عرض العناصر حسب علامة : KPMG
الخميس, 23 سبتمبر 2021 11:36
كي بي ام جي تطلق أداة مجانية للتنوع في مجالس إدارات الشركات
أعلنت شركة KPMG عن إطلاق أداة قياس الافصاح عن تنوع مجلس الإدارة
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المحتوى بالإنجليزية
Big Four firm KPMG has announced the launch of its Board Diversity Disclosure Benchmarking Tool. Powered by ESGAUGE, the free tool lets corporate leaders, investors, staff and other professionals compare corporate board diversity practices by sector, index (Russell 3000 and S&P 500) and company size in order to best analyze trends.
The tool looks to give professionals more readily available information on board diversity policies and demographics. Board diversity information was previously available exclusively through company-by-company review of proxies and other public company disclosures.
“Diverse boards are more effective, and disclosure drives action,” said Susan Angele, senior advisor at the KPMG Board Leadership Center, in a statement. “As stakeholder calls continue to grow for disclosure of board diversity as well as policies and practices, this tool will help measure progress and highlight gaps.”
The KPMG Board Leadership Center utilized the Benchmarking Tool to analyze board diversity practices as of Jan. 31, 2021. Notable findings included:
While 98% of Russell 3000 companies refer to diversity in their director search criteria (an SEC rule), only 67 percent specify gender diversity and only 61 percent specify racial or ethnic diversity in their board composition.
Approximately 26 percent of Russell 3000 companies disclose the proportion of board members who are female, compared to 59 percent of S&P 500 companies.
Eight percent of Russell 3000 companies report the proportion of board members who are racially or ethnically diverse, compared to 25 percent of S&P 500 companies.
Only 1 percent of Russell 3000 companies and 2 percent of S&P 500 companies disclose the self-reported sexual orientation of their directors.
For more information on the Board Diversity Disclosure Benchmarking Tool, head to KPMG's site here.
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الخميس, 16 سبتمبر 2021 10:15
كي بي ام جي تطلق سياسات عمل مريحة لمكافحة إجهاد العمل عن بُعد
في حين أن ضغوط العام الماضي من العمل عن بُعد كان بلا شك مثيرًا للقلق بالنسبة لمهنة المحاسبة
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المحتوى بالإنجليزية
KPMG launches relaxed work policies to combat remote work fatigue
While the stress of a year (and counting) of remote work has undoubtedly been anxiety-provoking for the accounting profession, a significant number of firm leaders have taken the unique opportunity presented to them to reassess workplace practices and introduce new policies to help staff work more efficiently.
Big Four firm KPMG has joined these efforts by utilizing staff feedback during the pandemic to debut new work policies that decrease work-related stress.
"Since the start of the pandemic, the firm has employed a continuous listening approach, using regular experience surveys and other feedback channels to stay connected with people and better understand the challenges they’re facing and support they need," a KPMG spokesman told Accounting Today. "Recent survey feedback showed that our employees, like so many other workforces across the globe, continue to face challenges around well-being and resilience. In response, we decided to immediately implement these small, but impactful changes in the hope that we can better support our people to disconnect, recharge and manage stress."
While these policies are not formal, the firm says that "people can make these changes the rule versus the exception, but we recognize there are circumstances when that may not be possible."
Some new policies include:
“Heads-down” time: The firm has blocked off every Wednesday, from 2:00 p.m. to 5:30 p.m. ET, to focus exclusively on work. Non-essential meetings are discouraged during this time.
Camera-free Fridays: Voice-only meetings are encouraged every Friday, with the aim of creating a "more relaxed transition into the weekend" by not requiring staff to appear on camera.
Shorter meetings: In an effort to curb back-to-back meetings and make more work time available throughout the day, KPMG changed the regular 30- and 60-minute blocks designed for meetings to 25 and 50 minutes, respectively.
Morning prep time: The firm is discouraging early morning meetings to give staff more time to prepare for their workdays. KPMG set the availability window on staff's calendars back one hour.
"So far, the early reaction has been very positive," the KPMG spokesman added. "These changes are still so new for us, so all of the feedback is anecdotal at this stage. Next month, we plan to survey people about their experience ... to ensure that the changes are working as intended and we want to be open to any adjustments that need to be taken as we move forward."
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الثلاثاء, 14 سبتمبر 2021 20:53
ابدأ بأتمتة العمليات الروبوتية
يقدم الخبراء نصائحهم حول تدريس هذه التكنولوجيا الناشئة.
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المحتوى بالإنجليزية
February 9, 2021
What faculty should know about Alteryx
November 10, 2020
Bring the remote work trend into your accounting classroom
TOPICS
Accounting Education
Technology
Emerging Technologies
Accounting firms are using up-and-coming technologies with the potential to change the business landscape forever. One technology gaining interest is robotic process automation (RPA), a tool that computerizes mundane, repetitive tasks and completes them far faster than humans could do manually.
Greg Fritsky, practice director – intelligent automation solutions at EisnerAmper LLP, spends much of his time evaluating clients’ processes and introducing them to emerging technologies, including RPA, which is already used extensively by his firm. In one case, he said, RPA automated a client's process that previously took 160 human hours a month to achieve but now takes minutes to complete.
Other large public accounting firms have also adopted RPA. Deloitte and PwC, for instance, use RPA software internally and within clients' organizations.
RPA "is something people should be learning and teaching," said Fritsky, who is based in New Jersey. "Accounting is changing and it is changing fast, and this is a tool worth more than a conversation."
Accounting faculty have taken notice, and many now believe that students should learn RPA, or at the very least, be familiar with what the technology can do. Students adept at RPA get "special opportunities to work in special groups" within accounting firms, particularly the Big Four, said David Wood, Ph.D., an accounting professor at Brigham Young University (BYU) in Provo, Utah. "Firms want technical skills, and RPA right now is one that is in particular demand."
BYU's School of Accountancy advisory board, made up of representatives from large public accounting firms, "encouraged us to put RPA into the curriculum," he added.
Get to know RPA
By handling boring, repetitive tasks once conducted by people, RPA allows staff to work on tasks that require higher-level critical thinking and analysis. While there's always the fear that technology will replace humans, RPA frees up time for more challenging work for intelligent professionals, especially new recruits, who are often asked to carry out more humdrum duties.
RPA also eliminates manual errors and offers faster, more accurate outcomes. "RPA is absolutely going to change the role of accountants for the better," Fritsky said.
RPA tools like UiPath, Blue Prism, and Automation Anywhere also allow CPAs and accounting students with little to no coding knowledge to build bots, using a drag-and-drop process. A "bot,” a set of instructions one can build within an RPA software program, tells a computer system to perform various tasks, usually in response to certain triggers. For instance, bots can be created to reformat data or copy data from one computer system to another, Wood said.
