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.”

The Association of International CPAs and CPA.com announced on Wednesday that four tech companies have been named to the first class of the "Startup Accelerator" program. The finalists were announced at the Digital CPA Conference in San Francisco.

Launched this past June to help build innovation and raise awareness of new technologies in the accounting profession, the program helps finalists by awarding them seed money as well as granting access to senior leaders of the Association and CPA.com and a panel consisting of thought leaders who will advise on global trends within the accounting profession. All finalists are also invited to present more information on their companies next summer at the AICPA Engage conference in Las Vegas.

“We were impressed with both the quality and breadth of applicants for the accelerator,” said Erik Asgeirsson, president and CEO of CPA.com, per a statement. “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.”

“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,” stated Lawson Carmichael, the Association’s executive vice president for strategy, people and innovation. “Our finalists nicely balance those priorities.”

The four finalists are as follows:

• TrueUp – A Los Angeles startup that uses gamification to help companies measure the technical skills of potential job candidates and improve those of current staff members.
• RegroupTax – A La Mesa, Calif., firm that built a cloud-based program/app that creates a trial balance and workpapers for business tax prep.
• Pluma – A San Francisco company that built a professional development platform that pairs working professionals with executive coaches through messaging and video sessions available on computers and mobile devices.
• North Capital – A Salt Lake City marketplace solutions/advisory firm with a technology platform that allows broker-dealers, funding platforms and issuers to hold private online securities offerings.

For more on the program, head to the Association's site here.

The accounting profession will change beyond recognition over the next 10 years, according to American Institute of CPAs president and CEO Barry Melancon—except he really thinks it will come much more quickly than that.

“I really mean five years, but people get scared when I say that,” he said during a keynote address on “The State of the Profession” at the 2017 Digital CPA Conference, held in San Francisco by AICPA technology subsidiary CPA.com.

“In a world in which everything is changing, who are we to believe that we won’t have to change as well?” he asked. “The speed of change in our profession—and in our lives—is at an all-time high, and we need to think in a more complex way about change.”

Technology is driving much of the disruption in the profession and the wider world as well, he noted, citing the driverless car as an example of complex ramifications: While it’s easy to see how it will affect professional drivers and auto manufacturers, Melancon explained, it will also affect local governments (who rely on traffic, parking and speeding tickets for much of their revenue), law enforcement (who spend much of their time in traffic enforcement), city planners, the real estate industry, and even health care (through fewer accidents, smarter cars will significantly reduce the number of organs available for transplant).

“It isn’t about thinking about any one technology,” he concluded. “It’s about the implications of technology, and we need to be helping our clients understand and deal with these.”

All too many businesses think they’re exempt from change, Melancon said, citing surveys where more than half of business respondents think their competitors will be disrupted by technology, but that they themselves won’t be.

“We see too many people saying, ‘Yeah, but not us,’” he said—and that includes too many accountants. “We face the challenge of making sure that we continue to be successful. We have to be smarter and more passionate and more committed to change.”

As a cautionary tale of the depth of commitment required, he talked about Kodak, which failed to make the transition to digital photography. In fact, the company had made a serious commitment to changing over to digital photography, but was caught flat-footed when the change it expected to take 10 years only took two, and more nimble competitors beat it to market.

Changing services

In the accounting space, technology is already affecting every aspect of what CPAs do. “One of the Big Four firms is one of the three largest users of bot technology in the world—not just accounting, but the whole world,” Melancon said. “They apply them in tax, and get a 40 percent efficiency rate with a 98 percent accuracy rate.”

Similarly, he noted, “I’ve seen the audit of accounts receivable changed to where there are only two points of human interaction—setting the scope, and checking exceptions.”

The largest firms are driving many of the changes in audit, applying artificial intelligence and cognitive computing to automate much of the grunt work and allowing auditors to discern new patterns and focus on higher-level services. “But how do we harness that change and bring it down to the 44,000 small firms?” Melancon asked.

“Who should transform auditing? Should we own that as a profession?” he went on. “We need to imagine a different approach to auditing. We need to imagine the technology we need, and to challenge the standards-setters to keep up, and to look at our methodology for auditing.”

Among the other changes facing the profession, Melancon noted that the challenge of cybersecurity is a major concern for both public accountants and those in industry, while the growing demand for sustainability information is reshaping corporate reporting.

In tax, technology is changing client expectations and empowering competitors. “Young people will think about tax and planning differently from the way Baby Boomers do,” he said. “Young people are using algorithmic advisors instead of financial planners, so brokers and financial advisors are going to give away tax return preparation to draw the young people in.”

