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Future of the Accounting Profession

8 minute read

There are only two guarantees in life, death and taxes. Well, we would like to add a third guarantee: change. The rise of technology in the business world has become a key factor in how accounting has changed over the years. In fact, many companies have entire departments dedicated to preventing disruption. In accounting, technology advancements have proven to not only impact the systems and software that are being used, but also the skill sets and knowledge that a practicing CPA must possess.

The Future of the CPA Profession

In today’s day in age, data is king. While the natural stereotype for an accountant is “bean counter” or “number cruncher”, the future of the CPA profession looks to be advancing into an analyst and interpreter of complex data sets. The CPA exam is certainly considered one of the hardest professional exams there is, and for good reason. CPAs are no longer relied upon for simple data entry and less and less for bookkeeping services. Instead, they are being asked to interpret client information, think critically, and provide a consultation based on their expertise. Technology likely won’t be replacing CPAs nearly as much as it will enhance and support their ability to provide valuable business insights for their clients.

Trends in Accounting

Recent trends in accounting point to an emphasis in technology and advanced software designed to report critical information effectively and efficiently. That being said, there becomes a necessity for CPAs and other accounting professionals to focus their professional development and continuing education around the increased emphasis on technology. Technological enhancements in the accounting profession are nothing novel. For the last five years, there has been additional emphasis on including accounting technology in the syllabus for college accounting programs. The Uniform CPA Examination is also making big changes to include the impacts of technology within the contents of the professional accounting exam. The “CPA Exam Evolution” will go into effect as of January 1, 2024. The idea is that new CPAs entering the profession will need to learn the skill sets to be effective in their new roles.

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New Technology in Accounting

Over the last few years, there was much talk about new technology in accounting as a replacement to the professionals themselves. The thought was that they would have less opportunity to use their expertise to think critically and navigate their way through complex scenarios, but that narrative has since changed. The utilization of cloud computing and blockchain technology is now being implemented by accounting firms and corporations to streamline their accounting and finance functions. Some of the accounting trends that we are impacting accounting professionals today consist of:

Blockchain Technology

Throughout history, accounting has had a rather basic general ledger system by simply matching debits with their associated credits for a given transaction. This archaic system for recording journal entries comes with a huge lack of transparency, not to mention an increased risk of error or fraud. The use of blockchain technology is bridging that gap by essentially becoming the middleman for recording journal entries. A shared ledger will exist between the two companies in that same transaction, enabling both parties to see how the transaction was recorded, respectively. This will also provide accountants and regulators access to information in real-time, which enables them to use their expertise and respond accordingly.

Cloud Computing

Cloud computing is a big buzzword in the business world, and it's starting to make its way into the accounting profession. More and more CPAs are using cloud-based accounting software to do their work. And it's not just individual CPAs; major accounting firms are also using cloud-based software to streamline their operations.

Cloud computing will affect the accounting profession in five core ways:

  • Fewer physical documents will be used as everything transitions to a digital format.
  • The use of blockchain in accounting will become more prevalent as it offers a secure way to store and track data.
  • CPAs will need to be comfortable working with cloud-based accounting software and systems.
  • There will be an increased demand for forensic accounting services as businesses look to prevent fraud and embezzlement.
  • International clients will become more common as businesses expand their reach globally.

Virtual and Augmented Reality Technologies

Are virtual and augmented reality technologies really being adopted by accounting firms? In today’s remote world, technology is paramount to how organizations will operate. The Covid-19 pandemic is a great reflection of just that. Accounting industries are beginning to implement virtual and augmented reality in a variety of situations, especially for training purposes. Larger firms that have an enormous number of new hires every year will be utilizing virtual reality instead of the old fashioned “learning on the job” way. Virtual and augmented reality technologies are just another advancement that will continue to change accounting in the future.

More Automation in Tax Software

Tax penalties can be costly to both individuals and corporations. This is something that accountants want to avoid for their clients at all costs. Improved tax softwares are reducing the likelihood of error while also enhancing the efficiency and effectiveness of audits. Tax softwares including cloud-based tax preparation applications as well as more advanced tax planning software. For example, Corvee Tax Planning software automatically scans your client’s tax return, and identifies tax saving strategies that may be applicable to your client. This takes much of the burden off of the accountant, while still allowing the accountant to be the trusted advisor the client needs.

Bottom Line

There is no denying that the rise of technology is a disruptor to industries worldwide. The accounting profession isn’t going anywhere, in fact, understanding how to best utilize technology can be a great asset to accounting professionals today. The task-oriented gig that accounting used to be is getting replaced by new and improved accounting software programs. Just like developers and marketers are entering more and more of a consultant type role as technological tools evolve, so will the role of the accountant. This will require a further use of professional judgement and the ability to interpret information and make decisions based on their basis for that opinion.

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