RPA can also help with onboarding by sending automated yet sophisticated replies to job seekers, noted Asher Curtis, Ph.D., associate professor and faculty director of the Master of Professional Accounting Program at the University of Washington in Seattle.
Bots can be programmed to gather tax data from clients and move that data into spreadsheets, said Richard Walstra, CPA (inactive), DBA, assistant professor of accounting at Dominican University in River Forest, Ill.
And, as Fritsky explained, RPA can help with audits by extracting data from client systems and then performing tests on 100% of the population of that data, making it an invaluable, accurate tool.
Walstra, who learned about RPA on YouTube, noted that other data analytics programs, such as Alteryx, Tableau, and Power BI, analyze data, whereas RPA mechanizes a routine task. The term “robotic process automation” may sound futuristic, bringing up visions of robots, he said, but “it’s really just a machine function.”
So far only a handful of software producers sell RPA licenses. These companies, including UiPath and Blue Prism, often provide online tutorials, training, certifications, and free software to universities, making it fairly easy for faculty to get up to speed. EisnerAmper uses UiPath for its easy-to-learn aspect, Fritsky said, and the accounting departments at BYU, the University of Washington, and Dominican University chose UiPath as well for similar reasons.
Fritsky, Curtis, Wood, and Walstra offer the following advice for incorporating RPA into your classes:
Keep it simple. When Fritsky tries to explain RPA to people and goes "too technical,” they lose interest, he said. He advised starting with this clear-cut description: RPA is simply a tool that can eliminate manual activities currently performed by people. "
Students will find it easier to comprehend RPA if they have some foundational knowledge first, he said. "If the students are really good at Excel and have some advanced understanding, they will understand RPA a lot faster,” he said.
Dive in. The best way to get up to speed with RPA is to simply find the time to learn about it. Jump in with both feet," Wood said. "You've got to start somewhere and students will respect you for trying."
To get started, view tutorials on various vendor sites, or join sites such as UiPath's Academic Alliance, or watch videos online. Just start to explore some videos, and become familiar with the basic structure and flow of RPA, Walstra advised. This video, for example, offers a clear overview of RPA. Another provides a simple example of RPA. And this one, from KPMG, “shows a quick walk-through of a full business process," he said.
Review some RPA cases in the EY Academic Resource Center (EYARC), stated Curtis, who has helped lead an RPA workshop for faculty at the EYARC Colloquium.
Learn from more experienced faculty. Many accounting professors, such as Walstra, Curtis, and Wood, are ahead of the curve in teaching students about RPA, so learn from their expertise or the knowledge of other academics who are immersed in this technology. "Don't re-create the wheel," Wood said. "Talk with faculty who have done this before, by piggybacking on what they do."
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الأحد, 12 سبتمبر 2021 14:27
برايس ووترهاوس PwC تتصدر قائمة أفضل شركات المحاسبة Vault لعام 2022
أصدر موقع Vault.com الخاص بالوظائف عبر الإنترنت قائمته لعام 2022 المحاسبة 50، وهو تصنيف سنوي لأفضل شركات المحاسبة للعمل بناءً على ملاحظات محترفي المحاسبة، مع تصدر شركة PwC.
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المحتوى بالإنجليزية
PwC tops Vault's 2022 'Accounting 50' list
By Sean McCabe
April 16, 2021, 3:35 p.m. EDT
1 Min Read
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Online career resource Vault.com released its 2022 Accounting 50 list, an annual ranking of the best accounting firms to work for based on accounting professionals' feedback, with Big Four firm PricewaterhouseCoopers topping the list.
Rankings were based on feedback from some 11,400 accounting professionals, who were asked to rate the firms on categories such as compensation, culture, training, work-life balance and overall prestige. The Accounting 50 list was then compiled using a weighted formula based on the internal and external rankings.
Vault’s survey also took special note of last year's events to determine their rankings, asking professionals about their firms’ responses to the COVID-19 pandemic and the Black Lives Matter movement.
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Big Four firms PwC, Deloitte and KPMG placed first through third, respectively. Their fellow Big Four firm Ernst & Young placed No. 29 out of 50.
The top 10 firms of the 2022 Vault Accounting 50 are:
1. PwC
2. Deloitte
3. KPMG
4. BDO USA
5. Plante Moran
6. RSM US
7. Baker Tilly US
8. Moss Adams
9. CohnReznick
10. CBIZ MHM
For the full list, head to Vault's site here.
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الأربعاء, 18 أغسطس 2021 11:06
نظرة جديدة على جودة التدقيق
يمكن أن يكون اختبار كشوف المرتبات أثناء التدقيق عملية يدوية مملة، وهو نوع من العمل الشاق الذي لطالما كان يُنظر إليه على أنه "مستحقات" يدفعها المدققون الشباب قبل أن يتقدموا في حياتهم المهنية
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المحتوى بالإنجليزية
A new eye on audit quality
By Daniel Hood
March 29, 2021, 9:00 a.m. EDT
18 Min Read
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Testing payroll during an audit can be a tedious manual process, the kind of grunt work that has long been viewed as the “dues” paid by young auditors before they advance in their careers. Recently, however, one computer-savvy associate at PwC decided not to pay those dues.
Instead, the associate — “someone at the most junior levels of an audit team,” according to vice chair and assurance leader Wes Bricker — built their own computer model to quickly evaluate the reasonableness and appropriateness of any given payroll expense. And rather than hand out a stern warning against deviating from long-established audit processes, PwC sent the associate’s data workflow and visualization tool to its Digital Lab for vetting, and then rolled it out for use by all of its audit teams. To date, the Digital Lab has shared approximately 7,500 of these “citizen-led” digital assets across the firm.
Welcome to the new world of auditing, where people and technology are inextricably intertwined, leading to audits that are faster and more efficient and, perhaps most important, creating the opportunity for major improvements in audit quality.
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Faster first, then better?
The last decade has seen a significant increase in the audit profession’s adoption of a range of software and hardware solutions that have reduced or eliminated a great many manual tasks, streamlined data collection and other audit processes, and given auditors a new level of flexibility. Whether intentional or not, the primary result of this increased adoption has been efficiency gains, with firms able to conduct audits more quickly and with fewer people.
“Firms have been investing heavily over the past several years in several different advanced technologies to enable both remote work and automation of basic tasks, much of which goes to efficiency,” said Julie Bell Lindsay, the executive director of the Center for Audit Quality.
Besides producing general efficiency gains, the investment also paid off in allowing auditors to switch to working remotely during the COVID-19 pandemic, and spurred even further adoption of new technologies. “The rapid acceleration to remote work in the past year due to the pandemic has also led to increasing creativity by firms, such as using cameras and livestream technology to test inventory without a site visit,” said Erik Asgeirsson, the president and CEO of CPA.com.
Using drones or smart glasses to check inventory without visiting a client’s warehouse, or using APIs to gather their financial data more quickly, or building a bespoke tool to automate payroll testing are all great examples of using technology to streamline an audit, and they’re certainly valuable.
