Digital Financial Reporting

Arthur Levine and Scott van Pelt explain in their book The Great Upheaval that a "great upheaval" is taking place and the impact of that upheavel on higher education.  This great upheaval is also impacting accounting, reporting, auditing, and analysis. This book is useful in helping accountants get their heads around what is going on.

Levine and van Pelt point out that we are in a time of profound, unrelenting, and accelerating change of a magnitude and scope unequaled since the Industrial Revolution.  The United States is hurtling from a national, analog, industrial economy to a global, digital, knowledge economy. So is the rest of the world.

Accounting, reporting, auditing, and analysis are in the midst of a profound transformation the likes of which accounting has not seen in 500 years.

No one really knows where all this will end up.  But what is for certain is that we will not be where we are now much longer.  Will the institution of accountancy be renovated or replaced?  Will the institution of accountancy adapt or be disrupted?  So what, is this a guessing game?  Or, is it a matter of personal opinion as to where we will end up? Not really.

Change is not only inevitable; it is also imminent.  Place your bets. Personally, I am betting on Computational Professional Services. There is plenty of information for those who desire to understand what is going on. None of this is really rocket science.

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Accounting was the world's first communications technology; it pre-dated both writing and the use of numbers.  Accounting in Europe had no notion of the idea of ZERO until the middle ages. They learned about the concept of zero from Middle Eastern mathematicians and then incorporated that idea into accounting.  In 8500 BC merchants used bollae and tokens for accounting because numbers and writing had not been invented yet.  It was not until 3500 BC that clay tablets were used and writing and number systems started to emerge.  It would be another 500 years before writing and number systems were fully developed.  Double entry bookkeeping was not documented by Luca Pacioli until 1494 AD.  Luca Pacioli's double-entry bookkeeping industry standard pushed the transition from Roman numerals to Hindu-Arabic numerals. The dissemination of double-entry bookkeeping by Luca Pacioli might be deemed the most important event in accounting history.

Financial statements tell a story.  It is a milestone in an accountant's career when the accountant can weave together a logical, cogent, true and fair narrative from information provided and tell a story about an economic entity in the form of a financial statement.  With the ability to perform that task, an accountant has achieved accounting literacy.  How will telling that story change over the next 25 years as society evolves from analog to digital? Are you making the right choices?  Will blockchain have an impact on accounting?

What will the future of accounting look like? Will there be a demand for accountants; what skills will they need?