In previewing the future of the accounting profession, the word “scary” was used more than a few times by Jon Baron, president, professional, tax & accounting at Thomson Reuters, in his keynote address on technology trends to attendees of the California Accounting Show and Business Show and Conference June 7.
The largest area of concern was in the realm of cybersecurity, with Baron sharing the latest sobering statistics and his perspective as a participant in the Security Summit convened by Internal Revenue Service commissioner John Koskinen.
The IRS estimates three to five firms a day are being hacked, Baron said, and “there’s not the awareness out there just yet.”
Overall, in 2016, companies and individuals were the victims of more than 90 million attacks and nearly 70 percent will go unnoticed. Baron warned that these staggering numbers are not just limited to consumers, but in fact “bad actors” are now going after professional services firms. Additionally, malware and phishing methods are getting more sophisticated.
Baron presented a high-level overview of some steps firms can take to protect against these threats, including:
- IT security plans and implementation
- Anti-virus, malware, browser and remote access software
- Multi-factor authentication
- Insuring data (ransomware)
The other big threat firms face beyond data breaches, Baron explained, is irrelevance. A BBC study evaluating different occupations and the likelihood of their tasks being automated found that accountants stood a 95 percent chance of automation.
“This is a little bit scary, or more than a little bit scary,” Baron told the audience, before offering some solace, courtesy of analysis from the latest World Economic Forum in Davos in January.
“[We need to] modify our thinking, and look at machine learning, robots, to supplement our work, so we add value and do less gruntwork. Don’t feel real bad about this, though there’s no question it will change how we operate in the future.”
Accountants’ new role, then, is to simplify and transform knowledge work using these new tools like cognitive computing, artificial intelligence and blockchain.
Blockchain will be especially critical in the future of auditing, Baron explained, echoing a projection that was repeated throughout the two-day conference, especially during the annual “Technology Futures” keynote from Rick Richarson, CEO and founder of Richardson Media & Technologies.
“Blockchain will be the biggest disruptor in the next 10 years,” Richardson said in his presentation to kick off the conference June 6, explaining that traceable audit trails, automated audit process and authentication will create “a new paradigm. Instead of separate, privately managed databases, [data] is recorded simultaneously in a shared ledger. Every transaction is recorded and financial records are guaranteed. Blockchain will reduce or eliminate the need for auditing resources and personnel will need to be blockchain experts.”
Both Richardson and Baron quoted a Thomson Reuters U.K. study in which only 4 percent of respondents selected blockchain as a disruptor with great impact 25 years from now. Richardson, half-jokingly, speculated that those 4 percent must also be the ones who actually understand the technology.
As Baron explained, blockchain started with bitcoin, which used the coding for cryptographic currency, but is now used for file storage, identity management, copyright management, and many other applications, including audits.
Baron and Richardson expect blockchain, along with machine learning and AI, to follow the adoption trends of the technology that came before it—which means, when it comes to accounting firms, a slow but steady curve.
Baron shared a Thomson Reuters Ultra Tax CS survey comparing dominant methods of providing returns to clients in 2017 versus 2010. This year, 11 percent used personal client portals, compared to 5 percent in 2010; 23 percent used electronic (non-portal) methods, compared to 7 percent; and 66 percent were still using paper, though down from 88 percent in 2010.
“The profession has evolved over the last 15 years—you’re doing things much different,” Baron said. “It will evolve much further and faster in the next 15 years. Opportunities abound.”
Some of these of these opportunities have existed for years. As the survey also found, 14 percent of firms use cloud technology for tax and accounting, 39 percent use portals for any clients, 66 percent use document management software, and 63 percent have a website. Regarding that last statistic, “sometimes I have to pinch myself to remind myself what year this is,” Baron shared. “[Customers] are used to going to websites, it’s the way they operate. The impression they have, reaching out and not finding you have a website—it’s not positive.”
Likewise, “as a profession, we should be well past the cloud, social and mobile,” Baron said. “Am I going to be disrupted, or am I going to take advantage of the opportunity?”
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