Dean Dorton Adds Intacct Cloud Financial Applications to Its Portfolio

Lexington, Ky.-based Dean Dorton (FY16 net revenue of $27.3 million) announced a partnership with Intacct, a provider of cloud financial management and accounting software. Together they will sell, implement, support and integrate solutions for Intacct’s cloud financial applications.

“We’ve been helping clients choose, implement and use the best software for their businesses for a long time, and lately it is very clear that successful companies are increasingly interested in using a cloud-based financial system so they can access their financial data anytime, anywhere,” says Jason Miller, director of business consulting services at Dean Dorton.

Dean Dorton clients will also benefit from the web-based dashboards, reporting and business intelligence capabilities built into the Intacct system. Intacct provides a powerful set of analytics and reporting tools that empower users with real-time, accurate and consistent visibility into financial and operational data. The ability to run financial reports by dimensions, (customer, vendor, project or fund) is beneficial to business owners, board members and investors.

“Our cloud based system is well suited to today’s ever-changing technological advancements and will help companies of all sizes operate efficiently and effectively using their real-time financial data. Jason Miller and the Dean Dorton team have extensive background in technology and accounting, which will be a huge benefit to our mutual clients,” says Taylor Macdonald, vice president of channels for Intacct.

Briggs & Veselka Announces Partnership with IntrapriseTechKnowlogies

Donny Shimamoto

Donny Shimamoto

Houston-based Briggs & Veselka Co. (FY16 net revenue of $35.4 million) has entered into a joint agreement with IntrapriseTechKnowlogies (ITK) and its managing director, Donny Shimamoto, to provide IT consulting and innovation services to middle market companies in the Texas Gulf Coast and South Texas.

MP John Flatowicz says, “Our firm is dedicated to being progressive and this partnership will keep us and our clients ahead of the curve.”

Additionally, B&V has licensed the Intraprise Architecture® methodology and use of the Intraprise Blueprints® intellectual property with clients. Shimamoto will train the B&V staff on how to use these proprietary tools to support work in audit, tax, internal audit, and other advisory services. He will also be helping to develop the B&V team through a variety of engagements. The partnership began with ITK and B&V co-publishing the results of a 2017 Briggs & Veselka Cyber Security Survey. The interactive survey showed that 65% of respondents conveyed a perception of a high or moderate risk of a cyber security incident while more than half were not confident, neutral, or didn’t know if their company was properly secured from internal cyber threats, and an equal amount were not confident, neutral, or didn’t know if their company was protected from external threats.

The study also found that IT governance and IT risk management are very different from IT execution, which can present a false sense of security for middle market companies.

Shimamoto says, “The increasingly targeted digital space makes firms and their clients a greater target than before. It is important each strive to capitalize on innovations in the marketplace and learn from highly trained professionals. The programs we will jointly deliver to Houston area corporations will not only educate, but protect assets for years to come and provide Houston organizations with improved agility and competitive advantage.” Shimamoto is immediate past chairman of the AICPA’s Information Management & Technology Assurance Executive Committee and was recently awarded the AICPA Standing Ovation Award.

Forbes: AI, Machine Learning Will Complement Accountants, Not Replace Them

Robots are not going to replace all human accountants or bookkeepers – at least not anytime soon.

So says Bernard Marr, an author, consultant and specialist in Big Data, who writes for Forbes magazine.

Marr contends that many professionals are starting to fear that technology will make their jobs obsolete, but fear not. “The profession is going to become more interesting as repetitive tasks shift to machines. There will be changes, but those changes won’t completely eliminate the need for human accountants, they will just alter their contributions,” Marr wrote in a July 7 article.

He describes machine learning as the leading edge of artificial intelligence (AI). Machines can learn by using algorithms to interpret data to predict outcomes and learn from successes and failures. As machines take over the more mundane, repetitive and time-consuming accounting tasks, accountants and bookkeepers will be able to devote more time to analyze and interpret the data and help clients by making recommendations.

Some of the possibilities for accountants, working with machines as their new colleagues:

  • Auditing of expense submissions – Machines can learn a company’s expense policy, read receipts and audit expense claims to ensure compliance and only identify and forward questionable claims to humans.
  • Risk assessment – Machine learning can pull data from every project a company had ever completed to compare it to a proposed project.
  • Analytics calculation – Machines can learn to provide information on revenue for a certain product in a certain quarter, or growth in a particular division of the company over a period of years.
  • Siri-type interface for business finance – A conversational app called Pegg, which works with Slack, a messaging app, can create invoices and respond to questions about revenues and expenses.
  • Automated invoice categorization – Accounting software firm Xero is deploying a machine learning automation system that will be able to learn over time how to categorize invoices.
  • Bank reconciliation – Machines can learn how to completely automate bank reconciliations.

