You've probably heard the chatter. Technology is poised to transform the accounting profession. Artificial intelligence, robotics, and blockchain are on the verge of automating many traditional core CPA tasks. The profession is at a critical moment, one from which it will emerge in a far different form.
What will that form look like? When will these changes take place? And what should CPAs be doing now to prepare? Those are among the questions addressed during the JofA's sixth annual technology roundtable, and the answers provided by our panel of accounting technology experts paint the picture of a profession that does not need to be in panic mode but does need to be learning about and preparing for a tidal wave of technologies likely to reshape the accounting landscape over the next decade.
The JofA interviewed the experts in a February conference call. Short profiles of the panelists—David Cieslak, J. Carlton Collins, and Lisa Traina—are on page 25. The JofA is publishing an edited transcript of the conversation in two parts. The first, which covered topics including cloud adoption, multifactor authentication, and single sign-on, appeared in the June JofA ("The Single Factor of Most Concern in the Cloud," page 52). The second part follows:
Are there any technology trends CPAs don't know about but should?
Collins: Robotics, drone deliveries, driverless cars and trucks, and virtual reality are all things that are coming down the pike, and where relevant, you need to be considering them now. There are new artificial intelligence solutions that are doing a great job, too.
When Uber hit the scene, it quickly became one of the largest transportation systems in the world, seriously challenging the traditional transportation players. This example makes me realize that some companies are just an app away from either breaking out or going belly up, [depending on] whether you get the app or whether your competitor gets it. It's kind of interesting when you consider that both embracing or ignoring technology could lead you to an early retirement, but for different reasons. Either you retire because your company hit it big, or you retire because you went bust.
Traina: Artificial intelligence innovations are going to continue to drive the future, and we are going to see driverless cars, fleets of them, not too far away; robotics and all those things with artificial intelligence, I think, will be here before we know it. Now is it going to be next year and we're going to see broad-scale driverless cars? I don't know, but many say within five years certainly. So take your Uber example. All those people now driving for Uber might not be driving because Uber will be using automated fleets. The predictions of the jobs that can be lost in certain sectors is really amazing, and CPAs need to recognize artificial intelligence can impact them as well.
Cieslak: Bill Gates had a quote years ago that said we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. So I always love to be forward-looking, but I also like to be realistic about when we think that this technology will start to impact us directly. We want to be aware of it so we are ready for it, but we also want to be truly ready to incorporate it into what we do and how we do it in the right time frame.
A simple example of technology that every firm should be using is videoconferencing. In our firm, routine calls are done with cameras turned on so we can sit with each other face-to-face throughout the day (when people are working from different locations). I think there's a lot of value in not just hearing someone's voice, but to get the nonverbal communication, too, whether it's with Zoom, Skype, GoToMeeting, WebEx. Amazon [recently came out] with a new product called Chime. All of these services support a video component, and I highly recommend that folks make video a part of their day-to-day communication strategy.
Collins: A technology I don't think CPAs use enough is survey software, like SurveyMonkey or Zoho. It's a great way to stay in touch with your existing clients, and you can pursue potential clients as well. Maybe you'll also ferret out some information that might help improve your company.
Drillable financial statements (financials with numbers that can be double-clicked to reveal the supporting data) are another great technology.
I don't see businesses using this technology as much as they could. The key benefit is it makes it easy for a CPA to dive deep into the information and answer their own questions about underlying data. Cash flow forecasting is a great method for predicting where cash balances are likely to be three months, six months, or 12 months down the road, and many of today's cash flow forecasting tools can be used to quickly produce this report. CRM (customer relationship management) tools should also be used more, to help companies/CPAs maintain the proper contact with their clients, and maybe to maintain periodic contact with prospects as well.
What is your view of blockchain technology and its potential impact, especially on the accounting profession?
Collins: Blockchain technology is really referring to the use of the public ledger where anybody and everybody can view the transactions, resulting in true transparency. Theoretically, this type of technology could be very useful in a lot of areas. But I liken this blockchain technology to the more elegant and simplistic XML technology (and even the XBRL technology that was developed a couple of decades ago).
There was much promise in those technologies, and many people believed at the time that XML would transform accounting, and it did just that for the SEC reporting companies. Still, I think these technologies have been very underutilized. I would have thought by now that XML technology would provide the reporting basis for all of our accounting systems to help us really grab our data by the tail, but it just hasn't evolved that way. I don't see blockchain as exciting as XML was 20 years ago; therefore, I think the blockchain technology for accounting may just be a flash in the pan, though I would like to see it take off.
Cieslak: Many organizations have already gone through one dramatic shift from on-premises solutions to the cloud. Blockchain represents an even more dramatic shift—a whole new way of processing virtually any type of transaction, on a distributed, shared, immutable ledger. Blockchain offers an enormous opportunity to significantly alter many facets of what we do and how we do it, whether it's Wall Street or the banking sector, the Big Four, across industries and disciplines. I think there's a lot of evaluation and blue-sky thinking going on, and I'm really excited to see what that's going to look like as it shows up. I specifically think private blockchain implementations will surface first, in and around certain use cases—think high-value transactions. Then, once we get past the proof-of-concept stage, we'll see some trendsetters, companies we don't even know about today, coming up with some killer app, some killer approach, something imaginative and transformative.
Carlton used the example earlier of Uber. You roll this conversation back 10 years, and Uber didn't exist. We wouldn't have thought to have imagined that, but today we all know what it is. I think somebody is going to do the exact same thing in the context of blockchain more at a transactional level, and that's when we're going to start to see a public deployment of blockchain start to become much more commonplace. It's going to be a process, and going back to that quote I said earlier, you don't want to overestimate it in two years, underestimate it in 10. It's coming, it's going to be phenomenal, and I do believe it will reach very far and very deep into what we do and how we do it. I for one am very excited to see how that's going to take place.