But do they make an audit better?
Experts in the field are quick to point out that they create the possibility of making the audit better. “The more we can make mundane processes automated,” explained Tim Landry, an assurance services partner in the national quality control group and assurance applications technology leader at Top 100 Firm Marcum, “the more we’ll free our teams up to use their brainpower and knowledge.”
Time, energy and expertise once spent on rote tasks can be redirected toward higher-value work on the audit — and many people assume that it will — but it can also simply allow firms to take on more audits, or to get by with fewer staff.
There are some ways, though, that efficiency gains do contribute directly to audit quality. “The increasing automation of inputs enabled by the cloud and intelligent workflows reduces redundant, manual data entry, which can introduce error,” noted Asgeirsson. Fewer fat-finger errors is a clear plus, as is the consistency of calculation, tabulation and so on that comes with taking tasks like that out of human hands.
And at their best, efficiency technologies empower audit staff and augment their capabilities, which can only have positive results for quality. As Bricker puts it, “Automation is how technology can harness points in the audit process to achieve synergy between our people and the machines that they use, so that the sum is greater than those individual parts.”
While the boost to audit quality from technologies that are primarily efficiency-related is — or can be — real, it’s not where the biggest potential gains lie.
“I think there’s no single area in the audit that can’t be improved by technology,” said Christian Peo, national managing partner of audit quality and professional practice at Big Four firm KPMG. “The field is ripe; it is ready for further incremental improvements.”
For the present, the biggest potential seems to lie in four areas, where audit firms have already begun applying technology to good effect: consistency and standardization, initial risk assessment, better and deeper use of data analytics capabilities, and the use of artificial intelligence.
Really SALY
“Same As Last Year” has become something of a euphemism for the thoughtless repetition in audit processes, but standardization and consistency in repetition can actually contribute to audit quality.
“Robotic process automation software is often associated with driving efficiencies, but is also used to drive consistency and ensure a higher volume of work is done accurately, from the perspective that repetitive tasks that were previously done by humans can be automated, thereby eliminating the potential for human error,” said Tammy Mooney, senior director of audit innovation at the American Institute of CPAs.
At an even higher level, establishing high-quality procedures and then ensuring their regular application through audit systems can make sure that all audit work is done at the highest level.
“Standardization is about taking a look at where we can work at scale on a centralized basis,” explained PwC’s Bricker. “It’s not a cost decision — it’s about consistency of execution, which contributes to quality.”
A prime example of this kind of higher-level standardization pushing audit work to a higher level is KPMG’s centralized audit platform, KPMG Clara (based on the Latin “clarus” for “bright” or “clear”). “Clara is probably our most important technology, and that’s because it not only is the workflow and drives the auditor to apply the methodology that is consistent with the standards, but it also is the platform to allow for other technologies to be embedded in and incorporated into our audit methodology,” said Peo. “You can create all kinds of technology, but if they’re not really embedded in your audit methodology and they’re just sitting on a shelf waiting for an audit team to pull them off the shelf and use them, then it won’t be consistently used, and it actually might not be used quite correctly if it’s not incorporated into your audit methodology.”
In a similar vein, the professionwide Dynamic Audit Solution project led by the American Institute of CPAs, CPA.com and CaseWare International aims to embed a brand-new audit methodology into a software application that will, among other things, make sure the methodology is consistently applied from one audit to another, while not succumbing to the mindless repetition of SALY. The project aims to release its first iteration this year; the three partners have already released a number of attest tools that offer the same type of consistency of approach in their OnPoint A&A Suite.
A focus on risk
The risk assessment phase that helps kick off every audit needs all the improvement it can get, according to Cathy Rowe, vice president of product management at Wolters Kluwer Tax & Accounting US, thanks in part to changes three years ago in the peer review process for audit firms that place it under heavy scrutiny.
“What firms did before is no longer going to be good enough,” she warned. “Firms had to adopt the right methodology to drive assessing risk and doing that linkage, and assessing risk at the assertion level, and making sure that every audit had a specific risk. Now we’re nearing the end of that three-year period this fall, and I think the real call to action for firm is, are they following the risk assessment standards, and if they’re not, they need to, because it will have a direct impact on their audit quality and on the success of their future peer review.”
Top 100 Firm Baker Newman Noyes has implemented technology in part to help it systematize and deepen its approach to risk, according to Patrick Morin, principal of information systems and risk assurance. “We rolled out a new methodology that we subscribe to, and what the solution does is require the auditor to more formally document all of the risks for the engagement, based on the nature of the client and the industry they’re in and the type of accounting activities, and integrate that risk assessment with the all of the underlying software applications and their databases as well as their operating systems. Then you need to brainstorm what the risks are, enumerate the controls, and then, based on all that, test it.”
“Basically, it forces the auditor to make sure that they’ve looked at everything from the controls side, from the business process as well as the IT process, and where those intersect,” he explained. “The tool allows us to ensure that we’ve been thorough and by default have a much more effective audit, and it makes us prioritize where we put the most effort on our jobs.”
A risk-based audit methodology backed by technology is critical for improving the quality of risk assessments, according to Rowe, “so that you have a higher emphasis in the planning process and having that understanding of your client to identify the risks that are unique for that client based on the data that you’re getting in, and being able to then tailor your engagement for that client for the risks that you have identified, being able to have that linkage between the steps that you do and the risk — really having a purpose for what you’re doing and why.”
Cloud storage, better data pipelines and related technologies are enabling earlier and more complete data acquisition for audit teams, contributing significantly to better risk assessment. “This capability, along with expanded data analysis capabilities, can significantly improve the auditor’s understanding of the entity and provide for an enhanced risk assessment process,” said the AICPA’s Mooney. “In other words, the tools can assist the auditor in gaining a deeper understanding of the entity, better identify risks (or transactions that occurred due to the risk) and focus on what matters most in the audit.”
But risk assessment isn’t the only area where improvements to auditors’ ability to acquire and manipulate data can make a difference to quality.
Big on data
At Marcum, data analytics are so important that the firm has set up a standalone group, the Data Solutions Center, which specializes in data analysis tools and testing.
“We’ve built this team and bolted it on as a service to the audit group,” explained partner and chief information and digital officer Peter Scavuzzo. “The audit group sends over data, and the team is doing hundreds and hundreds of analytics for all these audits, with pure data analytic competency – and they give it back to the auditors, consistently at the same level of quality.”
The DSC has a library of test templates, and if an auditor on an engagement wants a new test run, it gets sent to the firm’s audit transformation team for review before getting added as a template for all audit teams to use. “As someone comes up with a new test, 900 other people may have an interest in it, and they can look at the list and say, ‘I love that test,’” said Scavuzzo.
