Accountants will Become Reviewers of a Largely Automated Process
An interesting FSN article (titled Runbook CEO, Herman Heller, says automation of close processes is set to change the annual audit) talks about how automation of the financial statement close process will change the audit process, making auditing even more of a commodity than it is today.
Here are some of my favorite statements in the article:
According to Runbook and its devotees the accountancy world is on the threshold of one of the biggest changes in its history. In the next decade, recent developments in information technology will drastically change the role of the accountant during inspection and review of a company's financial statements. Auditing will become even more of a commodity.
And this...
It is this level of automation and dependency that Heller believes will not just revolutionize the process of closing the financial year and quarter, but also the structure of the accountancy industry itself.
And this...
"We believe this new model for period closing will turn the accountancy world on its head. Auditing costs can be reduced drastically; a result that especially the corporate world will appreciate," adds Heller.
And this...
Heller believes that there will be little downside for accountancy firms. "Society is gradually changing the demands it sets for accountancy firms, in part caused by their role in the recent financial crisis. Public opinion is calling for more safeguards against financial risks. Partial automation of the auditing process will give accountants the opportunity to shift their attention in this direction."
And finally:
In the end it's a matter of adapting or losing for accountancy firms, because there is no way back. CFO's are already welcoming the new auditing model, because it saves them time and money. The Dutch Tax Authority has given its permission to use it and it's a matter of time before the first accountancy firm will adopt this new model integrally. From that moment onward, competing accountancy firms are left without a choice. But when accountancy firms will adjust their procedures accordingly, they too will become winners in this new model.
At the same time the author is pointing out that accounting firms have little to loose, but fear this new model. Sounds like opportunity for those willing to learn about the new model.
Charlie
in General Information, XBRL General Information, XBRL changes financial close process
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Reader Comments (2)
Indeed this is a big opportunity for those willing to adapt. Recently i sat in on a presentation for accountants about XBRL (or SBR here in the Netherlands) and its consequences for the way they work. I will read the FSN article but from the points you mention in this post it sounds very much like the things i've heard. The Tax authority is moving towards a different role for itself and the accountants/auditors. Auditors can expect a closer relationship (based on mutual thrust) with the Tax authority in coming years especially in the area of the small and medium businesses. A process that will be largely automated with the auditor being the enabler of delivering correct returns to the different government authorities (Chamber of Commerce, Taxes etc...)
The accounting world has held a common line of fundamental understanding through their core degree and accreditation programs. What XBRL and associated technologies will do is to move the traditional skills into the IT infrastructure and move the accountant to a information analyst. Ten to Fifteen years after will the traditional accounting teaching models be moved into information processing courses and will we loose the fundamental historical accounting knowledge. Will the required learning curve to become "competent" in the new world prohibit new starters?