Deloitte Report Explores AI and Other Technology Trends

Deloitte has released its 10th annual report on technology trends, “Tech Trends 2019: Beyond the Digital Frontier.The report explores how the convergence of new technologies with powerful technological forces is driving disruption across industries. New technologies include advanced networking, serverless computing and intelligent interfaces; and technological forces encompassing digital experiences, cognitive and cloud.

Ten years ago, when smartphones and mobile apps were gaining traction, and technologies like cloud and the Internet of Things were emerging on the scene, Deloitte released its first Tech Trends report. Some companies are only beginning to explore trends discussed in 2010, while others have advanced rapidly along the maturity curve, the Big 4 firm says.

Scott Buchholz

“The report details how organizational leadership can shape ambitions and instill a culture to sense and make sense of what tomorrow may bring. And – importantly – a path to get there from the realities of today,” says Scott Buchholz, managing director and government and public services CTO, Deloitte Consulting LLP

The report begins with a reflection on a decade of disruptive change driven by nine forces: digital experience, analytics, cloud, core modernization, cyber, business of information technology, cognitive, blockchain, and digital reality. The report explores where these forces are headed.

Deloitte’s report also covers six trends:

  • AI-fueled organizations – Leading companies are systematically deploying rapidly maturing technologies – machine learning, natural language processing, RPA and cognitive – not just to every core business process, but into products, services and the future of industries.
  • NoOps in a serverless world – We’ve reached the next stage in the evolution of cloud computing, with technical resources completely abstracted and management tasks increasingly automated. Freed from mundane responsibilities, IT talent can focus on activities that more directly support business outcomes.
  • Connectivity of tomorrow – At both macro and micro levels, technologies like 5G, mesh networks, and edge computing are expanding business’ reach. Advanced networking is driving development of new products and services and is transforming how work gets done.
  • Intelligent interfaces – Today, people interact with technology through ever-more intelligent interfaces that combine the latest in human-centered design techniques with leading-edge technologies such as computer vision, conversational voice, auditory analytics, augmented reality and virtual reality.
  • Beyond Marketing – Experience reimagined  To deliver the highly personalized, contextualized experiences that today’s customers expect, some chief marketing officers are using a new generation of marketing tools and techniques focused on personalized, contextual and dynamic experiences.
  • DevSecOps and the cyber imperative – DevSecOps fundamentally transforms cyber, security, privacy and risk management from being compliance-based activities into essential framing mindsets across the product journey.

The final chapter explores how modern businesses can navigate digital transformation – building a roadmap that incorporates the right technologies, techniques, talent and executive support.

PwC Uses Drone In Audit of U.K. Energy Client

Not only has PwC piloted a drone to cut time from a U.K. audit – a first for the Big 4 firm – it is also helping clients tap the technology to gather data themselves.

The drone, controlled from the ground by PwC, was used to assess coal inventory for the German energy giant RWE in Aberthaw, South Wales, the firm says. At the same time, the firm predicts a “drone economy” will employ 500,000 people by 2030 and is studying drones to eventually help clients extract insights from drone data.

Now, however, recreational drones have proven troublesome for air traffic and are strictly regulated. In the future, PwC predicts that a regulated commercial fleet of about 76,000 drones will be used for a range of different tasks, reports Consultancy.uk. To prepare, the firm has gathered a team of drone experts and set up a global center of excellence to study drones’ potential.

UK Drone company’s QuestUAV’s fixed wing drone, ready to take flight

As a test, PwC used a drone to measure the volume of RWE’s coal reserves to determine value. In 30 minutes the drone captured 300 images, which were used to create a “digital twin” of the coal pile to measure its volume. The value of the coal was then calculated to within 99% accuracy. The traditional method of hand-counting inventory would have taken four hours, the firm asserts.

“While the traditional method remains reliable and will still be used for RWE’s formal year-end financial statements, the drone trial was conducted to explore ways of challenging the traditional method of stock counting,” says audit partner Richard French in a statement. “It was a classic example of new technology challenging the old – and based on our results, the potential is groundbreaking.”