Its sole focus on data analytics gives the DSC a level of expertise that the average auditor can’t hope to match; it has been so successful that Marcum has made its capabilities available to its advisory and tax departments, and is considering offering its services to clients. “We have even had a couple of accounting firms that have approached us about sending their audit work to our solution center,” Scavuzzo noted. “Maybe it’s not a terrible idea.”
According to Peo, KPMG is in the pilot stages of getting transaction-level detail and doing transaction-level scoring on it — “really taking a look at detailed transactions, so you’ll get all of the ledger detail of, say, revenue transactions, and instead of having an individual look at revenue at a top level and come up with, ‘Well, this is what I think from a complexity standpoint,’ and all the factors that are in the standard that tell you this is how you think about the level of risk and how you respond to it, the routines that we run that data through can spit out an answer that is then consistent across all of the audits.”
“Analytics is a clear example of what you can do now,” added Wolters Kluwer’s Rowe. “Being able to get comfortable with working your clients’ data so that you can really validate the estimates that you’re making; you can do your sampling much faster; you can have a consistent process for your entire firm in terms of running the analytics and executing the steps much faster, and being able to work with 100 percent of the data, so that you are moving away from looking for a needle in a haystack to having the data kind of tell the story for the auditor.”
Besides testing, there are opportunities in bringing together disparate sets of data. “You’ll see things you never thought you’d see from multiple data sets,” said Scavuzzo. “Auditors can take AP by itself or cash by itself, but there are aspects of relationships between all those when they are aggregated all together, and a different rule set could surface other, different insights.”
Nontraditional data sources also offer opportunities for better-quality audits. According to the CAQ’s Lindsay, auditors are now using machine learning tools to scan third-party-verified reviews of a company’s products to assess whether the company’s warranty reserve liabilities are accurate and sufficient. “In other words,” she said, “is what the company is saying they need from a warranty reserve liability accurate with how customers are perceiving the product? It’s allowing a broader review of information that only further improves the overall quality of the audit.”
Mention of machine learning naturally leads to its cousin, artificial intelligence, the fourth major area where audit quality is likely to see major gains.
Just the beginning
AI and machine learning is being applied all across the accounting profession, not just in auditing, but in many ways they are still in their early days.
“One of the future aspects that firms are going to need to start looking into — and we’ve done this to some degree — is cognitive computing, the simulation of human thought and the use of human models, like AI,” said Marcum’s Landry. “If we can train a program that is AI-based to read documents and summarize them based on parameters we establish, you can take the time away from our associates and run it through this system and have them spend more time looking at the accounting aspects of what is found through the AI technology, rather than having them sit there and read 600 pages.” He noted, though, the cognitive systems require a lot of training, and must be continuously fed new examples until they understand what they’re looking for.
KPMG actually has a tool in a pilot phase to read contracts and business agreements, looking for audit-relevant information. “A two-page contract is easier for someone to read through, but when you get to a thousand-page contract, a loan agreement, a debt agreement — those are hard to go through, and very labor-intensive,” said Peo. “Having technology read through those documents much faster than a human could and identify key terms — it’s a great tool for us.”
It’s important to remember that in many cases auditors won’t just use a technology — they may need to audit them, as well. All sorts of organizations are or will soon be using AI in business-critical functions, according to Brian Fox, the founder of Confirmation and vice president of strategic partnerships in the tax & accounting business of Thomson Reuters, and an emerging company called Monitaur aims to give auditors the ability to audit an AI-based system, he said.
Most algorithms are static, so an auditor can test them and be comfortable that they’re operating as they would have earlier in the year, but artificial intelligence changes over time, so that an AI tool at a bank might make different lending decisions in December than it did in June.
“AI decision-making changes and is updated as it learns over time,” Fox said. “Therefore, the auditor needs the ability to verify at the end of the year whether the AI made the correct decision in the middle of the year, even though it might have made a different decision now given what it has learned since the historical point in time.”
Into the future
As important as these four areas are, they are hardly the only ones where technology can improve the quality of audits. Staff and client collaboration tools, for instance, are already beginning to allow firms to better deploy their human capital, making sure that the right auditor is assigned to the right engagement.
Nor have they taken their final shape; as technologies of all kind advance, their ability to improve the quality of audits will advance as well.
In some cases, this will be a matter of combining two different developing solutions. “With data analytics powered by machine learning, we’ll eventually see the development of more precise risk assessment and benchmarking to spot anomalies that may require further confirmation or exploration,” noted CPA.com’s Asgeirsson.
“What’s coming down the line is how we can augment the auditor with artificial intelligence,” added Wolters Kluwer’s Rowe, “taking the story with our data, and layering on artificial intelligence to be predictive in terms of what risks you may want to consider or similar clients may have had similar risks in that industry, and also being more predictive in terms of what are the best steps to address those risks.”
PwC’s Bricker, meanwhile, sees potential in enhancements to the structuring and formatting of financial data at earlier stages in the process. “I think the next step change is really framed around digitization of corporate reporting and business reporting,” he said. “We’ve had digital representations of financial statements and audit reports for years, but over the last 15 years, we’ve increasingly structured that content. We’ve structured that content at the point of disclosure — that’s the XBRL and 10-K filings and so forth — there’s more and more opportunity to structure it at earlier points in the process, from point of entry in accounting systems to flow the whole way through reporting. Those innovations impact the preparation of information, which then impacts the auditing of that information.”
Looking further down the road, many experts believe that blockchain has the potential to have a major impact on auditing — just not yet. The distributed ledger technology includes features that make it practically impossible to change or falsify earlier information, or to disguise who is adding records to the system, which has obvious benefits for auditors, but it’s still far from widespread adoption in the broad corporate world.
“When distributed ledger hits mainstream, we will perhaps see a seismic shift in audit quality, and to some degree, some audit needs will go away and the emphasis of audit will change,” said Baker Newman Noyes’ Morin. “We’ll be looking more at the ethical application of the tools that leverage distributed ledger, as well as maybe audit compliance to other attributes other than just the numbers themselves.”
Marcum’s Scavuzzo similarly feels that blockchain may be a game changer, but that its impact isn’t likely to be felt in the next three to five years.
More immediate potential for improvement to audit quality, though, is seen in the ability to move closer and closer to a real-time audit, as finance and accounting systems get faster, and auditors gain access to them on a more regular basis.
“We really only audit at the end of the year, but we know the financial markets move substantially every quarter that a company releases its earning statements,” said Thomson Reuters’ Fox. “For the first time, technology is going to allow us to do full quarterly audits or semiannual audits. You could do monthly, you could go to weekly and daily; you get into the continuous audit.”
That ability to see where a company stands at any point, and what mistakes it may be making in reporting or new activities it may be undertaking, can let an auditor intervene earlier or being to prepare for new challenges; as a window into what’s going on, it also gives the auditor ever-greater opportunities for catching fraud at all levels, and adding value to an audit.
