1. Walt Disney World Swan and Dolphin Resort Orlando, FL D02: Metamorphosis of the Digital CPA June 8, 2015, 12:30-1:45 Erik Asgeirsson, president & CEO, CPA.com #PSTech IN PARTNERSHIP WITH 2. American Institute of CPAs #PSTech Erik Asgeirsson President & CEO, CPA.com Industry leader with over 20 years of experience leading technology organizations Consistently recognized as one of Accounting Todays Top 100 Most Influential People BS Electrical Engineering, George Washington University, and MBA in Finance, NYU Stern School of Business 3. American Institute of CPAs #PSTech Todays Discussion Defining the Digital CPA The Mindset Strategies 4. American Institute of CPAs #PSTech Defining the Digital CPA 5. American Institute of CPAs #PSTech Key Factors for the Digital CPA 6. 6 7. 7 8. American Institute of CPAs #PSTech Firm Service Lines Audit Tax BPO Impact of Technology to Major Firm Service Lines Efficiencies Innovation Efficiencies Innovation Transformative Revenue Growth New Opportunities Emerging Dramatic Change Past Few Years 9. Changing Firm Value Proposition Value Automation Today Tomorrow Trusted Advisor Trusted Advisor Growth Specialization Business Insights Commoditization of low end Higher Margin Low margin/fee pressures Automation Of Services Transactional Decline Transactional Bookkeeping 10. American Institute of CPAs #PSTech Effectively Communicate 10 11. American Institute of CPAs #PSTech Wiss & Companys Approach 11 12. American Institute of CPAs #PSTech In times of disruption the bridge builders win. - Nicholas Carr, author of The Glass Cage 2014 Digital CPA Conference Keynote 12 13. American Institute of CPAs #PSTech Differentiate Defined purpose Leverage the Cloud Start now The Foundation Accounting Services - Harnessing the Power of the Cloud Geoffrey Moore Start with Why Simon Sinek The Big Switch Nicholas Carr Future Smart Dr. James Canton 14. American Institute of CPAs #PSTech Mindset of the Digital CPA 15. American Institute of CPAs #PSTech Today a small firm doesnt mean simple and a large firm mean sophisticated. Technology has leveled the field. - Greg Lafollette, CPA.CITP CPA Practice Advisor Thought Leader Hall of Fame Member 16. Top 100 Top 500 Small Firms* Widespread Adoption: The Great Equalizer (CPA firms and outsourced F&A firms) 17. American Institute of CPAs #PSTech Digital CPAs are Progressive CHASM Where are you? CPA Profession 18. American Institute of CPAs #PSTech Attributes Entrepreneurial Innovative Risk taker Leader 19. American Institute of CPAs #PSTech Strategies for the Digital CPA 20. American Institute of CPAs #PSTech The Cloud is the Computer Next stage of IT democratization User-friendly online interfaces: easy buying, easy configuring, easy monitoring New applications (what is the clouds spreadsheet?) IT as enabler, not gatekeeper Source: The Big Switch & Beyond Nicholas Carr, author, 2014 Digital CPA Conference Keynote 21. Growth of Amazon Cloud Services More than a million active customers in 190 countries, including 900 government agencies, 3,400 education institutions and more than 11,200 nonprofits. 11 Regions in the U.S., Brazil, Europe, Japan, Singapore, Australia, and China with 28 Availability Zones. Global network of AWS Edge locations now consists of 52 points of presence worldwide, including locations in the United States, Europe, Asia, Australia and South America. Reduced prices 47 times since AWS launched in 2006 [Dec. 2014]. Every day, Amazon Web Services adds enough new server capacity to support all of Amazon's global infrastructure when it was a $7 billion enterprise. 22. 22 Source: 20/20 Vision for 2020: The New Small Business Application Market Bob Anderson, Gartner, Inc. 2014 Per Gartner SaaS, cloud market will be significantly larger than on premise software by 2020 23. American Institute of CPAs #PSTech Driver to go to cloud based services is not cost, but agility and functionality. - Doug Menefee Enterprise CIO Advisory, Amazon Webservices 24. American Institute of CPAs #PSTech Cloud Accounting Value Proposition to Your Clients 25. American Institute of CPAs #PSTech 2020 Vision for Small Business Applications Suites replaced by loosely coupled applications Cloud deployment for almost everything Importance collaborative workflows (internal and external) Mobility first Everywhere, in every application, on every device Embedded and Predictive Analytics - Big Data Streams Integration, Open APIs as we move from suites to