Digital Financial Reporting

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.