Services that could become a staple of accounting in the future

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The accounting profession hasn’t fluctuated much since its birth in the 1490s. However, the modern era has brought developments unique to the technologies that are changing today’s world.

Accounting students in the University of Alabama at Birmingham’s Bachelor of Science in Accounting program, will be exposed to the many ways the field of accounting is evolving. Given the rapid pace of change, not only in the accounting field but in all kinds of industries, it’s critical that students have an all-encompassing understanding of new trends and technologies that affect the workplace.

Here are some of the services and products that tomorrow’s accountants should learn about today:

Accountant working on charts

1. Working in the cloud

The cloud has given professionals easy access to their most important documents and information from virtually anywhere with an internet connection. Cloud accounting allows for a more streamlined approach to accounting, eliminating the need for a collection of desktop applications, Flatworld Solutions pointed out. Add-ons to cloud software allow accountants to customize their offerings to their own or their clients’ needs.

As cloud accounting continues to grow and become more widely accepted by the accounting world and those countless industries that accountants serve, it’s critical that new and experienced accountants alike develop their understanding and abilities with cloud technologies.

CPA.com President and CEO Erik Asgeirsson noted in a press release that cloud accounting has evolved into a high-margin, fast-growing sector of the accounting world. For all CPA firms, regardless of size, location or client base, cloud services are necessary.

“We’re seeing broad pickup in cloud services and other emerging technologies,” Asgeirsson said in a press release for the American Institute of CPAs. “The next wave that leads to greater productivity and capabilities for advanced firms is fuller integration of these technologies and the elimination of bottlenecks in work processes.”

CPA firms that offer cloud accounting services generally grow faster than those that don’t, Accounting Today reported. This shouldn’t be a surprise, though – today’s emerging companies, small businesses and startups are highly likely to be technologically inclined; they probably already operate their businesses, at least partly, in the cloud.

2. Focusing on cyber security

With the ever expanding technology of cloud computing, the internet has also paved the way for new types of crime. In 2016, data breaches increased 40 percent compared to the year before, according to IdentityForce, an identity, credit and privacy protection agency.

Though many companies are working to bolster their cyber security efforts, 2017 has demonstrated that online criminals are just as active as ever. Some high-profile data breaches include Arby’s, Saks Fifth Avenue and even Gmail.

Given the prevalence of cyber-crime and the extensive damage it can do to a company and its consumers, it’s only natural that many accounting firms may start to hear more about their clients’ concerns in this respect. As such, there may be more opportunities for CPAs to expand their auditing services to include cyber security risk management program assessments and advice on how they can improve, AICPA Insights wrote.

For those clients who haven’t yet put a cyber security risk management program in place, auditors can lend a helping hand using their knowledge of these frameworks to assist them in keeping their information secure.

3. Including data analytical procedures in audits

Data analytics can provide organizations with greater efficiency and accuracy, two things accounting firms value highly. ICAS, a professional organization for Chartered Accountants in the UK, reported that accounting software companies are incorporating analytical tools into their programs to aid in the identification of incorrect or incomplete data entries. This will alert the user of potential issues before submitting important forms like taxes.

For data analytical procedures and tools to be as effective as possible, there first must be a substantive body of information to review, Accounting Today pointed out. To that end, accountants can expect to see increased automation of data collection.

The audit process is one focus of accounting that can benefit from automated data collection and analysis. Currently, gathering information pertinent to an audit can be time-consuming and prone to errors. As information such as expense reports and other accounting data is automatically uploaded into the correct systems, audits can be run quicker and more efficiently.

Audits are common in any industry, and are important for ensuring all transactions are done correctly. But the information used in an audit can provide a unique view into even more industry insights. AICPA pointed out that, as data collection and analysis becomes quicker and more complete, new insights can be gleaned from the information. This type of service will become more popular among accounting firms as more clients seek new information.

4. Incorporating blockchain technology

Blockchain has become one of the most talked-about disruptions in the financial services industry today. It’s an electronic form of record-keeping that eliminates the possibility of deleting or falsifying information entered into the system, Deloitte explained.

The system that collects the financial transactions also involves an open, joint registry, which means that as soon as data is entered, it’s essentially automatically notarized.

When a company uses blockchain, it’s accessible in a file that continuously grows in the exact order that transactions are made, Accounting Today reported. The records are called “blocks” and form a chronological chain, thus giving way to the technology’s very straight-forward name.

Much of the accounting world remains a largely manual one that requires human eye and reason to oversee every step. However, this technology has the potential to change that. Since every block in the chain is automatically entered and virtually impossible to corrupt or change, blockchain is assumed to be completely trustworthy without the need for a centralized authority, thus eliminating the need for certain manual accounting processes.

Blockchain is still very much an emerging technology, with perhaps more recognition than actual users. Though often associated with cryptocurrency, like Bitcoin, there are many real-world uses for blockchain in a wide variety of industries, with financial industries highly likely to see the benefit in it.

“In the future, virtually every function in the world of financial services will be displaced, disintermediated and decentralized,” Ron Quaranta, chairman of the Wall Street Blockchain Alliance, told attendants of an American Institute of CPAs / CPA.com Executive Roundtable in February, according to Accounting Today. “The internet gave us a powerful way to share and access information. Blockchain now gives us a powerful way to share and access value.”

Though not widely used at the moment, future accountants may begin to see blockchain used for:
• Reviewing audit trails.
• Tracking asset ownership.
• Registering assets or inventory systems.
• Automating audit processes.
• Authenticating transactions.

UAB can prepare future accountants for industry changes

As the world of accounting continues to evolve in ways never seen before, experienced accountants and students of accounting alike should work to keep up with these changes. Studying accounting through a robust program like the University of Alabama at Birmingham’s Online Bachelor of Science in Accounting program, students can feel confident to enter the world of accounting with all the latest education relevant to the industry today.

To learn more about this degree program, reach out to an enrollment advisor today.

Recommended Readings:
Mobile Devices Present Corporate Security Challenges
Tips to Survive the Online College Experience

Sources:
1. https://www.flatworldsolutions.com/financial-services/articles/top-5-trends-in-accounting.php
2. https://www.cpa.com/press-releases/technology-impacting-broader-areas-firm-practice-cpacom-ceo-says
3. https://www.accountingtoday.com/opinion/3-top-tech-trends-for-public-accountants-to-watch-in-2017
4. http://www.aicpa.org/Press/PressReleases/2016/Pages/Client-Accounting-Services-Emerging-as-Significant-Revenue-Category-Across-CPA-Firm-Segments-According-toAICPA-CPAcomSurvey.aspx
5. http://blog.aicpa.org/2017/04/5-service-opportunities-set-to-transform-the-accounting-profession.html#sthash.ENNhp1yi.PFScwGzT.dpbs
6. https://www.identityforce.com/blog/2017-data-breaches
7. https://www.icas.com/ca-today-news/three-ways-technology-is-changing-accounting
8. https://www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20game-changer%20in%20accounting.pdf
9. https://www.accountingtoday.com/opinion/blockchain-accounting-and-audit-what-accountants-need-to-know