The future of accounting is here: is the profession ready?

Virtual firms such as Canada’s Live CA LLP are accounting’s new frontier.

By the time Josh Zweig (above, left) flew from Tel Aviv to Halifax to meet his business partner, Chad Davis (above, right), in person for the first time, the two accountants had been working together for three months, and Davis already had access to Zweig’s bank account.

It’s not your typical startup story. Zweig and Davis’s company, LiveCA LLP, is Canada’s first online-only accounting firm. The partners and their seven full-time employees all work from home. They meet clients via webcam. They handle files and track projects in the cloud. And they wouldn’t have it any other way.

Zweig and Davis found each other online (where else?) in 2013 through a mutual LinkedIn connection. Both had expertise in cloud-accounting practices, and both saw opportunity in the new generation of mobile entrepreneurs.

They’re not alone. Spurred by advancements in technology, virtual firms such as LiveCA are accounting’s new frontier. The approach has made the most headway in Australia and New Zealand, where virtual firms are considered legitimate. (Perhaps a sign of things to come, Deloitte bought Curtis McLean, a cloud-focused firm in New Zealand, in late 2013.)

Office politics

In Canada, the rules of professional conduct require an accountant to maintain at least a part-time office, so that people have a place to meet, says Gary Hannaford, FCPA, FCA, chair of CPA Canada’s Public Trust Committee. He reviews international standards on virtual firms and develops recommendations for Canada.

“Providing professional services electronically is certainly becoming more common as clients’ demands evolve,” says Hannaford. “We need to determine how this work can be carried out effectively but in a way that protects the public.” And that is exactly what the profession plans to do.

Potential problems go beyond professional regulatory issues. There may be questions of legality when accounting firms operate outside their jurisdictions, and concerns about privacy laws and online security.

There’s also the question of accountability. How would clients file complaints against virtual firms from other jurisdictions?

“These are the issues that make this type of practice a potential concern for regulators and the public,” says Rod Barr, FCPA, FCA, president and CEO of CPA Ontario. “That’s not to say that these issues can’t be addressed, but they need to be carefully considered, and steps should be taken to mitigate the risks.”

While the CPA profession starts its exploration of virtual firms, Zweig and Davis are building their company and raising awareness.

“Our incentive is to legitimize this way of doing business and help modernize the way the profession is viewed,” says Zweig. “CPA is rebranding, and it’s an amazing opportunity to create a new image of the CPA as tech-savvy and someone who can address and add value to some of the business issues of today.”