“Tax practices that focus on simpler returns are at significant risk, when you combine technology, our competitors, and the new tax act,” he warned.

Skill sets

One major component of adapting to significant change will be learning to develop new and relevant skill sets, Melancon said, citing a World Economic Forum report that suggested that in five years’ time, more than a third of the skills currently considered important today will no longer be relevant.

“I worry about the entry-level people in our profession” who will have to develop new and different talents, he said, “but I worry more about the skills of people in the middle of their careers.” They may find it difficult to adapt to new demands—and that will cause problems for firms, he pointed out, mentioning a survey that found two-thirds of auditing firms reported difficulties finding job candidates with the needed skills in technology, communications, critical thinking and judgement.

“We need to learn new skills, but we also need to unlearn old ways of thinking,” he continued. Firm models will need to change, both internally—in terms of the ratio of entry-level to more experienced staff, for instance—and externally, in terms of how firms manage their relationships with clients. As an example, he said that he has seen more firms experimenting with subscription-based relationships, where for a flat monthly fee, the outside accountant takes care of all of a client’s accounting needs.

Despite his many warnings, Melancon remains optimistic about the future, and CPAs’ prospects in it.

“These are extraordinary times for our profession, with extraordinary opportunities,” he said. “The opportunities in a complex world for new types of attest, audit and tax work are significant. We are so well-positioned for the future—but we need to have the willingness to think differently, to be bold, and to have tolerance for occasional failure.”

Companies Will Also Collaborate on Broader Audit Solution

SAN FRANCISCO (Dec. 4, 2017) – CPA.com, the technology subsidiary of the American Institute of CPAs, and CaseWare, a global provider of audit and analytic software, today announced they have teamed up to create a new solution for CPAs that will make preparation, compilation and review engagements more dynamic, intelligent and efficient.

The cloud-based solution, called OnPoint, eliminates repetitive tasks and integrates information from AICPA technical guides, giving practitioners a powerful, all-in-one tool for serving clients.

“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 Erik Asgeirsson, president and CEO of CPA.com. “Today we’re announcing a solution 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.”

OnPoint features include:

• Intelligent checklists to guide practitioners step-by-step through the engagement process, starting with customizable engagement letters
• Seamless collaboration between the firm and clients, with the ability to share files more securely than through email attachments
• Delivery over the CaseWare Cloud platform, which allows anywhere, anytime access with bank-grade encryption and other security features
• Integration with the latest AICPA technical guides
• Financial statement data and footnotes that can be updated with one click
• Dedicated on-boarding support for firms through CPA.com

“The marketplace is moving toward automated services faster than most practitioners recognize,” said Dwight Wainman, CEO of CaseWare. “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.”

As a cloud-based solution, OnPoint permits timely updates as technical issues change.

“Quality of service is a defining characteristic of the CPA profession, which is why the AICPA launched the Enhancing Audit Quality initiative and is collaborating on solutions such as OnPoint,” said Susan Coffey, CPA, CGMA, executive vice president of public practice for the Association of International Certified Professional Accountants. “Having the relevant technical information on hand while managing engagements is critical to providing the consistency and quality the profession requires in the preparation, compilation and review service lines.”

The collaboration between CPA.com and CaseWare was announced at the Digital CPA Conference, a leading event for driving technology adoption and practice management improvement within the accounting profession. More details about OnPoint will be available in early 2018. As part of their work together, the two companies are developing a broader audit solution for CPA firms.

Firms interested in more information about OnPoint can send inquiries to onpoint@hq.cpa.com.

About CaseWare

CaseWare International Inc. is the leading global provider of cloud enabled audit, financial reporting and data analytics solutions. With efficiency, quality and value in mind, CaseWare provides cutting-edge technology to accounting firms, businesses and government entities. Over 400,000 users, in 130 countries and in 16 languages, use CaseWare solutions.

About CPA.com

CPA.com offers a growing list of products and services for practice management, client advisory services and professional development. The company has established itself as a thought leader on cloud technology and has been a driving force around the reemergence of virtual CFO/controller services by firms. In addition, CPA.com – in partnership with Confirmation.com – has developed the RIVIO Clearinghouse, an online financial document clearinghouse that enables private businesses to exchange key financial information with lenders and investors. CPA.com is a subsidiary of the American Institute of CPAs, the world’s largest member body representing the accounting profession. For more information, visit CPA.com.

About the American Institute of CPAs

The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 418,000 members in 143 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.

The AICPA maintains offices in New York, Washington, DC, Durham, NC, and Ewing, NJ.

Media representatives are invited to visit the AICPA Press Center at www.aicpa.org/press.

About the Association of International Certified Professional Accountants

The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 650,000 members and students in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.