“Right now, we clearly have to tackle material misstatements due to fraud; we’re missing those in droves and we’re getting a black eye,” said Fox. “If and when we get to the point where we’re really good at finding material misstatements due to fraud, then the next layer is, let’s cut out employee theft, let’s cut out those types of fraud, and hopefully continue to get smaller and smaller and drive it out. That’s the ultimate goal.”
That goal may be far down the road, but it’s never too early to start preparing for it.
“We have to think ahead for the next 10 to 15 years,” said Marcum’s Landry. “The way we audit now is going to be completely different from how we audit in the future. Now is the time to find efficiencies and improve audit quality by implementing new techniques and new approaches.”
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تكنولوجيا المعلومات
موسومة تحت
الإثنين, 16 أغسطس 2021 14:53
المشاورة العامة لمنهجية موحدة لمحاسبة رأس المال الطبيعي للأعمال
المشاورات العامة حول منهجية محاسبة رأس المال الطبيعي الموحدة الشفافة مفتوحة الآن من 28 يوليو إلى 30 سبتمبر.
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المحتوى بالإنجليزية
Transparent is an EU LIFE funded project that will develop standardized natural capital accounting and valuation principles for business in line with the ambition of the European Green Deal.
The public consultation on the Transparent Standardized Natural Capital Accounting methodology is now open and will run from July 28 to September 30. Participate in the consultation and help to shape European legislation.
Only a tiny fraction of the current global economy can be considered to be sustainable according to leading financial institutions and multinational agencies, but the EU has set out an ambition to achieve a sustainable financial system and economy by 2050.
The EU has recognized that in order to achieve this ambition, a shift is required in the way that businesses understand and account for their relationships with nature and people, and that accounting for the value of nature in decision making is crucial to achieve this shift.
The lack of a comprehensive sustainable management system and standardization across corporate environmental assessment methods – including natural capital standards and practices – continues to hamper the mainstreaming of sustainable economic activity across Europe and the rest of the world.
In order to enable this shift, the business community is calling for holistic datasets and standardized methodologies that allow them to include the value of nature and people in their internal decision making and their external disclosure. Integrated datasets will also enable businesses to better understand how best to align their organizations with broad societal ambitions such as the European Green Deal and the Sustainable Development Goals.
Through the Transparent Project, the Value Balancing Alliance – consisting of international companies and supported by pro bono consultants from the four largest professional services firms (Deloitte, EY, KPMG & PwC) – and the Capitals Coalition – a global collaboration of more than 370 organizations – have joined forces with the World Business Council for Sustainable Development (WBCSD) to develop a set of natural capital accounting principles to business to empower the private sector and to enable a shift towards a more sustainable financial and economic system.
In line with the European Green Deal, we will develop a standardized natural capital accounting and valuation methodology that provides decision-makers with the information necessary to generate long-term value and to improve business resilience while providing a clear picture of the overall impacts and dependencies of businesses on the environment, communities and broader society.
The Transparent methodology will achieve this by integrating financial and environmental information and accounts. It will encourage companies to better manage environmental risks and opportunities and apply best practice in order to establish a prescriptive industry standard that generates widely comparable results.
The model will build on international accepted and harmonized principles and frameworks such as the Natural Capital Protocol, and other approaches used by international companies, such as those highlighted by the Value Balancing Alliance.
The Transparent project is targeting a widespread adoption by companies worldwide.
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محاسبة و مراجعة
موسومة تحت
الأربعاء, 14 يوليو 2021 12:49
كي بي ام جي KPMG توسع الخدمات البيئية والاجتماعية والحوكمة
تعمل KPMG على زيادة جهودها لتوفير الخدمات البيئية والاجتماعية والحوكمة للعملاء من خلال مبادرة جديدة تسمى KPMG Impact.
معلومات إضافية
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المحتوى بالإنجليزية
KPMG has been increasing its efforts to provide environmental, social and governance services to clients through a new initiative called KPMG Impact.
The team will help clients improve their ESG performance while also carrying out KPMG’s own ESG commitments. Last year, KPMG U.S. worked with other businesses, investors, standard-setters, non-governmental organizations and international organizations through the World Economic Forum to create a set of 21 core metrics for companies to disclose their progress in the ESG areas of people, planet, prosperity and governance. KPMG has adopted those same metrics to guide its actions and measure and report its progress.
The move comes as more accounting firms wade into providing ESG reporting and assurance services for clients. ESG funds have become a popular vehicle for investors, and the Securities and Exchange Commission is weighing requirements for climate risk disclosures by companies. At the same time, at the global level, securities regulators around the world are pushing for greater consistency in reporting ESG metrics, encouraging standard-setters to align their various standards and frameworks more closely together. The International Financial Reporting Standards Foundation has been working on creating a proposed International Sustainability Standards Board that it would oversee alongside the International Accounting Standards Board. IFRS Foundation trustees explained how the structure would work during a webinar Wednesday.
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This move toward greater sustainability reporting and assurance is one that KPMG has already been working on for years, but it’s taken on greater urgency as climate change risks appear to have grown with rising temperatures seen in the U.S. and across the globe.
The offices of KPMG in ChicagoTANNEN MAURY`/BLOOMBERG NEWS
“At the highest level for us, the backdrop for the rise of ESG is it’s all about trust,” said KPMG Impact leader Rob Fisher. “You see people looking to business as an ethical and effective leader to bring ESG aspirations to life, and the recent decline in trust that we see across institutions like government and media and so on affects our ability to come together and solve problems. That’s why a focus on organizations doing well across environmental, social and governance dimensions can really build trust with customers, employees, investors, regulators and really all stakeholders. We think ESG engagement will make businesses better by unlocking new value, building resilience and driving profitable and measurable growth both today and tomorrow.”
He has been working with clients on taking individual approaches to ESG reporting. “As I think about specific client conversations that I’m having, it’s that every business across all industries is on a unique ESG journey that reflects its stakeholders, challenges and opportunities,” said Fisher. “Effective engagement really has to be embedded throughout a company’s entire strategy and operations. Many of the clients we are working with are actually the leaders in their industries in areas like climate, the environment, social justice and so on, but they’re still looking for our help in how they bring it all together and figuring out the opportunities to improve.”
ESG encompasses not only the environment, but also social initiatives like diversity, equity and inclusion, and the firm is helping clients with those efforts as well. That includes providing assurance services.
“There are four big buckets of work that we’re doing for clients,” said Fisher. “One, we’re helping clients develop a broader ESG strategy, and then the second part is how do you operationalize that strategy. We’re seeing a lot of interesting opportunities around transformational opportunities and the ability to create some value, and we’re really seeing financial institutions and private equity leaning in because of that. There’s a ton of investor demand in that regard. The fourth bucket is around helping companies figure out how to measure it, report it, and assure it. Certainly there are a number of different standards and different frameworks and metrics for reporting ESG data, and we’re really working with clients to help them understand, based on perhaps the specific interests of particular investors or the industry that they’re in, what frameworks are going to make the most sense to help them develop capabilities to measure their return on their ESG [efforts]. You want it to be accurate and fit for purpose disclosure type of reporting.”
