Technology may create uncertainty with regulation, but it creates opportunity for CPAs
Andrew Seifert, JD, tax consultant, Wipfli LLP | October 2017 Footnote
Accounting regulations guide how the CPA profession operates. But, sometimes, the regulations can be difficult to understand and apply to your individual situation.
A January 2017 McKinsey Global Institute report states that 49 percent of the activities people are paid to do in the global economy have the potential to be automated with today's technology. This will certainly change your business operations and create new opportunity.
The world of technology is changing exponentially faster than it ever has, and the pace seems to increase every day. I think most people would agree that, while sometimes hard to accept, the changes in technology have improved many aspects of life, including improved efficiency and processes in business.
Robots, drones, cybersecurity, blockchain, cloud computing and artificial intelligence are a few disruptive technologies affecting business today. Not to mention your own electronic personal assistant -- Amazon's Alexa. You might view Alexa as a convenience, but Amazon looks at it as a source of big data in its quest to be the biggest and the best. Will next year's list include one, two or 10 new items? Regardless of the number, we know new technology will disrupt the status quo.
Ten or 15 years ago, who would have imagined these terms and technologies would become part of the everyday vocabulary in the CPA profession? I certainly wouldn't have. The fast pace of change also creates uncertainties in the world of regulators, ambiguous situations to navigate and brings CPAs under the jurisdiction of regulators that previously had no oversight of the profession.
It's important to be current
By now, you might be thinking if you follow the rules, you should not have any issues with regulators. Under normal circumstances, I would say that is generally true, but the rapid pace of change has redefined normal.
State and federal regulations continue to evolve, but they don't seem to be keeping up with the rate of change. As a CPA, you want current information to make informed decisions to grow your business or advise your clients. Trying to keep up may feel like trying to fit a square peg in a round hole.
For example, as a CPA, you might use a drone to verify inventory or conduct assessments but, as a result, may now need to be concerned about additional data privacy and property rights regulations. Most CPAs probably never thought about property rights regulations, let alone having to understand and comply with them. Now your work with drones may fall under additional jurisdiction of local units of government and trespassing laws.
Another example is with the use of artificial intelligence. The development of computer systems using artificial intelligence to think, make decisions, look through data and identify what rules to follow to complete a transaction raises the question of who is ultimately responsible for the final answer. Is it the CPA providing an assessment or whomever provided the data used by the CPA? Another area where the answers are not black and white.
Why it matters to you
What does that mean for you? It means you need to engage policymakers early and drive the discussion to proactively shape regulation rather than push for changes after a new regulation has been developed.
The MNCPA government relations team is engaged with legislators, attends legislative committee meetings and meets with lawmakers to advocate on your behalf, but we also rely on members to identify potential changes. You have the first-hand account of how regulation affects business; personal stories are one of the most effective ways to influence change.
You can share your experiences in a number of ways:
- Email or call me
- Email or call your legislator
- Attend CPA Day at the Capitol
- Contact members of the MNCPA Legislative Issues Committee
- Join the Legislative Issues Committee
Member input and support is essential in our efforts to repeal, change or implement a new regulation to enhance business opportunity and create a more efficient and effective business environment. These changes might involve the BOA, Minnesota Department of Revenue or Minnesota Secretary of State regulations. Remember, CPAs are trusted advisers not only to businesses, but also to elected officials.
Businesses and CPA firms need to look at whether they are leveraging technology to stay relevant and incorporate it into the baseline rather than setting it as a goal to aspire to. CPAs who can bring both technical and business knowledge together will have many opportunities to drive change. Embracing the change will greatly increase your chances of coming out ahead in the transition.
All of this will also require staying current on the ever-changing world of regulation. Change and improvements in one area may cause problems and issues in other areas. Working together, CPAs and the MNCPA can influence policymakers as they set the future rules the profession must follow.
Do you have questions or want to get involved in the legislative process? Contact Geno Fragnito at 952-885-5550 or email@example.com.