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.”

CPA.com, the technology subsidiary of the American Institute of CPAs, and audit software vendor CaseWare International have announced a cloud-based solution for preparation, compilation and review engagements.

Called OnPoint, the solution will be available in early 2018, and incorporates checklists, information from AICPA technical guides and more to make these engagements more efficient, and to increase collaboration between accountants and their clients.

Features include: intelligent checklists that guide practitioners step by step through the engagement process; the ability to securely share files between accountants and clients; integration with AICPA technical guides; the ability to update financial statement data and footnotes with a single click; and dedicated on-boarding support for firms through CPA.com.

“Technology is reshaping the accounting practice, and the next big area to be transformed by automation, artificial intelligence and other innovation is audit and attest services,” said CPA.com president and CEO Erik Asgeirsson, in a statement. “OnPoint is geared toward the more than 20,000 firms that provide preparation, compilation and review services. This solution, which uses dynamic checklists to structure and manage engagements, will help CPA firms deliver the highest level of service to clients.”

“The marketplace is moving toward automated services faster than most practitioners recognize,” said CaseWare CEO Dwight Wainman in a statement. “OnPoint offers all the advantages of an intelligent solution, but also has the added benefit of integrating with the AICPA’s highly regarded technical guides. That’s difficult to match.”

The companies also announced that they are working on a broader audit solution.

For more information on OnPoint, e-mail onpoint@hq.cpa.com.

Not only are more CPAs talking about ‘how’ rather than ‘why’ when discussing technology adoption for them and their clients, but now the idea of disruption is being brought up again in a big way; replacing discussions solely about ‘change.’

This was the general consensus after a full day of sessions, keynotes and chatting with CPAs at the Digital CPA conference hosted by CPA.com and the AICPA. The conference, now in its sixth year, was full of thought leaders in the profession and, predominantly, members of mid to large-sized firms with some smaller practitioners mixed in.

The idea is to learn more about the impact of various technologies and related trends on CPAs and their clients and again, clearly, this year was all about handling the massive disruption occurring once more in the profession. The term reared its head back several years ago when thought leaders warned of the potential impact cloud would have on the profession.

Those discussions then turned to the massive ‘change’ that CPAs had to contend with, supported by taking more advantage of client accounting, collaboration and ultimately taking steps to be more of an advisor. While this is still prevalent, the profession is now preparing to be disrupted by the likes of blockchain, machine learning and the growing generation of Millennial accountants, coupled with the aging out of the Baby Boomers.

To start with, in order to face the next wave of impending disruption, CPAs are being asked to take a more entrepreneurial approach to their practices. In essence, they are being urged to be the disruptors rather than having it happen to them. Such was the tone from the opening keynote speaker Marc Randolph, co-founder of Netflix.

So what does running a multi-million dollar online streaming movie service have to do with accounting and disruption? According to Randolph, it was how the company started in the first place.

“To generate ideas...look for pain, learn how to ask what's wrong in the things you do every day,” he said. “Good ideas don't always come out of nowhere. Before we came up with the idea for Netflix, it was in a big stack of bad ideas. When it comes to disruption, the rate of success is directly proportionate to the ideas you can afford to try.”

To drive the point home further, Randolph was on a panel with accounting application entrepreneurs Rene Lacerte and David Barrett. For those unaware Lacerte is the founder of Bill.com, while Barrett founded Expensify.

“Good ideas and bad ideas will initially look the same, the only way to tell them apart is the rear view mirror” said Barrett. “When I came up with Expensify I had to think of the most boring thing you could do, which was easier expense reports.”

And to the firms, particularly smaller ones, Barrett advised to be a better leader and not to fear failure.

“One key point of being a good leader is not freaking out if you don't have the answers...have a tolerance of failure.”

With regard to artificial intelligence disrupting the profession, Leon Katsnelson, a director and Chief Technology Officer at IBM, said for the most part CPAs should not fear replacement but definitely be aware of how AI will impact their work.

“When you think about AI, the human element is still absolutely vital, the auditor's job will not be entirely replaced and human thinking will still be critical,” said Katsnelson. “AI will impact every aspect of accounting, not just audit and not just expenses.”

During his opening keynote address, AICPA president Barry Melancon gave attending CPAs more confidence that they can and will weather the impending disruption to the profession, making no mistake that it is already happening.

“You may be wondering, how do you change in a successful and profitable firm and still make the right decisions at the right time,” said Melancon. “We face the challenge of making sure we're successful and finding the right things to do for the future. We do have something to lose but can't be less willing to change.”

He also went so far as to say the profession may not recognize itself in as few as five years, based on numerous factors including the aging out of Boomers, use of technology from cloud to AI and blockchain, and firm structure.

“With technology, the basic structure of CPA firms will change; different pricing and business models will happen,” said Melancon. “The most likely scenario to occur in the CPA space will be a narrower base and small ownership structure at the top.”

The AICPA and CPA.com are, of course, taking an active role in guiding CPAs through this disruptive period, again stressing how virtual CFO-type services will offer them a key advantage.

“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,” said CPA.com CEO Erik Asgeirsson. 