Last month, KPMG submitted a comment letter to the SEC in response to the SEC’s request for public input on climate change disclosures. “Ours is really about a building block approach at a high level,” said Fisher. “We support a global baseline. Then there would be supplemental standards to serve specific jurisdictional needs. I think the importance of some sort of consistency at the global level is that, if we don’t have that, disclosures will be less consistent and comparable. Registrants are operating across multiple jurisdictions and their supply chains and their customer base are certainly going to be global. We really think it has to start with a baseline and then additional disclosures that would be necessary in the context of the U.S.”
Becker Professional Education has been seeing growing demand for its Continuing Professional Education courses on ESG, with Tim Gearty, national director and editor-in-chief at Becker, conducting 40 to 50 sessions per month on ESG for companies across industries.
“Europe seems to be taking the lead on this,” said Gearty. “We in the United States are catching up quickly, but the European Union clearly took the lead on this, and they’re pushing ahead. We’re still in a catchup mode, but we have a lot of great thought leaders that are working very diligently to make sure that our standards are ultimately measurable and that assurance can be given to them. One of the critical items is we have to be able to measure those standards both qualitatively and quantitatively before assurance can be given.”
Groups like the American Institute of CPAs, the Institute of Management Accountants, the International Federation of Accountants, and the Association of Chartered Certified Accountants have been encouraging members to get involved in ESG reporting. The ACCA published a new report Wednesday, “Rethinking Risk for the Future,” examining the role of the accounting profession in effective risk management amid the crises presented by climate change, the COVID-19 pandemic, and the resulting economic turbulence. The report discusses how accountants can help organizations not only detect and better understand the emerging risks and opportunities facing them, but also cultivate the mindsets needed to think in more of a long-term perspective.
The IFRS Foundation is aiming to establish the proposed International Sustainability Standards Board by November in time for the United Nations COP26 Climate Change Conference in Scotland, after recently receiving endorsements from the G-7 finance ministers and the International Organization of Securities Commissions. “There is a timeline we are working toward,” said IFRS Foundation vice-chair Larry Leva during Wednesday’s webinar. “There are now less than four months until the COP26 conference in November. ... We still have a tremendous amount of work ahead of us, but we remain on track to make a final decision in advance of the COP26 meeting in Glasgow. We have received a great deal of support and goodwill for this work, and there is a real determination to make this happen.”
“This is an area that our profession is best positioned to be working, whether it’s internally reporting on it or working externally to give assurance on it,” said Gearty. “We’re understanding the demand because the demand for ESG is coming from the SEC, national business councils, the World Economic Forum, the AICPA, the Global Reporting Initiative, the European Union, and of course asset managers for these funds. They’re all demanding standards, so whether it’s a sustainability fund or just a report that’s being issued by a company, they can be ultimately verifiable so the individuals in the public can rest assured that the information is accurate and not manipulated.”
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موضوعات متنوعة
موسومة تحت
الأربعاء, 21 سبتمبر 2022 12:50
استقالة رئيس شركة كي بي ام جي في المملكة المتحدة بعد أيام من انتقاده للموظفين
استقال رئيس شركة KPMG في المملكة المتحدة بعد أيام من إثارة غضب واسع النطاق لإخباره الموظفين بالتوقف عن الشكوى من الوباء
معلومات إضافية
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المحتوى بالإنجليزية
KPMG U.K. chair resigns days after slamming ‘victim card’ staff
By Michael Kapoor
February 12, 2021, 1:38 p.m. EST
KPMG’s U.K. chairman has resigned days after sparking widespread anger for telling employees to stop moaning about the pandemic.
Bill Michael, KPMG’s U.K. chair and senior partner since 2017, will leave the firm at the end of the month, admitting that his position had become “untenable.”
He had been placed under investigation after telling KPMG’s financial services consulting team to “stop moaning” and “playing the victim card” when employees voiced concern over possible cuts to their pay and pensions at a virtual meeting Monday.
Sean Gallup/Getty Images
“I love the firm and I am truly sorry that my words have caused hurt amongst my colleagues and for the impact the events of this week have had on them,” Michael said in an emailed statement Friday. “In light of that, I regard my position as untenable and so I have decided to leave the firm.”
Michael stepped aside from his position as chair on Wednesday for the duration of the investigation and apologized for his comments.
“It’s further evidence of a bullying culture and Bill Michael won’t be the only example of that,” said Prem Sikka, an accounting professor at Sheffield University. “They need to mend the culture and concentrate on improving audit quality rather than bullying staff.”
The pandemic has taken a toll on all professional services firms. KPMG said earlier this month that its partner profits would fall by 11 percent and it said in July, that it would cut as many as 200 jobs from its U.K. workforce.
Senior elected board member Bina Mehta has been named acting U.K. chair, with KPMG saying it would “undertake a leadership election in due course.” Mary O’Connor, KPMG’s head of clients and markets, will take over Michael’s role as senior partner.
“Bill has made a huge contribution to our firm over the last 30 years, especially over the last three years as chairman, and we wish him all the best for the future,” Mehta said.
The move comes as the so-called Big Four accounting firms have faced increasing criticism in Europe. Auditors are under greater scrutiny than ever after a series of high-profile lapses in recent years, with EY’s role in the collapse of German payments provider Wirecard AG now under the microscope.
In the U.K., KPMG has faced fierce criticism over its auditing of Carillion Plc, whose collapse prompted the government to launch a series of inquiries into auditing standards.
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موضوعات متنوعة
الأربعاء, 20 يناير 2021 13:03
فتح الصندوق الأسود للذكاء الاصطناعي
وصف في السبعينيات من القرن الماضي أستاذ الروبوتات في طوكيو ماساهيرو موري، كيف تبدو الآلات أكثر شبهاً بالإنسان
معلومات إضافية
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المحتوى بالإنجليزية
AI, applied: Opening the black box
By Ranica Arrowsmith
There’s a phrase for the uneasiness many of us feel when confronted with humanlike machines — the Uncanny Valley. Coined in the 1970s by Tokyo robotics professor Masahiro Mori, the phrase describes how as machines appear more humanlike, they become more appealing to humans — but only up to a point. After that, as they appear more humanlike but not quite, they inspire revulsion in the observer.
In the accounting profession, there is a similar uneasiness when dealing with the idea of AI, though it has nothing to with how the software looks. The technology has the potential for high-level automation of processes, ultimately saving a lot of time for the accountant, but with its ability to perform tasks that are traditionally the purview of human beings, does this mean a diminished role for the accountant, or even the loss of jobs?
The good news is, the experts don’t think so.
