level for $499 per year, professional level for $999 per year, and enterprise level providing unlimited projects (per share) at a price available to firms upon request.
Bankers and investors “want source documents, in today’s digital world,” said Erik Asgeirsson, president and CEO of CPA.com. “They are expecting authenticated sources of data and are excited [to use RIVIO] as a primary source for financial statements, but also to use it for the IRS. Today, with the tax transcript service, you have to go out and ask for a tax transcript from the IRS, and the IRS does not follow up if there are amended returns—our system has that capability.”
RIVIO’s cloud-based platform also provides anytime, anywhere access to the financial information and a “key distinguishing piece, in a paper world,” according to Fox, of signature protection.
“The auditor has no way to protect the signature… RIVIO gives auditors the full ability control their signature, have access to the signature, and for RIVIO to contact third parties [like investors and banks] on their behalf” if financial fraud has been committed.
One question CPA.com and Confirmation.com have encountered since unveiling RIVIO is how it differs from firm portals. The platform “complements existing portals, it doesn’t compete,” Asgeirsson explained. “Firm portals have a different purpose, for firms to collaborate on work products, client audit information, back and forth, and tax information. That is not what this system is about, but financial documents and sharing them in a secure, validated fashion, with the key users.” Soon, the RIVIO Clearinghouse can be integrated into these portals.
Fox estimates about half of the more than 10 firms involved in the pilot process of RIVIO had stories of financial fraud, which, along with various other fraud cases he and Asgeirsson have explored, have proven the need for RIVIO.
“There has been continuing reinforcement for the need for this for the private company market in the U.S.,” Asgeirsson explained. “We’ve brought to light some of the fraud that has occurred due to companies putting out fraudulent financial statement documents to investors.”