Traina: [AICPA CEO] Barry Melancon may have had the same Bill Gates quote in mind when he recently said we won't recognize the vast majority of firms in five to 10 years. He was speaking about blockchain as part of the conversation. I don't know when it's coming, but I do believe blockchain is coming, and because CPAs work in such a world of recordkeeping and verifying and reconciling and transactions, the accounting profession is a prime place for a major impact. I would say maybe the audit side of the profession could see a big impact once the technology is implemented, but there's not a whole lot you can do right now until you start to see implementation other than be aware.
Cieslak: CPAs need to be looking for ways they can bring value because the reality is, at the low end, much of what CPAs have historically done is being commoditized. One of the things I do each year is I speak on technology trends, and one of the pieces I have in this year's presentation is called the "Rise of the Robots." These are not necessarily the physical robots that are out on a manufacturing line assembling the latest and greatest device, but instead algorithms and software that are going to help make the mundane very routine and effortless. When we talk about robotics, it's not just physical. It's also in and around process, in and around everything from writing an article to automatically handling entries on ledgers. There are so many ways that technology is transforming the landscape that we're all navigating together so that's where I think all of us need to be asking, "Where's the value opportunity in that for us?"
What is your favorite new technology that our readers may or may not have heard of?
Traina: I have my Amazon Echo with Alexa and also actually have a Google Home, and it's been fun to be able to play music and ask questions that would have normally sent me over to grab my phone or my iPad to Google something quickly. The shopping list is nice.
Collins: I love my Echo. I call it the iPad killer because everything I did with my iPad before I no longer do. I just use my Echo instead. But the technology that intrigued me recently is from an MIT spinoff company in India called Graviky Labs, which is working on a solution that turns vehicle exhaust into ink. You simply attach the device, called a Kaalink, to your automobile exhaust pipe and then it filters and captures the unburned carbon emitted from your incomplete engine combustion and turns it into ink. Thus far, Graviky Labs says its tests show that the device can capture up to 93% of the emitted pollution, and that it takes about 45 minutes of exhaust filtering to produce an ounce of ink, or at least that's the estimate based on the exhaust produced by the average automobile in India.
Cieslak: I love my Echo as well. Many of the vendors at the Consumer Electronics Show this year were touting that their product integrates or was compatible with the Amazon Echo. One of the smart skills I just taught it is to queue up my Starbucks order. I may say, "Hey, Alexa, tell Starbucks to prepare my favorite order." Sure enough, when I jump in my car and head to Starbucks, my coffee's waiting for me. It can leave you frustrated at times; my wife says sometimes that the Echo is stupid. I think it's just because we're really pushing the envelope, and I know the designers of the Echo wanted to provide almost a real-time response to any question. So just understand we're pioneers when it comes to these smart assistants, whether it's the Amazon Echo, the Google Home. Lenovo is coming out with a smart home device that is going to be compatible with the Echo. But it's worth checking out and understanding how voice, integrating voice, is going to continue to change how we interact with technology. I think for anyone who has worked with Siri or Cortana on their smart mobile devices, think of the smart assistants with Alexa, Google Home as bringing that into the office space, bringing that into the home. The great majority of users have their unit housed in the kitchen. I think it's fun and a great intro into how hands-free computing is going to continue to evolve.
The other technology that I'll mention is 5G. It's not just kind of a little bit faster than 4G. It is absolutely transformative in terms of speed, making communication between any device—for example, out to the cloud and back again—virtually real time. We're excited to see some of the latest smart mobile devices, internet of things devices be connected to the cloud via 5G for that all-but-instant kind of responsiveness. So 5G is absolutely going to be a technology to adopt as it becomes available.
Is there one last thing you would like to say to CPAs reading this article?
Cieslak: Look for opportunities to leverage the latest technology, to think smarter, work smarter, but have fun, too. There's a lot of neat stuff, and it can be a real pleasure to work with some of the new technology that's out there.
Traina: Embrace the Millennials. The Millennial generation has got a lot to offer in that they just know how to use technology and they pick it up and they are able to learn things on their own. If they find themselves doing something kind of monotonous or they feel like it's not relevant, they will ask why rather than just repeating a process. I think it would be great if people would ask some of these younger workers what they are doing in their jobs that they just don't think is relevant or maybe could be done in another way. I think you'd get some surprising answers and solutions, like "What if we use this app or this product?" So my parting advice is to embrace that Millennial generation.
Collins: I like what Lisa said, and I would even go a little further and say don't just ask Millennials how they can do their jobs better, ask everybody and study that feedback. But my parting advice is, don't just use your technology, master it.
David Cieslak, CPA/CITP, CGMA, principal and founder of Arxis Technology and a popular technology speaker known as Inspector Gadget.
J. Carlton Collins, CPA, the CEO of ASA Research and author of the JofA's monthly Technology Q&A column.
Lisa Traina, CPA/CITP, CGMA, partner with Traina & Associates, a CapinCrouse company, which provides information systems and IT security audit and consulting services to business clients.
See "What Is Blockchain?" on page 29 for more about the potential of this "digital global ledger" to reshape recordkeeping and the business of finance itself.
About the author
Jeff Drew is a JofA senior editor. To comment on this article or to suggest an idea for another article, contact him at Jeff.Drew@aicpa-cima.com or 919-402-4056.
- "The Single Factor of Most Concern in the Cloud," JofA, June 2017
- "Rethinking the Audit," JofA, April 2017
- Reporting on an Entity's Cybersecurity Risk Management Program and Controls—Attestation Guide (#AAGCYB17P, paperback; #AAGCYB17E, ebook)
- Digital CPA Conference, Dec. 4—6, San Francisco
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