“As accounting firms and departments begin to rely more heavily on machines to do the heavy lifting of calculating, reconciliations and responding to inquiries from other team members and clients about balances and verifying info, accountants and bookkeepers will be able to deliver more value to their clients and handle more clients than ever before,” Marr writes. “It is high time for every accountant to reflect on their job, identify the opportunities machine learning could offer to them, and focus less on the tasks that can be automated and more on those inherently human aspects of their jobs.”

EY Launches New York-Based Financial Services Innovation Center

Big 4 firm Ernst & Young has launched its Union Square Innovation Center. The center, which will focus on financial services, is a flagship location for EY wavespace™, the EY organization’s global growth and innovation network.

The lab will serve as a hub for the Suits+Jeans™ approach to innovation, which combines deep business experience with specialists in disruptive trends such as FinTech, blockchain, artificial intelligence, robotics and data analytics.

“When suits and jeans functions come together, they can unlock an institution’s ability to innovate and fundamentally change the way organizations do business,” says EY’s Roger Park. “We are excited to serve as a nexus for these encounters. Our Union Square Innovation Center is a place for experimenting with new ideas, pushing boundaries and truly industrializing innovation.”

Focused on helping financial services organizations achieve breakthroughs at speed and scale, the Center also illustrates EY’s commitment to working with a local ecosystem of clients, government organizations, the startup community and academic institutions to bring New York City innovation into the global wavespace™ network.

AICPA Launches Program to Spur Innovation

The AICPA and CPA.com are jointly sponsoring an initiative to accelerate the growth of early-stage companies that could have significant impact on the accounting profession. The goal is to promote innovation and give the profession early insight into disruptive technologies and services in finance and business.

The Association of International Certified Professional Accountants and CPA.com Startup Accelerator will look to support up to five early-stage companies over the next year.

It will focus on startups in two key areas: 1) Technology and Financial Information, which could include advances in artificial intelligence, automation of routine tasks and the application of blockchain/digital ledgers, and 2) Professional Competency Innovation, which can encompass machine learning to personalize professional education, collaboration tools for mentors and experts, and improvements in measuring professional competency, among other categories.

“The Association and CPA.com have a deep base of knowledge and resources to offer entrepreneurs looking to find a foothold in the accounting ecosystem,” says Lawson Carmichael, the Association’s executive vice president for strategy, people and innovation. “And for us, the startup accelerator offers a chance to ‘see around corners’ and take a more long-range view of opportunities in business transformation and innovation. There’s a compelling business case for collaboration.”

The startup accelerator will offer benefits to entrepreneurs in three ways:

  • Provide up to $20,000 in funding per finalist
  • Access to subject matter experts, including an advisory panel of thought leaders in the accounting technology field, who can provide coaching and mentoring on issues and opportunities unique to the profession
  • An opportunity to showcase their product or service next June at AICPA ENGAGE 2018, one of the largest accounting-related events in the United States.

Applicants from all global markets are eligible. Submissions by startups are due by Oct. 5. Interested companies who want more information can contact Greg Lafollette, a strategic advisor with CPA.com, greg.lafollette@hq.cpa.com, or Mark Brooks, a member of the AICPA’s innovation team, mark.brooks@aicpa-cima.com. To apply for consideration or learn more details about the startup accelerator, visit aicpaglobal.com/accelerator.

IPA Vendor Spotlight On … Chandra Bhansali, AccountantsWorld

Name: Chandra Bhansali
Company: AccountantsWorld
Title: Co-founder (with wife Sharada) and CEO

Accomplishments:

Chandra Bhansali

Chandra Bhansali

  • Introduced the first Windows-based based professional tax system in the 1990s.
  • Created the first payroll processing solution exclusively for accountants.
  • Used cloud technology to create Accounting Power for firms to offer client accounting services, countering the impact of do-it-yourself accounting systems on accounting practices.
  • Named one of the “100 Most influential People in Accounting” by Accounting Today for over 10 years.

You’ve been “in the cloud” for much longer than most and seem to have a knack for identifying emerging technologies. Can you offer any practical advice on how accounting firms can be more ‘future-ready’?

I’d tell them, “You are your clients’ most trusted advisor. What makes you their most trusted advisor? Your ability to analyze all the facts and help your clients make informed decisions based on those facts. To be future-ready, you need to use this important trait. It’s a fact that migration to the cloud is inevitable. Given that fact, when will you benefit the most from the migration? Should you wait until you are pushed to the wall, or move to the cloud sooner, in a more strategic way, to make the most of the migration?” It’s ironic that many of the same accountants who are their clients’ best advisors falter when making some of the most important decisions about their own practices.

Client accounting services seems to be a growing niche. Are accountants taking better advantage of the power of technology to help their clients?

