Illustration by Noma Bar

Foresight, which launched this past summer, is anchored by a series of focused roundtables to be held across the country this fall, each with about 40 participants who are leaders in business and accounting. (Illustration by Noma Bar)

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Mapping out the future of accounting

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Over the past few years, Deloitte Canada has been using a new software system, based on artificial intelligence (AI), that could change some of the most long-standing practices in the world of auditing. Rather than merely sampling commercial contracts, the system, known as “Argus,” can convert documents into readable formats, automatically compare contracts to look for anomalies, and scan large tranches of files using advanced analytics algorithms.

The adoption is “still in its infancy,” says Richard Olfert, FCPA, Deloitte’s managing partner for regulatory, quality and risk. The firm’s audit teams are actively using the technology, both with the vendors and internally with clients. Consequently, the rollout has been gradual, with Deloitte CPAs introducing the new AI-based system into increasingly complex audit assignments. As befits a so-called machine-learning system, Argus has become more adept over time at taking on aspects of the audit process. “With each audit cycle,” says Olfert, “we both discover and explore new, expanded ways to use its capabilities.”

Technologies like this, that use AI, machine learning, blockchain and big data analytics, are evolving quickly. They’re performing astounding tasks, from voice-activated searches to automated online customer service. Financial firms are building applications using blockchain, for example, to handle know-your-customer processes and reconciliations.

But Deloitte’s project is just one example of how emerging technologies are also dramatically re-drawing the parameters of the accounting profession—not just in Canada, but around the world.

In the face of rapid change, CPA Canada is now embarking on an ambitious national and global consultation process, dubbed CPA Canada Foresight: Reimagining the Profession. It zeroes in on the economic, social, geopolitical and environmental drivers of change, as well as the impact of emerging technologies. The exercise will engage not only CPAs but also the businesses CPAs support, regulatory bodies, investors and other stakeholders who play a key role in supporting the development of high-quality, reliable and relevant financial information.  “As a profession, we are always focused on the future,” says Joy Thomas, FCPA, the president and CEO of CPA Canada. “This process touches everybody.”

The potential for the accounting world is far-reaching and positive, says Carol Paradine, CPA, the CEO of the Canadian Public Accountability Board (CPAB). “Yet,” she adds, “there will be challenges and interesting questions that we need to address.” The list is extensive: the effect of emerging technologies and social and political trends on regulatory and professional oversight bodies, the impact on accounting education and training, and how these drivers will influence specific areas such as tax, audit, financial reporting and performance management.

CPA members, plus other stakeholders and the public can engage in an unprecedented digital conversation.

Indeed, all these drivers of change are focused on an issue that is central to the accounting profession: adding value by helping to develop critical information that can be used by businesses, investors, regulators and other stakeholders. And it’s all happening at a time when businesses are generating an ever-growing volume of forward-looking, but largely unaudited, information that rapidly finds its way into markets, potentially affecting investor or regulatory decisions. 

Lori Mathison, FCPA, the president and CEO of the Chartered Professional Accountants of British Columbia, says the profession needs to develop new and agile approaches to verify other sources of unaudited corporate information now available to markets, investors and consumers. 

Echoing challenges that surfaced with the reporting of corporate sustainability information, companies now disclose all sorts of current and forward-looking data, some of which can produce risks or distort outlooks. “The best information we had before was historical financial statements,” says Olfert. “Now, there’s a huge amount of information that is real-time and forward-looking.” 

Foresight, which launched this past summer, is anchored by a series of focused roundtables to be held across the country this fall, each with about 40 participants who are  leaders in business and accounting. Their mandate will be to formulate scenarios that identify future directions for the profession in areas such as external reporting, audit and assurance, tax, financial management, and strategy, risk, global regulation and governance. The scenarios are also meant to highlight the employment opportunities and skills CPAs will need to remain essential players. Augmenting the roundtables, CPA Canada is soliciting feedback from its 210,000 members, its stakeholders and the public through a digital conversation considered to be unprecedented in scope. CPAs and non-CPAs globally will be able to join online forums and discussion groups hosted on “SoapBox,” a unique platform that engages them, and CPA Canada will use an AI analytical tool called Lexalytics to help identify trends and insights. (See

The intensive roundtable sessions will include a wide range of market participants, from CEOs and investors to sustainability experts, standard setters and regulators. Catalytic governance consultant Pat Meredith explains that the process aims to develop a deeper understanding of the impact of changes on the profession so it can adapt. “The whole purpose of this exercise is not just to study [the new technologies and the impact of social, demographic and geo-political trends], but to take action,” says Meredith, who was closely involved in a similar process to overhaul Canada’s payments systems at the request of then-finance minister Jim Flaherty in 2010. 

The Foresight project builds on the significant thought leadership undertaken by CPA Canada.

The project will scope out an answer to a question that is being considered by many professions (including law and medicine): how will technologies and emerging trends impact the way CPAs do their jobs, and the role that accounting plays within the broader context of Canada’s business, financial and regulatory structures? A global perspective is critical for the process because regulators and other jurisdictions and accounting bodies around the world are grappling with similar questions. 

The Foresight project builds on the significant thought leadership undertaken by CPA Canada, in particular the work done for the “Drivers of Change” report, and on other recent thought leadership research generated by the profession in recent years.

The transition in professional practice has already meant updating core competencies and expanding the skill sets resident within finance  teams, both on the audit side as well as for preparers tasked with the production of financial information. Richard Olfert points out that audit teams working with AI systems will require the support of data scientists and software engineers, although it will still fall to CPAs to apply their judgment to the findings generated by the automated audit tools. “The profession has a role in verifying these kinds of metrics,” he says.

Other players in the accounting ecosystem are also dealing with these innovations. Carol Paradine, of CPAB, observes that when auditors can use AI algorithms to review a company’s entire transaction database instead of sampling it, the methodologies governing audits need to adapt accordingly. As she observes, the question facing regulators, auditors and standard setters is, “How does that black box work and how do we evaluate it?” 

“The opportunities are massive if CPAs are willing to embrace them and step outside the box.”

(It’s important to note that the hype around technologies like machine learning and blockchain is intense, and can obscure the limitations of these new systems. For example, regulators are concerned about the use of blockchain for illicit applications, such as money-laundering. And cryptocurrencies  continue to produce less robust outcomes than the much-anticipated promise of perfectly transparent and accurate ledgers.)

As for machine learning, Lori Mathison points to emerging services, such as Blue J Legal, a big data algorithm for tax applications and employment law issues. While such systems can automate aspects of tax preparation and filing, Mathison notes that much of this type of work—for estate planning, to name just one example—still demands the complex judgment calls that professionals are trained to make. Paradine concurs: “I’m having trouble envisioning where you won’t have professional judgment applied.”

Overall, though, the accelerating innovation cycle, both in business settings as well as within the accounting profession, are likely to produce as much in the way of new forms of practice as it does in automating older ones. “The opportunities are massive for CPAs, if they are willing to embrace them and step outside the box,” Mathison says.     

The technologies, she adds, will mean that CPAs “have to change how they do things, but not what they do.” 

CPAs are well positioned, in other words, to leverage their skills in validating the integrity of huge tranches of information, but also in serving as trusted advisors to companies changing their own business models thanks to technological change. As in any revolution, it’s the smart and the nimble who thrive.