Several industry publications have been releasing articles regarding technology and how it will soon alter the world of accounting and auditing. Artificial intelligence and robotics are believed to soon streamline and improve the daily functions of accountants, and improve the consistency in data and analytics.
So how will this affect us professionals? How can we implicate these changes and manage the timing? It’s important for us to explore what challenges the current environment poses against these changes, and how we can evolve along with this technological innovation in our industries. Take a look at the 3 Ways for Accountants and Auditors to Prepare for Technological Innovation below!
1. A Change in the Role of the SEC and the PCAOB
At last year’s annual meeting, the Public Company Oversight Board (PCAOB) discussed technology and concluded that the use of innovative technological tools will soon transform the auditing profession. Following this meeting, the PCAOB released a five-year plan to incorporate technological advances, such as artificial intelligence, which can potentially create a system to compile and transfer client data automatically – typically performed by a junior auditor. Another strategic idea was using drones for inventory observations and automated confirmations from third parties, which has already taken shape this past year. One of the goals of the PCAOB’s plan is to anticipate and respond to the changing environment, including emerging technologies and related risks and opportunities. I believe this is something us professionals must consider when assessing systems and understand that the impact this will have on PCAOB inspections.
2. Initiating Change from Board Level – Downwards
With the fast-pace of technology and the instant customer-demand, it’s easy for companies to lose sight of the high risk of cyber-attacks. Even the SEC and PCAOB have taken a deeper interest in monitoring cybersecurity protocols. Because of this threat, the board of directors within all organizations must be focused on technological advances, and either gain technological expertise or include new technology experts/committees within these boards. They must also enforce the SEC and PCAOB cybersecurity protocol, and encourage their management team to leverage them as well. Based on a review of qualifications of independent directors in 2016, technology ranked seventh on a list of skills most frequently noted. The bottom line is – in order for boards to support the regulators at the PCAOB and SEC, they will need to take these challenges seriously and stay up-to-date on technological innovation.
3. Practical Considerations for Accounting Professionals
Utilizing technology is nothing new to accountants and auditors who have practiced within the last 15 years. Technologies have been progressively emerging, making the audit process more streamlined and often easier. In order for these industries to continue benefitting from these innovations, there has to be consistency in auditing techniques and client data. Without this consistency, artificial intelligence and robotics will not be effective. Cloud platforms, such as Enterprise Resource Planning (ERP) systems, can increase data consistency, while decreasing the need for repetitive controls and the threat of cyberattacks. Although these cloud platforms have only recently began to take shape in the accounting and finance space, it’s important to become familiar with them and learn how they will impact your career before they arrive.
Do you have any other suggestions on how to prepare for technological innovations in accounting and auditing? Leave a comment below!