Very few accountants are taking full advantage of technology to help their clients. Part of the problem is that most accountants don’t realize the capabilities of professional cloud solutions like Accounting Power. Given the choice, a large percentage of small businesses would not want to do their accounting in-house. They consider accounting to be a hassle and would love to offload it to their accountants, but most accountants don’t offer client accounting services (CAS), because functions like bill payment have traditionally been low-margin services. But with programs like Accounting Power, an accountant’s staff can now do everything their client’s staff did, only much faster and more accurately – all without leaving the office. Because of advances like this, many accountants are currently offering highly profitable CAS, which will ultimately become a major growth area.

What’s the biggest mistake firms typically make when making the move to the cloud?

The biggest mistake firms typically make when migrating to the cloud is to make a lateral move in which they move from desktop to cloud, yet their practices realize only marginal gains. That happens primarily for two reasons. First, these accountants don’t do their homework and learn about all the available solutions. Second, they are stuck in their current processes. To take full advantage of the cloud, you need to change your processes. If you keep an open mind and align your processes for optimal performance, then you will be able to take your practice to new heights that were never before possible.

There’s been lots of talk about the potential impact of Artificial Intelligence on the accounting profession. What’s your view?

My view about Artificial Intelligence is very simple – accountants with “Predictive Intelligence” will actually benefit a lot from AI. I’ll give you a simple example. AI will certainly minimize mundane tasks like data entry. If you let your clients offload their accounting work to you today, your fees will be based on what they currently spend on their bookkeeper or in-house accountant. When some of the capabilities of AI kick in to virtually eliminate data entry, that will greatly reduce your staff’s work and you will reap the benefits of that productivity gain. That’s “Predictive Intelligence.”

Final thoughts?

You know you have tremendous influence with your clients. Until now, accounting software vendors and payroll service providers have used your client relationships to make themselves billions of dollars. Would you like to continue doing that, or would you rather use your client relationships do what is in your, and your clients’, best interest? If you prefer the latter option, then download and read my whitepaper, “Forget Value Billing. Think Value Building.”  It will show you how you can use the cloud to greatly raise your bottom line, better serve your clients and feel the pride of being an accountant. Please visit www.AccountantsWorld.com/value to download the whitepaper.

Do you know someone else who would make a good Spotlight? Contact Christina Camara.

New AICPA Publication to Guide Reporting on an Entity’s Cybersecurity Risk Management Program

The AICPA has developed a new guide, “Reporting on an Entity’s Cybersecurity Risk Management Program and Controls,” to assist CPAs who are examining and reporting on an entity’s cybersecurity risk management program.

Reporting on a client’s description of its cybersecurity risk management program will help clients demonstrate to stakeholders, customers, vendors and others that they have sound cybersecurity procedures and practices.

The publication’s release follows last month’s introduction of two resources under a voluntary cybersecurity risk management reporting framework:

  • Description criteria – For use by management in explaining its cybersecurity risk management program in a consistent manner and for use by CPAs to report on management’s description.
  • Control criteria – Used by CPAs providing advisory or attestation services to evaluate and report on the effectiveness of the controls within a client’s program.

The 263-page publication includes chapters on Accepting and Planning a Cybersecurity Risk Management Examination, Performing the Cybersecurity Risk Management Examination; and Forming the Opinion and Preparing the Practitioner’s Report. It is available online and in print.

Meanwhile, in a new blog post, Susan S. Coffey, AICPA executive vice president, public practice, writes, “At the AICPA, we saw the emerging market need several years ago. We recognized that there hasn’t been a consistent, common language for describing and reporting on the cybersecurity risk management programs organizations put in place. This lack of transparency makes it difficult for stakeholders to determine whether an organization’s cybersecurity risk management plan effectively addresses potential threats.”

Visit aicpa.org/cybersecurity to learn more about the CPA profession’s cybersecurity activities.

Survey: Record Number of Organizations Were Victims of Payments Fraud in 2016

Nearly three-quarters of corporate treasury and finance professionals said their companies were victims of payments fraud last year, according to the 2017 Association for Finance Professionals (AFP) Payments Fraud Survey, which generated 547 responses.

This is the highest percentage since the survey debuted in 2005 and comes after a dramatic increase in 2015. Check fraud and business email compromise are both on the rise.

Checks continue to be the most popular method for committing payments fraud. Fully 75% of organizations that were victims of payments fraud in 2016 experienced check fraud – an increase from 71% in 2015. This is a reversal of the declining trend observed in check fraud since 2010.

Highlights of the 2017 AFP Payments Fraud and Control Survey, which was underwritten by J.P. Morgan.

  • 74% of survey respondents said their organizations were victims of business email compromise in 2016 – a 10 percentage point increase from 2015.
  • 70% of organizations have implemented controls to prevent business email compromise.
  • 63% of payments fraud attempts were made by outside individuals.