Elaine Whyte, UK drones leader at PwC, adds, “Sectors with large assets in hard to reach areas are the most obvious starting points for expanding this kind of work further – from mining to agriculture and forestry… In this case, drones have allowed us to trial a more efficient service which has the potential to save both money and time, while allowing us to deliver greater insight too. There is also a clear health and safety benefit to using drones for this type of work, without someone having to climb over the coal pile.”

Trust and Business Insight are More Critical than Ever in the Digital Age, CPA.com CEO Says

Erik Asgeirsson

Technology is transforming all major practice areas within the accounting profession, and CPAs will increasingly adopt a more strategic role in delivering trusted information and insights, the chief executive of CPA.com said.

“Our priority is to help build an ecosystem that allows CPA firms to succeed in delivering both the trust driven by compliance work and insights from emerging advisory services,” says Erik Asgeirsson, president and CEO of CPA.com, in a keynote speech at the recent 2018 Digital CPA Conference. “This has been an effective approach with client accounting advisory services, and the same lessons are now being applied to tax, audit and assurance services.”

Asgeirsson went on to speak about how the cloud, artificial intelligence and digitized data are reshaping practice areas:

  • Client accounting advisory services (CAS) – Virtual CFO and controller services are becoming firmly established and firms are embracing best practices. The focus is now on automating data inputs, building scale and deepening advisory insights with high-value business intelligence.
  • Audit and assurance services – “You can’t have cloud auditing, with the power of artificial intelligence-driven efficiency and insight, without cloud accounting.” On the assurance side, CPA.com, AICPA and CaseWare International this year launched OnPoint PCR, a dynamic, smart solution for preparation, compilation and review engagements. In a major commitment to innovation, the AICPA, CPA.com, CaseWare and a consortium of leading CPA firms are collaborating on the development of a Dynamic Audit Solution, elements of which would benefit all audit practices.
  • Tax – Driven by client demand, CPA practices are moving beyond tax compliance to integrated planning services that incorporate retirement and other financial and life planning services.

The AICPA and CPA.com are planning expanded training and curriculum to support the continued extension into advisory services. CPA.com also continues to play a key role in fostering innovation through thought-leading initiatives, such as its executive roundtables – including one at this fall’s World Congress of Accountants in Sydney, Australia – with key accounting technology providers, firm leaders and influencers from within the profession. The company also oversees, in collaboration with the Association of International Certified Professional Accountants, a startup accelerator focused on early-stage companies in fintech and educational technology.

Star Americas Partners With Wilson Legal Solutions

Norm Mullock

Two software providers, Star Americas Software Solutions and Wilson Legal Solutions, have partnered to improve services to accounting firms and other professional services organizations.

As part of this new relationship, Wilson will join with Star in providing professional, technical and advisory services for Star Practice Management software. In addition, Wilson will deliver advanced analytics solutions, including advanced warehousing and cubes, to enhance the native business intelligence (BI) and reporting functionality in the Star software.

“As our business and customer roster continues to expand, we identified the need to grow our partner ecosystem,” says Bernard Skalla, CEO of Star Americas. “Wilson represents an attractive business partner, given the nature of its client base and its unique BI product offering.”

Norm Mullock, VP of strategy for Wilson, adds, “We see a significant number of larger accounting and consulting firms looking to modernize their legacy practice management applications by adopting Star’s innovative solution. Wilson’s diverse team of subject matter experts is perfectly suited to help organizations modernize their systems in the short term, and increase their access to richer analytics, metrics and reporting, to better manage their service lines in the long term.”

Mullock notes that the accounting industry is facing greater pressure and new challenges in areas including business development, risk management, and HR, where Wilson can provide additional expert guidance. As part of this partnership, Wilson will develop and configure specialized Business Intelligence (BI) tools for accounting firms that want to integrate data from multiple sources and manage analytic cubes through Microsoft Power BI.

Star is the professionals’ top choice for practice management software, chosen by leading CPA and accounting firms in 30 countries. Star is a sponsor of INSIDE Public Accounting’s IT Report.

The Radical CPA and Botkeeper Partner to Bring Bookkeeping Into Future

Jody Padar, principal of New Vision CPA Group of Mount Prospect, Ill., is partnering with Enrico Palmerino and the team at botkeeper, a bookkeeping solution that helps firms expand and modernize their businesses.

