- Jeff Harden
- Director, Assurance & Business Advisory Services
- (614) 947-5299
As we have all experienced throughout our lifetimes, the pace of technological advancement is swift with far reaching implications to our behaviors, lifestyle and economic decisions. The business environment is no different as advancements such as robotics, electronic data interfaces and advanced computing have significantly impacted numerous industries. As market dynamics change and evolve, there will be winners and losers, as history has proven.
Within accounting, one can argue that the profession has not experienced material change since the advent of personal computers and online connectivity during the 1990s. As it currently stands, public accounting is substantially comprised by an aggregation of various manual-based processes. In a broader context, accounting generally remains a highly manual process for many organizations, encompassing data entry, consolidation and ad hoc investigation, among others.
Widely reported within the media, technological advancements such as artificial intelligence and machine learning are no longer a creation of Hollywood science fiction; these technologies exist today and are becoming more precise with an estimated $5 billion in 2016 venture startup investing alone and expected to increase (Fortune, February 2017). PwC further estimates that artificial intelligence could contribute up to $15.7 trillion to the global economy in 2030 from which $6.6 trillion is likely to come from increased productivity. This “fourth industrial revolution” is set to disrupt several industries, with the accounting profession frequently cited as most susceptible to change. As Mark Cuban is famously quoted during the March 2017 South by Southwest festival, “I would not want to be a CPA right now. I would not want to be an accountant right now.”
While not sharing Mr. Cuban’s views on the prospects of a career CPA, he is correct in that the profession is likely to look a lot different than it does today. Take the following as examples and the potential applications to our profession:
With real-time access to data supplemented by advanced analytics and machine learning, the potential implications to the profession become quite powerful. The same questions we as auditors document for all engagements (fluctuation analyses such as why did inventory increase, what is driving gross margin expansion, etc.) will become fully automated akin to asking Siri what the weather forecast is for the day.
The aforementioned are a small sampling of technologies being utilized and/or developed and will have broad implications to companies, auditors and tax advisors alike. While challenges are inevitably created through disruption, opportunities similarly arise. By addressing traditionally routine and/or manual tasks, technology will inevitably enable advanced analytics and similar capabilities to promote both effectiveness and efficiency. Whether self-driving vehicles or the “green-bar” report of the future, embracing technological advancements will help organizations both sustain and seize future opportunities.
GBQ is an entrepreneurial business who understands the challenges that business owners and management teams often face. For more information please contact a GBQ professional.
Article written by:
Jeff Harden, CPA
Assurance Senior Manager