“Companies that offer mandatory training for all employees, particularly around cybersecurity, and that have a plan to respond to payments fraud, will fare better than those that do not,” says Jim Kaitz, president and chief executive of AFP.

Over 70% of corporate treasury and finance professionals are hesitant about adopting mobile payments at their organizations as they question the security of this payment method.

Nancy McDonnell, managing director at J.P. Morgan, says, “With three-quarters of companies experiencing fraud in 2016, it is important that businesses take preventive measures by educating their employees and implementing the products and processes they need to prepare and protect their assets and data from cyberfraud.”

Four Disruptive Cyber Trends That Could Slow the Bad Actors

Jason Bloomberg, president of industry analyst firm Intellyx, has written in Forbes about four broad trends that reveal transformational aspects of the cybersecurity marketplace after recently attending a huge RSA cybersecurity conference in San Francisco.

Disruption No. 1: Targeting the Links in the Cyber Kill Chain

Vendors are improving their ability to understand how bad actors behave, and can thus take steps to prevent, detect or mitigate their malicious activities, says Bloomberg. This may be the broadest of all the disruptions. Today’s vendors are understanding the ‘Cyber Kill Chain,’ or the steps a skilled, patient hacker will take to achieve his or her nefarious goals.

The product of U.S. Defense contractor, Lockheed Martin, The Cyber Kill Chain contains seven links: reconnaissance, weaponization, delivery, exploitation, installation, establishing command and control, and actions on objectives. Today’s more innovative vendors target one or more of these links, with the goal of preventing, discovering or mitigating the attack, Bloomberg says.

Disruption No. 2: Leveraging AI to Better Understand Human Behavior

One area where vendors are successfully applying Artificial Intelligence, Bloomberg writes, “is to tell the good guys from the bad guys, and furthermore, to tell the good guys from the bots simply by analyzing their behavior.” Insider threats are among the most pernicious. Cybersecurity vendors are identifying, investigating and blocking insider threats by tracking the behavior of users and identifying when that behavior violates policy.

Disruption No. 3: ‘Software-Defined’ Cybersecurity

“Cybersecurity has also joined the Software-Defined Everything (SDX) movement. If we can represent our entire cybersecurity deployment as a software-based model, the reasoning goes, then we have better control, visibility and flexibility,” Bloomberg says in Forbes.

Disruption No. 4: Israel Becomes the Cyber Silicon Valley

The fourth trend is how Israeli cybersecurity startups have come to dominate the innovation in this area. Of the 26 vendors Bloomberg and his colleagues met with at the RSA Conference, they spoke with no less than six Israeli firms. Silicon Valley may still have the edge generally, but Israel is gaining fast in the cyber arena.

Combined with innovations in threat prevention, detection and defense, the long-standing advantage that bad actors have enjoyed may finally be nearing its end.

Study: Technology Pressures in Audit Profession Will Force Major Changes

With constantly evolving technology driving change in the profession, firm leaders anticipate a future that may fundamentally transform the way audits are conducted. According to Thompson Reuters, the most pressing challenges facing the audit profession can be grouped into four main categories: quality, innovation, talent and relevance.

A recently released whitepaper covers how each of these challenges impact today’s audit and how reimagining solutions to these challenges can mean a new future.

The white paper, “Four Keys to the Future of Audit,” says that firms don’t realize that their audits are living in the past. “Many are under the false pretense that since their audits are paperless, they are modernized and future-ready. However, most of these firms don’t take into account that while the medium may have changed, nothing about the audit process itself has changed along with it – thus, the same systematic inefficiencies are still present. Furthermore, auditors continuously fail to use technology to better understand a client and their business, the industry and as a tool to enhance curiosity.”

Technology can be used to improve quality of the audits, the report says. For example, real-time quality dashboards can help the firm monitor quality. Emerging cloud-based audit technologies offer significant improvements in this area and hold “great promise in helping the profession move into the future,” the report says.

Big data and data analytics also offer promise, as auditors can provide insights that were not possible when only samples of data were examined. “However, auditors now have the ability to rise above limited amounts of data and scope out observations,” the report says. “With the ability to have an expanded real-time internal and external view, auditors can now think holistically and promote innovation within their firms.”

Cloud-based audit platforms can help position the firm for the audits of the future. Cognitive computing systems, which use algorithms to drive machine learning, will eventually become capable of anticipating problems and their solutions. “Other industries are much further along than the audit profession, but there is little doubt that cognitive computing has a prominent place in the future of the audit,” the report says. “It’s only a matter of time.”

All of these development will impact the kind of talent recruited into the profession and the skills training that should be made available.

“The audit technology tools that are in the cloud today, that integrate platform and methodology, are very good starting points to move to the future,” the report concludes. “Add cognitive computing and data analytics once they are more fully evolved, and the result could be an audit game-changer.”