Botkeeper is advancing how the bookkeeping industry has been managed by accounting firms. With botkeeper, accounting firms can offload the day-to-day blocking and tackling of bookkeeping (data entry, reconciliations, classifications), allowing accountants to focus on higher-level client advisory services, Padar says in a statement.

Using machine learning that has been exposed to millions of financial transactions, botkeeper is able to fully automate a bookkeeping department without increasing headcount/overhead. With botkeeper, firms see a reduction of human error, superior reporting as well as real-time and 24/7 data entry. Padar contends that White Labeling botkeeper’s services reduces bookkeeping costs by 30% to 50% and allows CPAs to take on 10+ new clients per day.

“Botkeeper has fundamentally changed how a CPA firm of the future, (but really happening today) will operate,” says Padar. “We can scale infinitely and reduce our costs significantly. It is so exciting to me to be able to share this new technology with the accounting profession and truly help radicalize other accounting and bookkeeping firms and change their business models to promote a better firm culture.”

Padar, a prolific speaker and columnist, is author of From Success to Significance: The Radical CPA Guide.

Information on External Auditors on the Rise: Center for Audit Quality

The amount of information available to investors and other stakeholders on audit committee oversight of the external auditor continues to increase, according to the fifth edition of the “Audit Committee Transparency Barometer,” an annual report issued jointly by the Center for Audit Quality (CAQ) and Audit Analytics.

“The trends revealed in our report tell a clear success story – over the past five years, audit committees have provided increasingly robust disclosures about their important investor-protection role in overseeing the external audit,” says CAQ Executive Director Cindy Fornelli. “Taking steps to enhance transparency into our extraordinary system of financial reporting, as many audit committees are doing, strengthens both the confidence of investors and their ability to make sound decisions in the capital markets. To build on this progress, the CAQ encourages audit committees to explore additional opportunities for transparency improvements.”

Each year since 2014, the report has measured the robustness of proxy disclosures among companies in the S&P Composite 1500. Findings in this year’s report include:

  • 40% of S&P 500 companies disclose considerations in appointing the audit firm (up from 13% in 2014), compared to 27% of mid-cap companies (up from 10% in 2014) and 19% of small-cap companies (up from 8% in 2014).
  • 46% of S&P 500 companies disclose criteria considered when evaluating the audit firm (up from 8% in 2014), compared to 36% of mid-cap companies (up from 7% in 2014) and 32% of small-cap companies (up from 15% in 2014).
  • 26% of S&P 500 companies disclose that the evaluation of the external auditor is at least an annual event (up from 4% in 2014), compared to 17% of mid-cap companies (up from 3% in 2014) and 12% of small-cap companies (up from 4% in 2014).

Research Says Cybersecurity Most Important Emerging Technology

GlobalData announces that its latest research report, Global Emerging Technology Trends Survey 2018, based on a survey of more than 1,500 companies, states that cybersecurity was considered the most important emerging technology by more than half of respondents.

That puts cybersecurity ahead of cloud computing, artificial intelligence (AI) and the Internet of Things (IoT).

Ed Thomas, technology thematic analyst at GlobalData, says, “Cybersecurity is an investment priority for enterprises from all industries, highlighting its emergence as a critical business function in today’s digital economy. Any company not investing in cybersecurity runs a higher risk of being hacked and stands to fall behind the competition.”

GlobalData’s report also finds that companies worldwide are growing their emerging technology investments. The survey data suggests that businesses from across the world are planning to make major investments in areas like cybersecurity, AI and IoT.

“Our data demonstrates that the appetite for investment in emerging technologies is not limited to the more mature IT markets of North America and Europe, but is actually global,” says Thomas. “This represents a significant opportunity for technology vendors, as long as they have the capability to secure business in countries that may be outside their traditional marketplace.”

RSM Names National Leader of Blockchain Services

Jay Schulman

Jay Schulman

Chicago-based RSM US LLP (FY18 net revenue of $2.14 billion) announces that Jay Schulman, a principal based out of the firm’s Chicago office, has been named national leader of blockchain and cryptocurrency services for RSM US LLP.

In this role, Schulman is responsible for leading RSM’s efforts to help its clients account for the complex regulatory, tax and trade, auditability, risk and compliance implications related to global transactions and exchanges. He has authored numerous related articles designed to help middle market business leaders anticipate and address the unique issues and challenges facing their businesses and the industries in which they operate.

