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Techno-thriller By Yigal Rechtman The prospects for students majoring in accounting are more exciting than ever. As demand for accountants in the marketplace increases, young accountants also face a fast-changing work environment driven by developments in technology. Both in industry and in public accounting firms, new accountants can expect emerging technology to be an integral part of their required tool set. Tech-nology presents both the challenges and the solutions for the work accountants undertake. Technology can even lead to new business opportunities, according to Joel Lanz, the founder of a technology assurance practice and an adjunct faculty member at Long Island University’s C.W. Post campus. “Emerging technologies provide the new accountants with the opportunity to start up or develop a practice area that a firm is not currently in, potentially leading to a leadership role,” Lanz said. What technologies and technology-driven developments will affect the CPAs of tomorrow? The Internet Long established as a tool in the home, at work and on campus, the Internet plays an increasingly important role in accounting today. Accountants are now expected to know how to use government resources such as forms and publications that often are available only online. E-commerce and electronic updates for software packages are commonplace. Accounting firms often rely on up-to-the-minute updates of items such as real estate tax records, quarterly sales tax forms and publications of every type. Although the Internet may come as second nature to most young accountants, it is important to know that they are now expected to use the World Wide Web as part of their daily work habits, not just for surfing or chatting with friends. In fact, the American Institute of CPAs this year listed instant messaging as one of the top ten most widely used technological tools, especially within larger organizations and in remote offices. Outsourcing Outsourcing in the past was mostly known for its economic effect on manufacturing, but these days, the practice of exporting activity to cheaper labor markets overseas is widespread. In the accounting world, the outsourcing of tax preparation activity is a growing business, contributing to a shift in the accountant’s traditional role from preparation to analysis. Young accountants, especially in industry and in tax departments, should know that their role as tax preparer now includes more planning and projection than assembling documents and reports into a tax return. “By combining the traditional skill set of vendor management along with the technical expertise needed to manage service providers, there is an opportunity for young accountants to bring additional value and help the bottom line for their firm and clients,” Lanz said. This trend is most pronounced in the personal tax return preparation arena. XBRL and XML Extended Business Reporting Language (XBRL) and Extensible Markup Language (XML) are becoming natural technological extensions of paper reports. Documents in the XBRL or XML formats are now required by the Securities and Exchange Commission and in some Internal Revenue Service filings. New accountants have a great advantage over peers who graduated a decade ago, because they are more likely to understand the concepts and logic of tagged-language that is similar to its simpler cousin, HTML. “Knowledge of XBRL becomes an essential skill for future tax and accounting professionals,” said Mark Chapin, partner in technology and security risk services practice at Ernst & Young. In audit firms and tax departments, electronic submission and distribution of data using these standards is increasingly common. Paperless Audits This is now a mature technology that is used in more and more firms. The trend toward paperless is led by more stringent requirements of the profession brought about in part by the Sarbanes-Oxley Act of 2002 and by the feature-rich and customization characteristics that paperless audit software packages provide. Audit partners of course like the overall control and uniformity that the audit files contain. Leased Software Most young accountants expect software to be installed on their desktop using localized resources such as a server. Increasingly, especially in small and mid-sized firms, accountants are using leased software. The cost is lower, and updates are much easier to implement. Specialized industries, such as health and welfare organizations, government contractors and others, find that remote use of software is more effective and efficient because of the highly customizable element of leased software. Of course, the idea is not new, but the perceived stability of the Internet brings this concept closer to true on-demand computing. Young accountants should expect such implementation in their workplace. There are more emerging technologies than those described here, but the key for young accountants is to know that these new tools make the accounting profession more exciting and profitable at once. In turn, young accountants are in a remarkable position to harness these developments to advance their own career. Yigal Rechtman is a partner at Person and Company LLP specializing in forensic accounting, information system integration, and computer-aided auditing techniques. He is a member of the NYSSCPA’s Technology Assurance Committee. |
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