federated apps Application marketplaces Security takes on new meaning for you and your clients 25 Source: 20/20 Vision for 2020: The New Small Business Application Market Bob Anderson, Gartner, Inc. 2014 26. Cyber Security and the Cloud Ongoing high profile cyber attacks Key is to manage, contain, and react to the threats Cloud offers significant opportunities from both capability and security perspective Important to always think about security and leverage best practices (SOC, etc.) 27. American Institute of CPAs #PSTech If you look at the history of the American capital market, there's probably no innovation more important than the idea of generally accepted accountancy principles. - Larry Summers Former Secretary of Treasury 27 Standards are Evolving as Well 28. American Institute of CPAs #PSTech New Standard for Client Accounting Services Most Significant Non Audit Standard Change of Past 35 years (SSARS 21): Creates a bright line between accounting (preparation) and reporting (compilation and review) services Adapts the older standards for the current electronic and cloud based environment Very significant change for Firm Client Accounting/BPO Practices 29. American Institute of CPAs #PSTech Copyright 2013 American Institute of CPAs. All rights reserved. 29 30. American Institute of CPAs #PSTech Legend Examples No assurance is provided on these financial statements. These financial statements have not been subjected to an audit or review or compilation engagement, and no assurance is provided on them. No assurance is provided by ABC CPAs on these financial statements. ABC CPAs did not perform an audit, review or compilation engagement on these financial statements, and no assurance is provided on them. ABC CPAs adhered to Statement on Standards for Accounting and Review Services (SSARS) No. 21 issued by the American Institute of Certified Public Accountants in the preparation of these financial statements. No assurance is provided on these financial statements. 31. American Institute of CPAs #PSTech New Thinking Required Key Areas: Revise Positioning and Services Write-up & Compilation Service Client Accounting & BPO Services Value of CPA Firm Updating of Engagement Letters Updating of Service Delivery Legend requirement is an OPPORTUNITY to highlight firm value 32. American Institute of CPAs #PSTech Increasing Automation Automation of tacit (psychomotor) skills: pilots, drivers, soldiers ... Automation of intellectual skills: accounting, medicine, law, management ... Automation of creative work: architecture, design, teaching ... Efficient orchestration of commerce Concentration of profit Source: The Big Switch & Beyond Nicholas Carr, author, 2014 Digital CPA Conference Keynote 33. American Institute of CPAs #PSTech Dangers Ahead Complacency, Bias, Deskilling: The Glass Cage Source: The Big Switch & Beyond Nicholas Carr, author, 2014 Digital CPA Conference Keynote 34. American Institute of CPAs #PSTech Trusted Advisors Role Transcend the routine Develop specialized knowledge Stay ahead of automation wave Be valued for expertise and insight Translate data into wisdom Source: The Big Switch & Beyond Nicholas Carr, author, 2014 Digital CPA Conference Keynote 35. American Institute of CPAs #PSTech 80% of CPAs Think Their Role will Change Significantly in the Future Requires professionals to be more intimate with clients and the shifting marketplace More aware of globalization Better understand digital tools Develop insights into business processes that create value 35 36. American Institute of CPAs #PSTech New Look to Client and Firm Engagement Accounting Today, January 2015 36 37. American Institute of CPAs #PSTech Additional Reading Future Ready CPA Study CPA.com and Dr. Canton www.CPA.com/future-ready-cpa Accounting Services - Harnessing the Power of the Cloud Dr. Geoffrey Moore http://www.cpa.com/whitepapers/accounting-services-harness-power-cloud Model of Success Jeff Drew, Journal of Accountancy http://www.journalofaccountancy.com/issues/2015/apr/accounting-firm-business- models.html 37 38. American Institute of CPAs #PSTech Your Feedback Needed go.trustradius.com/cpa 39. American Institute of CPAs #PSTech CPA.com Resources Insert screen shots 40. American Institute of CPAs #PSTech Resources Digital CPA Webcast Series 2 emerging services for Trusted Business Advisors: Affordable Care Act & SALT July 16, 2015, 2-3pm ET CPA.com Blog Follow @CPAcom on Twitter #DigitalCPA 40 41. 42