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Dividends Magazine

The times they are a-changin’

Jon Baron  Managing Director, Professional, Tax & Accounting, Thomson Reuters

Jon Baron  Managing Director, Professional, Tax & Accounting, Thomson Reuters

Over 20 years ago, the Internet was beginning to explode with the introduction of the browser and HTML.

Apple® was a struggling company, literally on the brink of extinction. Michael Dell’s infamous words at a tech conference in October 1997 came back to haunt him later. When asked what he would do with Apple if he were in charge of the beleaguered company, he responded, “What would I do? I’d shut it down and give the money back to the shareholders.” It’s a different world today.

Google® didn’t even have a website in 1997. Yahoo was the king of search, and AOL was king of email, among other things. Paper was still dominant. We read newspapers back then, and Amazon® was just three years old. In 2013, Red Sox owner John Henry paid USD$70 million for the Boston Globe. Twenty years earlier, it had sold for USD$1.1 billion! And Jeff Bezos was able to acquire the Washington Post and some other newspapers for USD$250 million in 2013 as well.

In the late ‘90s, the monthly cost per Mbps of bandwidth was USD$1,245. Today, in most North American countries, it’s less than USD$5.

In the early 2000s, Black Berry® was king of the smartphone, only to be crushed shortly after Apple’s release of the iPhone® in 2007 and the accompanying App Store. We entered a world where everything was reimagined.

We’ve gone from the desktop Web of the late ‘90s through mobile with the smartphone, then the tablet. Now, we’re into wearables.

Currently, we have a plethora of cloud storage options – Google Drive™, Apple iCloud®, Dropbox and Amazon’s cloud drive, among others.

It’s hard to believe the impact that technology has had on all of us, including the accounting profession.

For us in accounting, the last 20 years of technology have brought many advances in service capabilities and efficiencies. We work very differently now. The late ’90s saw the introduction of document management systems specifically for the accounting profession with the introduction of FileCabinet CS®, and later GoFileRoom®, making the paperless firm truly possible.

Over the years, accounting firms got on board with websites, which allowed them to market differently and far more effectively. Personal client portals were introduced by Thomson Reuters in 2001, effectively eliminating geographic constraints for firms. With portals, they could serve clients 24×7, regardless of location, and communicate and collaborate far better than they could previously.

The Web, mobile and social media have had an enormous impact on how firms can operate today. Social marketing has proven to be very effective in many firms. Audits have changed radically. Now they can be done online, with content also accessed online. We can research anywhere, anytime as well.

The next 20 years will see even more dramatic change for the profession. Artificial Intelligence (AI), cognitive computing/machine learning, natural language processing and blockchain are the hot topics today – of course, converging with Big Data. Now the Web is allowing us to collect and analyze massive amounts of unstructured data. The amount of data we are able to collect is rising exponentially, driven by the Internet of Things. Looking out to 2020, the number of connected devices will be three times the number of people in the world, according to Cisco. More people will be connected, as various projects are working on connecting the “other 4 billion.”

The convergence of machine learning/AI and blockchain will impact the profession in that our work will effectively be “assisted” by machines in the near future. As an example, we’ll be assisted far more efficiently through the processing of tax returns, as raw data will be analyzed and we’ll be guided through the process. Tax systems will simply be smarter, not only in guiding us through the calculations and highlighting areas we might need to review, but also in providing advice and guidance for the client. True business analytics will come into play – given the amount of data we’ll be able to collect and the machine assistance we’ll have – to put real meaning around the data and guidance for our business clients.

There will be massive changes in how we perform audits. “Sampling” will fall by the wayside as data can be ingested and catalogued in total, thanks to the computing power we have today. The concept of the continuous, real-time audit will come into play, and we’ll be assisted in our judgments – although the human element won’t entirely disappear. Fraud detection will be easier and far faster. Blockchain will move the auditor’s role away from having to check transaction data, and it will be used to test audit assertions as well.

The next 20 years will see the profession evolve very rapidly. In short, it will be a very different profession from what we see today. Everything that we do will be different.

These are exciting times. Our biggest challenge may simply be managing the pace of change. On the positive side, we should be able to move where we want to go – beyond compliance work to becoming truly trusted business partners for our clients that can help them grow their businesses. Disruption provides opportunity for those who see it – and adjust.

Apple, iPhone and iCloud are trademarks of Apple Inc., registered in the U.S. and other countries.
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