“At RSM, we understand that the pace of change in today’s increasingly global business environment creates unique challenges and opportunities for business leaders, particularly those in the middle market,” said Jeff Johannesen, chief strategy and innovation officer with RSM US LLP. “While large business leaders typically have the resources to anticipate and address evolving needs, middle market businesses often need the support of a trusted advisor, and that’s particularly true when it comes to major technological advances.”

Schulman says, “Blockchain is now a reality. At RSM, we have a unique understanding of how this and other emerging technologies and evolving regulations will impact the middle market.”

Two CPAs Win Innovation Awards

Two CPA firm leaders – one an early champion of blockchain services, another an advocate of artificial intelligence in the audit process – have been named recipients of CPA.com’s 2018 Innovative Practitioner Award, which recognizes innovation in process, services or technology implementation in public accounting.

The honorees are:

Samantha Bowling

Samantha Bowling

  • Samantha Bowling, partner, Garbelman Winslow of Upper Marlboro, Md. – Bowling is chair of the Maryland Association of CPAs. Bowling and her team of small firm practitioners are successfully integrating artificial intelligence (AI) in auditing for small businesses, nonprofits and local government. Using an external AI platform, the firm has improved the audit process and helped reduce the risk of material misstatements for its clients. As an early adopter, Bowling is providing valuable input to help make the technology more usable for other firms.
  • Jagruti Solanki, senior manager, Atlanta-based Aprio (FY17 net revenue of 85.1 million)Solanki helped launch the firm’s blockchain services group and has been instrumental in developing best practices for accounting and financial reporting related to the digital distributed ledger technology. Among other services, her team helps clients navigate blockchain implications for domestic and international accounting, as well as tax obstacles associated with tokenization, initial coin offerings and cryptocurrency. Solanki is being admitted to the partnership next year in recognition of her leadership on initiatives such as blockchain that drive growth and profitability for the firm.
Jagruti Solanki

Jagruti Solanki

“Samantha and Jagruti define what being an innovative practitioner is all about: the ability to assess where the profession is going, incorporate emerging technologies to either imrove an existing service or launch a new one, and then successfully position the practitioner’s firm as a leader in that area,” says Erik Asgeirsson, president and CEO of CPA.com. “Both blockchain and AI stand to make a big impact on the profession and our honorees are both advancing strategies around these technologies for their firm.”

Wipfli Enlists Cybersecurity Partner Program

Milwaukee-based Wipfli LLP (FY18 net revenue of $317.9 million), a top 20 national accounting and consulting firm, has joined the NormShield partner program to expand its current cybersecurity solutions.

NormShield provides on-demand and standards-based cyber risk scorecards. The enhanced portfolio will provide Wipfli with a powerful tool to improve and reduce the risk associated with its clients’ supply-chain partners, third-party vendor networks and sensitive data.

“Many business leaders understand that cybersecurity is a moving target, and we firmly believe it’s our job to prepare our clients to manage their risk, circumvent potential consequences and protect their bottom line,” says Robert Cedergren, PIC of Wipfli’s risk advisory services practice.

According to a recent study conducted by Ponemon Institute, external cyber risks are some of the most dangerous companies face: The study indicated that more than 56% of companies experienced a third-party breach in 2017 and, according to Cybersecurity Ventures, cybercrime will cost the world $6 trillion annually by 2021, up from $3 trillion in 2015.

“The NormShield cyber risk scorecard provides an objective, external measure of an organization’s cyber risk posture,” says Mohamoud Jibrell, CEO of NormShield. “We’ve taken a ‘new school’ approach to supply-chain risk monitoring that’s easy to understand and includes online, dynamic risk scorecards with straightforward letter-grades based on defined risk categories. The risks are then prioritized with detailed information on the severity of the risk and through the portal. From there, the NormShield scorecard details how to mitigate and remediate each identified risk.”

Through its relationship with NormShield, Wipfli will leverage the company’s ability to gather data in a non-intrusive way, classify the data into security risk categories, apply advanced algorithms to analyze and convert data into risk intelligence, generate easy-to-understand scorecards and dashboards, and provide detailed remediation steps to secure the networks from outside attack.