Question

Comment on how is financial reporting regulation likely to change in the future with advancement in technologies in accounting

Answer 1

The accounting profession is rapidly transforming partially due to productivity optimization available through newer technologies. Today’s accountant is no longer burdened with task-oriented projects. Instead, thanks to the shift in dynamic accounting technology, accounting software programs are becoming more automated and the role of the accountant is changing to that of a business advisor. The role shift of the modern accountant to a business advisor requires new skill-sets, including professional skepticism, judgement, and critical thinking skills. These skills will remain a high priority to accounting firms when looking at new hires. While the profession is rapidly changing due to emerging technologies, the need for these types of soft skills remains constant.

So what top technologies are helping the shift into accounting automation and creating new roles for accountants? Here are the top ways we think technology is transforming the accounting industry:

1. Artificial Intelligence & Robotics – Artificial intelligence and robotics is automating complex and repetitive tasks and processes, with extreme accuracy, reducing operating costs and increasing efficiency . These are some of the emerging technologies supporting the transitional role of today’s accountant into a more critical thinking role. However, the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA) states in their report, Digital Darwinism: thriving in the face of technology change: Although an agent intelligent enough to replicate the human brain is not yet a reality, there are many examples that can demonstrate limited ‘intelligence’, depending on how this is defined. Intelligent behaviour can include: learning from experience, determining what is important, handling complex situations, understanding visual images, being creative or imaginative, and other characteristics.

1. Cloud Computing – Cloud computing is a type of Internet-based computing that provides shared computer processing resources and data to computers and other devices on demand. This allows accountants to perform accounting tasks from any location as well as the ability to deliver financial information and reports through the cloud. This opens up a new way for accountants to work with their clients. Now, there is more time to engage with the client and focus on business strategy instead of getting burdened with detailed processes.
   
2. Innovations in Tax Software – The tax software of today has helped improve accuracy while reducing margins of error – something businesses want to embrace in order to avoid tax penalties and prevent issues with stake holders. Better tax software also helps streamline audits by making them more efficient and effective. Raymond Cheng, Council Member of HKICPA, states that “An understanding of new accounting software and other business and financial models will be necessary if practicing accountants are to effectively conduct audits and discharge their responsibilities. Continuing professional development and education in this area will be necessary for auditors.”
   
3. Mobile Accounting – Accountants are increasingly dependent on their mobile devices to accesses data. Mobile connectivity also bridges accountants and their clients. Companies like Xero are helping to launch the mobile age of accounting. Their mobile apps help accounting firms manage their business while on-the-move. Firms can reconcile, send invoices, add receipts and create expense claims from smartphones or tablets. Bill Price writes in Accounting Today that, “Mobile accounting could mean different things to different people and businesses, so the first step in a successful rollout is defining what it means to you and your company. For example, consider who the users will be and what they will be using it for. Think about the different functions you’d want your mobile accounting and financial solution to cover.”
   
4. Social Media – Social media has become an essential tool for firms wanting to engage with their current and potential clients while expanding their brand reach. Gary Boomer, CPA/CITP, CEO of Boomer Consulting Inc. and Jim Bourke, CPA/CITP/CFF, partner in charge of internal technology at accounting firm WithumSmith+Brown, see social media as a tool that will continue to evolve and provide accountants with a valuable sales and marketing platform that can instantly connect firms to current and potential clients. Most accounting firms understand the importance of implementing traditional marketing into their overall business development plans, but many firms may not realize the power of integrating social media marketing into their long-term marketing strategies. Social media should be a part of a firm’s overall business development strategy and if done consistently, will help amplify the effectiveness of all other marketing and business development efforts.

Accountants will need to embrace the rapid advances in accounting technology if they want to remain relevant in the accounting industry. This includes staying up-to date with technological trends, optimizing and adapting current accounting software to meet the needs of their firm, and being open to accepting and learning advancing technologies.