With the move to telecommuting, interactions with clients switched to video conferencing, replacing in-person meetings and phone calls (Getty Images/pixelfit)
The pandemic may not yet be behind us, but organizations have had to quickly adjust to the disruption and, in particular, the way business is now done. Accounting firms were no exception.
“Individuals, businesses—everyone had to adapt, because we could no longer do what we did before and no one knew what would happen next,” says CPA Ismail Akhter, associate director, member in practice, audit, assurance and reporting at CPA Canada. “As a result, decision-making accelerated, which benefitted those who were able to keep pace and be nimble.”
From reimagining auditing to speeding up digital transformation, here are a few of the changes that were spurred on by COVID-19.
1. INVESTMENT IN TECHNOLOGY
The lockdown began in mid-March, a few weeks before the income tax filing deadline. Even though the due date was eventually extended, that situation is an excellent example of the challenge that many small firms had to face—an urgent foray into the online world.
For Akhter, however, this is not a new issue. “Anybody who is not paperless right now is already losing the battle. Archiving, documentation … all this should have been done 10 years ago.”
However, he adds, there is no one-size-fits-all solution as every firm needs to determine how much they should invest in new technologies.
“Take a look at your clients and see if these investments will actually result in efficiencies,” says Akhter. “Just because everybody is going to the cloud, for example, that doesn’t mean it’s the right solution for you.”
In a report intended to make IT leaders more resilient while reimagining the future of work, Deloitte Canada makes several recommendations in this vein. These include adopting a cloud-first approach, making virtual collaboration the default and investing in remote-work capabilities.
“Major players in the industry, like us, invest millions in IT every year,” says Emilio B. Imbriglio, FCPA, FCA, president and CEO of Raymond Chabot Grant Thornton. “It can take years for some firms to reach the same level, on their own scale. That said, even modest investments in cloud computing or a client portal can have a significant impact.”
2. NEW DIGITAL RELATIONSHIPS
With the move to telecommuting, video conferencing began to replace in-person meetings and phone calls with clients, notes Akhter.
“We’ve always believed that important meetings had to take place in person. But do they really?” he says. “The person I’m speaking to doesn’t become less important just because they’re not physically in front of me.”
Imbriglio concurs. “Digital relationships are a challenge for companies like ours. We’re used to building a rapport based on trust, ethics and our code of conduct. It’s easier to take an existing relationship online than to approach a new client who has never heard of you.”
So, how do you establish trust and develop a good relationship with a new client or employee? “You can start with small gestures to break the ice, like simultaneously delivering a meal to every virtual meeting participant, wherever they may be,” he says. “We need to rethink the digital-human relationship.”
According to Akhter, the silver lining is that people already have technological tools that enable them to connect with others easily. “You no longer need to be at the office to organize something. You can do it right away and, more often than before, from home, thanks to platforms like Microsoft Teams. It provides an opportunity to become even more approachable as an adviser.”
3. ADAPTED AUDITING
It’s no secret the pandemic pushed many organizations to fast-track their digital transformation. And audit is a good example of this paradigm shift. Since auditors could no longer make on-site visits, they had to adapt.
This pushed Raymond Chabot Grant Thornton, a member of Grant Thornton International Ltd., to make greater use of its global network of over 56,000 employees across 140 countries. “Not only did we reduce our carbon footprint, but we also learned a lot, like how to conduct an audit remotely, both figuratively and literally. For example, we used drones for inventory counts,” says Imbriglio.
According to Akhter, drones have already been used on occasion, particularly to assist in counting inventory. But now, remote auditing has shifted into high gear, with third parties being called in to take the reins. “Was it feasible? Yes. Effective? Fairly. Reliable? Well, basing your findings on what someone else is seeing for you is always risky, but it also brings efficiency,” says Akhter.
4. FOCUS ON VULNERABLE BUSINESSES
Imbriglio believes the coming months will be critical for businesses, especially once COVID-related financial support ends.
“Government assistance is like a ventilator for businesses, but it doesn’t always take their specific circumstances into account,” he says. “By looking at the situation objectively, we’ll be able to determine which businesses are the most resilient and how we can help them.”
Some organizations, he says, will have to change their governance and management model (financing, amortization periods, life of assets, etc.) to compensate for the loss of revenues. “But every situation is different,” he adds.
Imbriglio predicts services expected of accounting firms like Raymond Chabot Grant Thornton will change in 2021. “The demand will decline for advisory services related to businesses’ carbon footprint or tax planning (because of lost income). Unfortunately, insolvency and bankruptcy cases will rise for some time,” he says. “In any case, we must reinvent our future, taking client needs and expectations as well as the lessons learned from this crisis into account.”
STAY AHEAD OF THE CURVE
Even when the crisis is over, the world isn’t going to stop coming at us fast. That’s why it’s best for accountants to be prepared. See how savvy entrepreneurs will funnel their creativity into concepts that work for a changed reality and explore these 8 sectors that could thrive in the future.
Also, stay up-to-date on the learnings emerging from CPA Canada’s strategic initiative, Foresight: Reimagining the Profession, to look at how drivers of change will impact the future of the accounting.