You Ain’t Seen Nothing Yet
The next 20 years of tech advances will disrupt the profession in a big way.
ICPAS President & CEO
When you really look at it, technological advances in the accounting profession have been focused most heavily on translating the old way of doing things into seamless, elevated efficiency and productivity. We couldn’t do our jobs without Excel, for instance, but all Excel really does is computerize that old green columnar paper. And while the cloud is all the rage, it’s just another way to store and share data.
What we’ve seen over the last four decades is a technological evolution. However, we’re now on the cusp of a technological revolution. The profession, as we know it, will look dramatically different 20 years from now. One global financial institution, for example, said that while 2,000 employees around the globe are involved in the monthly close process, by the year 2020 that process will be fully automated. What’s more, one Big Four firm noted that it will be hiring half as many new staff by the year 2020 as a result of technological advances and artificial intelligence (AI). Maybe this won’t all happen by 2020, but it will happen at some point—and it will happen fast.
Compliance-related automation—whether in public accounting (audit and tax) or in corporate accounting—will shape the professional landscape moving forwards. Integrated systems and new technology within companies will allow for expanded automation.
Companies and accounting firms are already using AI and Robotic Process Automation (RPA). One Big Four firm is using Watson, IBM’s AI tool, to read 100 percent of contracts during a client engagement. As Watson “reads” through these contracts, it actually learns and can track transactions directly into the company’s general ledger.
Technology and the audit process are on a collision course. Today, audits are premised on statistical samples upon which a financial statement opinion is based. The use of RPA and AI will allow for 100-percent testing. Yes, an audit in the future may test every transaction. The AICPA’s Auditing Standards Board (ASB) will be developing standards that allow for either statistical sampling or 100-percent testing. For years there’s been talk of continuous audit, and many laughed at the thought. That day may be here sooner than you think.
So, what does this mean for the accounting and finance profession? CPAs have always positioned themselves as trusted business advisors. In the future, it will be more important than ever for CPAs to move from a compliance to an advisory role. That move will have a dramatic impact on the education and training of future CPAs. New hires will not learn the old-fashioned way of performing low-level compliance tasks. They will be expected to be advisors and analysts right from the start.
Your Illinois CPA Society is starting to plan for the year 2025. Our Board of Directors and other volunteer leaders will be meeting to look at what CPAs will be doing in eight years time, since 2025 will be here before we know it. By starting to plan now, we hope to continue helping CPAs succeed, both today and in the future.