Justin Adams, whose company Anduin has just launched an AI-enabled accounts receivable platform, insists there is an “art” to billing that must remain in the AR process for it to be meaningful and profitable — the deep knowledge of a client over time, for example, can affect a billing relationship. And Samantha Bowling of Garbelman Winslow CPAs isn’t interested in simply speeding up the audit with AI — she wants to provide an audit of such high quality that it’s unquestionable. These types of service goals can only be achieved by marrying AI with the human professional, with all the professional’s experience, skepticism and emotional intelligence.
Artificial intelligence can have an air of mystery about it, to say nothing of a hint of the unnatural, with something we value as inherently human — intelligence — being created and inserted into something inanimate — a machine.
It makes sense that we feel this way. The programming precursor to what we today call artificial intelligence was neural networks, code that was inspired by and modeled on actual human neural networks in the brain. Today, artificially intelligent programs have the ability to observe patterns and use those to “learn” behaviors and responses, making the technology smarter and more usable over time.
It’s worth bearing in mind the various ways in which AI is already here, working in the background of the accounting and enterprise platforms you know well, automating processes and making software more efficient. All the user sees are the benefits. But the market is now seeing true AI platforms that apply machine learning to entire processes end to end, such as AR/AP. And the common theme among all use cases for such AI-rich platforms is time — the time it takes to adopt the software and to validate it, to train it enough for a firm to realize its benefits. The machine has to learn. This takes an investment both of money and patience, but for the willing, it’s worth it.
Today, artificial intelligence is transforming processes across the accounting profession, for those are ready to invest in and adopt it. It’s not just being practically applied in audit, where AI is being used for data analysis and anomaly detection — we will look at examples of AI transforming AR/AP, as well as explore the implications of AI in sales tax automation.
Accounts: Receivable
Despite … everything about this year, venture capital funding continued on an upward trend in 2020, with the third fiscal quarter bringing in the second highest amount of VC funding per quarter on record. Artificial intelligence is high on the list of hot tech, which makes it no surprise that Anduin was able to obtain seed funding and launch its first AI-powered product suite all during the COVID-19 pandemic.
Anduin co-founders Justin Adams and Pat Morrell have built an AI-driven accounts receivable platform, Intelligence-Based Billing, for accounting firms. The platform launched in December, so it remains to be seen how successful adoption will be, but the pair of entrepreneurs have succeeded before in the AI space. Prior to founding Anduin, Adams and Morrell started, grew and sold a company that made an AI-driven product for the health care space, all within two years. That whirlwind experience propelled them into their current venture, and their success made them attractive prospects for investors.
“We had zero health care background when we started Digitize.AI,” Morrell said. “But we went to CFOs of health care companies and asked them where their biggest pain point was. When they said ‘prior authorizations,’ I had to look it up on Wikipedia — but I knew that a manual process is a manual process, and can be automated.”
Adams and Morrell weren’t quite as clueless entering the accounting space. Adams had spent years working at Big Four firm PwC, first in a consultative capacity and then internally managing technology projects. When they asked accountants what they would change if they could wave a magic wand, accounts receivable was a common answer. The process, managed manually, is scattered and unwieldy, and even streamlined client portals don’t optimize the process for each individual client and their payment habits.
There’s an art to billing, Adams said, and the platform tries to preserve that for the accountant. “Think of it from a client’s perspective,” he said. “There’s tons of friction. It can be confusing. You could have received a service three months earlier, and when you get the invoice, you’re trying to remember what you’re paying for again.”
Intelligence-Based Billing is made up of four modules (which can be bought separately), handling invoicing, collection, payments and internal analytics. The platform automates the invoicing process so bills are sent in a timely manner, but it also learns a client’s payment habits over time. How many emails or messages does it take before an invoice is opened and viewed? How many contacts does it take before a client pays the bill? Each client is different, and therein lies the art. If a client typically pays an invoice after two emails and a phone call, Intelligence-Based Billing will “remember” that over time, optimizing the process for each firm-client relationship.
More “art” that the AI tries to replicate: The analytics feature can be used in part to automate, so to speak, that gut feeling accountants also have to pay attention to when it comes to value-based billing. For instance, Morrell pointed out, a firm may have worked a certain number of hours on a project, but with their sense of the market over the years, they know that a client might expect a certain discount. Each client perceives different aspects of a service as more valuable, and also might need different billing structures to remain a client in the long term. Intelligence-Based Billing pulls and analyzes data from across firm systems to inform this type of decision-making.
“The fundamental pain is the anxiety that firms are leaving money on the table; and that firms don’t have real visibility into their cash flows,” Morrell said. “On the partner level, it’s all about liberating them to focus on complex, creative, value-generating service delivery.”
Intelligence-Based Billing is new on the market, and is signing up “trailblazer firms” now as its first customers. Time will tell how successful it will be, but no matter what, Anduin is part of a small group of innovators bringing fully formed, AI-enabled automation to firms of all sizes, for everyday firm functions, and will help set the stage for what’s to come.
Accounts: Payable
Youngseung Kuk manages business outsourcing services for Top 100 Firm Armanino in Boise, Idaho. This year, Kuk spearheaded the implementation of Vic.ai, a platform that automates the accounts payable process using AI. Using AI to tackle AP for clients was “low-hanging fruit,” Kuk said, as all companies, no matter what type, have bills to pay.
Armanino uses Bill.com firmwide for all AP, so the firm worked with Vic.ai to integrate the software to make the end-to-end AP process more streamlined.
Kuk and his team are validating Vic.ai as they use it, adding clients slowly, one at a time, to make sure they give the program enough time to learn its clients and become highly efficient at its predictions. This is a key part of understanding AI — it takes time.
Software that runs on AI doesn’t operate like the software we’ve become accustomed to. It doesn’t perform an exact set of functions as programmed, and only as programmed. Artificial intelligence learns as it goes, which means that by the end of a certain period of time, the software will operate very differently for each client, each firm, each project.
Kuk estimates it will take Vic.ai three years to predict client behavior and needs at a close-to-perfect rate. The wait is worth it for the sheer amount of time it can give back to an accountant once the AP process for a client is basically fully automated.
Armanino has one client, a law firm, that has highly repetitive bills that don’t have too many complicated dimensions (i.e., company name, address, and so on, are usually in the same spot on the invoices). Within a few months of use, Vic.ai can now predict any given AP workflow for that client with about 80 percent accuracy. If this is true for this client, Kuk said, that’s enough to know it’s possible for the others. Currently, Armanino has 46 clients on Vic.ai, and plans to keep validating the software so it can add more in time.
“The time spent validating is worth it, because by the end, as a firm, we’re going to be so much more scalable,” Kuk said. “Once you free up some capacity, even just from an AP standpoint we can do a number of different things for our clients that add more value, like confirming all vendors have W-9s, for example, or reaching out to vendors proactively if they haven’t accepted an ACH payment. These are just some basic examples, but I think we’re at the tip of the iceberg and nowhere near the full potential of AI.”