Specifically, CPA.com plans to:

• Set up roundtable groups of client accounting practitioners, keyed to firm size, to provide a support network and a means to exchange best practices
• Create advocacy materials for CPAs looking to get internal buy-in for their teams to build or expand client accounting services practices
• Design a comprehensive benchmarking survey, in collaboration with the AICPA’s practice management section, to set metrics for client accounting services pricing and best practices

Asgeirsson also outlined several broad initiatives already underway. These include:

• A collaboration between CPA.com, the AICPA and CaseWare, a global provider of audit and analytic software, to create a broad, automated audit solution. One piece of this collaboration – the creation of a dynamic preparation, compilation and review solution – was announced earlier this week at Digital CPA.
• Expanded uses for the RIVIO Clearinghouse, a secure hub for private company financial information jointly developed by CPA.com and Confirmation.com, such as the managed distribution of reports from System of Organization Control (SOC) engagements. Asgeirsson noted that there is growing interest in RIVIO within the credit union industry, and within the Top 20 accounting firms.
• Taking a leading role in defining the impact of blockchain on the profession through a collaboration with the AICPA and Wall Street Blockchain Alliance.
• Offering insight into emerging technology trends through CPA.com’s sponsorship of 1.) an annual executive roundtable for accounting technology CEOs, and 2.) formation of a startup accelerator with the Association of International Certified Professional Accountants.

Four entrepreneurial companies have been chosen as the initial class of a startup accelerator sponsored by the Association of International Certified Professional Accountants (the Association) and CPA.com.

The startup accelerator was launched this past June to help jumpstart innovation in the accounting profession and provide insight into disruptive technologies and automation trends for CPAs and Chartered Global Management Accountants (CGMAs). The finalists get a modest amount of seed money and gain access to senior leaders of the Association and CPA.com, as well as to an advisory panel of leading practitioners and thought leaders who collectively will provide expertise about global trends and marketplace needs within the accounting profession.

“We were impressed with both the quality and breadth of applicants for the accelerator,” said Erik Asgeirsson, president and CEO of CPA.com, the technology subsidiary of the American Institute of CPAs. “The Association and CPA.com are committed to keeping the accounting profession in the forefront of technology, and we look forward to working closely with these promising startups over the next year.”

The four finalists are:

• TrueUp – The Los Angeles startup uses gamification to help companies assess the technical skills of job candidates and improve those of current employees
• RegroupTax – A La Mesa, Calif., firm that built a cloud-based program and app that creates a trial balance and workpapers for business tax preparation
• Pluma – A San Francisco company that offers a professional development platform pairing working professionals with experienced executive coaches through in-app messaging and video sessions, accessible by computer or mobile device
• North Capital – A Salt Lake City marketplace solutions and advisory firm whose technology platform allows broker-dealers, funding platforms, and issuers to conduct online private securities offerings

Each finalist will be given the opportunity to present information about their company next summer at AICPA ENGAGE, one of the leading events devoted to public accounting in the United States.

“At the start of this process, we identified two key areas of focus for applicants: 1) technology and financial information and 2) professional competency innovation,” said Lawson Carmichael, the Association’s executive vice president for strategy, people and innovation. “Our finalists nicely balance those priorities.”

The finalists were announced at the Digital CPA Conference, one of the leading U.S. events on technology adoption and practice management improvement for CPA firms.

For more information about the startup accelerator, please visit aicpaglobal.com/accelerator.

Technology is rapidly transforming the practice of accounting, and there has never been a better opportunity for CPA firms to grow and thrive, the chief executive of CPA.com said in a keynote speech at the 2017 Digital CPA Conference.

The rise of autonomous business, marked by the continuing automation of accounting and finance functions, has hastened the shift of CPA firms into advisory services, said Erik Asgeirsson, president and CEO of CPA.com, the technology subsidiary of the American Institute of CPAs. That pace will only quicken as artificial intelligence, machine learning, blockchain and the ongoing evolution of data analytics become more common in everyday business transactions.

“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.  

CPA.com’s ongoing research has identified talent, pricing and the ability to identify prospective clients as three continuing challenges facing virtual CFO practices. To help firms address these, the company plans to:

• Set up roundtable groups of client accounting practitioners, keyed to firm size, to provide a support network and a means to exchange best practices
• Create advocacy materials for CPAs looking to get internal buy-in for their teams to build or expand client accounting services practices
• Design a comprehensive benchmarking survey, in collaboration with the AICPA’s practice management section, to set metrics for client accounting services pricing and best practices

Asgeirsson also outlined several broad initiatives already underway to support the rapid evolution of the profession. These include:

• A collaboration between CPA.com, the AICPA and CaseWare, a global provider of audit and analytic software, to create a broad, automated audit solution. One piece of this collaboration – the creation of a dynamic preparation, compilation and review solution – was announced earlier this week at Digital CPA.
• Expanded uses for the RIVIO Clearinghouse, a secure hub for private company financial information jointly developed by CPA.com and Confirmation.com, such as the managed distribution of reports from System of Organization Control (SOC) engagements. Asgeirsson noted that there is growing interest in RIVIO within the credit union industry, and within the Top 20 accounting firms.
• Taking a leading role in defining the impact of blockchain on the profession through a collaboration with the AICPA and Wall Street Blockchain Alliance.
• Offering insight into emerging technology trends through CPA.com’s sponsorship of 1) an annual executive roundtable for accounting technology CEOs, and 2) formation of a startup acceleratorwith the Association of International Certified Professional Accountants. Four companies that represent the initial class of the accelerator were announced at the conference today.

“At CPA.com, we’re moving forward on several fronts to help CPA firms succeed: thought leadership, the development of key tools and solutions, and collaborations to define and advance emerging technologies and practice management improvements,” Asgeirsson said. “We’re excited about the future.”