“Two years ago, we made an investment in artificial intelligence in a big way. It became part of firmwide strategy,” explained Tom Mescall, partner-in-charge of consulting at the firm. “Most CEOs, CFOs and business operators know the headline of AI, but they don’t know how to apply it in a business setting. We’ve done a lot of work around demystifying AI and bringing real-world examples to light for clients.”
A relevant audit
Firms have been using AI products for anomaly detection and analytics in audit for a few years now. Companies like MindBridge AI came on the scene and started to show the profession the real-world implications of being able to read every piece of data in minutes, as opposed to just sampling data. Samantha Bowling, a partner at Garbelman Winslow CPAs, saw the opportunity in MindBridge AI three years ago, and brought the technology to her firm.
In 2017, while Bowling served on the Governing Council for the American Institute of CPAs, she listened to president and CEO Barry Melancon describe how Big Four firm KPMG was investing millions of dollars into AI-driven audit technology.
“He was talking about how they were going to take over the world,” Bowling recalled. “As a small-firm audit partner, I was concerned, because if the big firms are doing something, sometimes it doesn’t become available to us for a while, or ever. I was actually concerned about eventually having to find a new revenue source.”
She called her existing audit software provider and asked explicitly if they had plans to embed AI into their platform. They didn’t. So Bowling did some online research and found MindBridge AI.
Bowling says that Garbelman Winslow is still in the adoption phase of MindBridge. As is true with the other technologies featured here, there is no substitute for time to allow an artificial intelligence platform to live up to its true potential. She started by engaging MindBridge for just one audit, and then grew usage from there. It helped when MindBridge integrated with QuickBooks, which made data transfers easier.
The biggest benefit of applying artificial intelligence to audit, for Bowling, is the risk analysis.
“Now that there is a direct link between QuickBooks Online and MindBridge, it automatically connects and does the risk analysis,” Bowling said. “I used to think MindBridge was an audit stamping tool that looked at transactions and identified anomalies, directing our attention and telling us where to look. But I realized it’s actually a great risk assessment tool in the very beginning of an audit.”
Bowling explained that while audits are based in risk assessment, a lot of the time, auditors have no idea where the risk is. “We only have our professional skepticism — there’s no one to tell us the risk is in revenue or payroll,” she said. “Now we have something that tells us where it is at the outset. Audit assertions are built into it.”
But there is friction in adoption. Not every client is easy to work with in MindBridge. There is still a lot of manual work to be done to transfer data that is not in the cloud, for instance, to MindBridge AI’s platform.
“Everyone just wants it to be an easy thing — to upload the general ledger and get going — but I think they’d be remiss not to do this with at least one client, or start with their cloud-based clients first before going to challenging clients,” Bowling said. “People are looking for faster, better ways, but I went into this not to do a faster audit but a relevant audit.”
Bowling received CPA.com’s Innovative Practitioner Award in 2018 for her work bringing AI to Garbelman Winslow CPAs. She won in part for the fact that it is small business and nonprofit clients to which she is bringing AI-enabled services, which also has the side benefit of Bowling being able to pass the cost of using MindBridge to her clients by folding it into the billing package. Nonprofit clients don’t mind paying top dollar for service that guarantees an accurate risk assessment.
“Nonprofit clients don’t care about us passing the fee onto them to minimize risk as much as we do, because nonprofit board members are just worried about someone doing something wrong with the money and it being in the newspaper,” Bowling said. “So they’re happy to have a very good audit done, and pay for it.”
Every transaction in the world
When thinking about the application for artificial intelligence in tax, often we think about tax preparation, since there is a lot of room to automate it. In fact, Samantha Bowling said that if she could apply AI to any other service area at her firm, it would be tax: “The current process, with a mix of paper documents and e-returns, is asinine,” she said. “I can’t wait till the whole process is 100 percent automated.”
AI-related innovation in tax prep is moving slowly, although the Internal Revenue Service has started to use the technology in different capacities to detect tax evasion and other types of noncompliance. But of course, there are other areas of tax that are ripe for disruption with AI, and sales tax automation is one.
One of the companies working in this area, Avalara, has made investments in AI in recent years, one of which was acquiring Indix in 2019. Indix was based on an idea that founder Sanjay Parthasarathy had for creating a comprehensive index of retail product information online using artificial intelligence to aggregate the data. (The aggregator was built in layers, with a Google web crawler grabbing information from all over the internet, and then various smart algorithms working together to curate and organize that data.)
Brands and retailers could buy access to this database of information on mostly retail, but also some business-to-business, products, to enrich their catalogs, benchmark against competitors, and so on. Basically, Indix was built as a neutral aggregator of e-commerce inventory.
And now, Avalara owns that AI-built index of more than 4 billion products. This means that Avalara can fold categorization data for much of the world’s online inventory of products in with its tax content database, which includes international product codes and classifications; taxability rules; exemption conditions; tax holidays; jurisdictions; boundaries; tax rates; thresholds and registration, compliance, and return preparation and filing requirements.
If this list sounds daunting, that’s kind of the point: Avalara’s mission is to “to be a part of every transaction in the world.” Without AI enabling at least some of this technology, this would be an impossible goal.
“When you buy a tax compliance product or suite, you want to be able to start using it tomorrow,” said Parthasarathy, who now serves as chief product officer for Avalara. “However, you know that before you can use an automated system, you have to make sure the tax nexus is right, the catalog is mapped to the tax code, a set of things that take time and research. If you want to start selling internationally, and you therefore need to start using harmonized tax codes — if it’s going to take nine months to do it, that’s lost value. We can get you going right away.”
Before Parthasarathy founded Indix, he spent almost two decades at Microsoft. He ended his career there in 2009 as corporate vice president of the Startup Business Accelerator program, a program he created; and he was director of Bill Gates’ 1997 trip to India, which led to a significant investment in that country by the software giant.
When talking about historical AI, Parthasarathy will sometimes use the term neural networks, which are indeed the statistical model programs ancestor to what we call AI today. His knowledge of AI is deep and historical, from having spent so many years helping build one of the most innovative companies in recent history. From his vantage point, he sees both the immense possibilities of AI, as well as the risks.
“There are risks in tax — compliance has potential penalties if done incorrectly,” he commented. “You’re doing it on behalf of somebody, so you want to make sure it is accurate and appropriate. You probably want actual people to keep an eye on it, rather than let AI run everything, even if one day it can. There is an ethical risk — when you have all this data, what is the responsibility of the government and companies to treat it as private data?”
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الثلاثاء, 29 ديسمبر 2020 10:11
رئيس ضرائب كي بي ام جي يخطط للعام المضطرب المقبل
يتوقع نائب رئيس الضرائب في KPMG، جريج إنجل، عامًا آخر من التغييرات المضطربة في الوظيفة الضريبية للشركة
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