Tax and Financial News June 2018
Will Blockchain Technology Disrupt Audit and Assurance Services?
Blockchain technology is raising speculation over the future of audit and assurance work and the impact it could have on accountants. Originally created to serve as the foundation for cryptocurrencies, blockchain technology has developed and been adapted into many other spaces, including smart contracts. It has the power to disrupt the audit and assurance process and industry.
Specific to accounting, blockchain technology combines peer-to-peer networking technology and cryptography, which allows for a “triple-entry” ledger that can automatically record and confirm transactions in real time. Moreover, these records are distributed over the network and are extremely difficult to change after being recorded, leaving little room for fraud.
Without nearly as much work needed to analyze and verify records, there appears to be little work left for human auditors, providing a major disruption to the financial statement audit process. Blockchain is provoking anxiety for some CPAs who worry they might soon be out of a job, while others think it will change only the way CPAs work, allowing those who adapt to thrive.
Right now, blockchain technology is just a tool unto itself. Transactions recorded on a blockchain could still be unauthorized, fraudulent, or illegal. Other areas of concern that blockchain technology does not address are if transactions are executed between related parties, correctly classified in the financial statements, or linked to “off-chain” side agreements. In other words, blockchains can’t differentiate and look for all the important things auditors tend to be most concerned about. As a result, the technology is not likely to replace people – but rather supplement the auditing process.
The impact of blockchain has already been felt by larger CPA firms with clients who are implementing the technology into their enterprise resource planning (ERP) systems. One of the biggest business areas impacted is procurement and supplier management, in which blockchain enables transparency for every transaction. This decreases the auditors’ work of sampling and testing transactions. Instead, it allows them more time to focus on services such as assessing and testing internal controls and investigating discrepancies.
Blockchain technology also will allow auditors to restructure the auditing process, creating wider adoption of more real-time, continuous audit testing – which will eliminate the time-consuming and labor-intensive processes of preparing and manually testing data. Essentially, the biggest risk is to entry level and junior auditors’ jobs.
Similar to other industries, this creates a conundrum for how to groom future talent. As the bulk of entry and low level roles are increasingly automated and begin to disappear, where will budding auditors learn their trade? Accountants learn as much from job experience as formal schooling, so without the experience provided by the grunt work performed during the early years, there will be a skills and experience gap.
Aside from the talent issue, another challenge with adapting to blockchain is not only that it is new (less than 10 years old), but that it is perplexing due to its differentiation and complexity. CPA firms are looking for ways to adapt and even prosper as a result of emergent blockchain technology, focusing on expanding their assurance services to areas such as cybersecurity and sustainability.
The goal for firms is to avoid waiting until the inevitable arrives. Understanding and adapting to the role of blockchain technology now will make the change more of a transformation and less of a disruption. Finance professionals need to educate and position themselves during the run-up so that they can take advantage of the opportunities that will become available to those who have the right mindset, skills, and tools.
General Business News June 2018
How to Get More Customer Referrals
When it comes to finding new clients, businesses can do so in many ways. Whether a radio or television spot, or an advertisement on a website, social media platform or digital billboard, the goal is to reach new viewers. Another cost-effective way is to develop more customer referrals. In fact, according to The New York Times, referrals account for 65 percent of a company’s new accounts. As an important part of marketing, how can organizations more effectively accomplish this type of advertising?
One under-utilized way to get referrals is to simply ask existing customers if they would kindly refer your product or service to others. Based on statistics from Texas Tech University, 83 percent of customers are happy to refer a company’s product or service, yet only 29 percent of these customers follow through. Often all it takes to get a referral is expressing your gratitude to existing customers whose expectations have been exceeded and showing them how they can refer your company’s products or services.
There are considerations, however, concerning when to ask for that referral. When it comes to a customer who requested a rush job to have their website built over the weekend, it might be more effective to ask for a referral immediately after they’ve had a chance to see the website. Following up shortly after the project’s completion can make the most of a referral request because that’s when the client is most impressed.
There are other scenarios when it could be more effective to ask for a referral well after the sale. When it comes to enterprise application software, such as software that backs up files passively in the background at each user’s endpoint, or when using automated billing or payment processing systems, clients will not see the results for a few weeks, months or longer. For products that produce results over the long term, ask permission to follow up with the client in 90 or 180 days for feedback on how the product has performed. A client might not need a backup for six months; and it could take a month or two for a client to analyze their sales reports to see the software’s effectiveness.
Leverage Social Media Platforms
What matters less than the type of social media platform is the ease and ability of a company to use this media to ask for and receive a referral. If a customer expresses a highly positive review based upon a recent experience, social media can be leveraged to increase referrals for a business. Push friendly reminders and embedded links via social media, email newsletters and on your website to encourage clients to post a Tweet, Facebook comment or photo on Instagram as a referral for your company.
While there’s no single avenue to seek new business, taking care of your current clients is one way that can pay dividends now and in the future.
What’s New in Technology June 2018
Amazon’s Alexa as a Virtual Office Assistant
Studies have shown that as much as 40 percent of time spent at work is generally unproductive, busy work. Things like checking emails, ordering supplies, fixing the copy machine or trying to figure out how to work a conference call line – during the conference call. These tasks can be aggravating and, when experienced by everyone in the firm, can have an impact on the bottom line.
To help companies manage small, day-to-day tasks, Amazon has launched Alexa for Business. Amazon Echo is a speaker; Echo Dot is a smaller speaker. Alexa is the name of the virtual assistant who you can converse with through the Echo speaker. Alexa boasts more than 25,000 skills – which are basically apps that you enable in order to access a particular service. For example, you can get an up-to-the-minute news brief from Reuters, request the stock price of a specific security, order a driver from Uber or Lyft, translate a word or sentence from another language, order supplies, compile a to-do list or initiate phone calls – all by simply asking Alexa.
Alexa for Business isn’t just for individual use. A company can set up Alexa devices in common areas throughout the workplace for all employees to use.
Around the Office
Alexa for Business enables a firm to manage all of the Alexa devices from a centralized console connected to your Alexa for Business account. This is a time-saving feature so that the devices do not need to be managed individually.
This configuration enables all employees to utilize Alexa for various tasks, such as getting directions, finding an open meeting room, ordering supplies, reporting building problems or notifying IT of an equipment issue. Alexa also can be linked to internal computer networks to provide company-specific information, such as inventory levels or sales figures.
At Your Desk
For folks who work in an individual office, Alexa at your desk can help you manage your calendar, maintain a to-do list and set up reminders so that you don’t miss a meeting or an appointment. By simply speaking in a normal voice, you can ask Alexa to make phone calls for you and dial into conference calls. You can set up skills for your specific device or incorporate, for example, the corporate calendar so that every device has access.
Employees can even use Alexa for Business skills with their home devices, which allows them to work from home. They also can access skills from their home device while at work.
In the Conference Room
Alexa for Business includes skills that make it easy to configure Alexa to control your conference room calls, audio and visual equipment, and any meeting applications. This allows anyone to get the meeting started by speaking to Alexa. For small conference rooms, an Alexa-enabled device can actually function as an audio conferencing vehicle; in larger conference rooms, Alexa can run the equipment so that participants can focus on the meeting – not the phone or presentation glitches.
In today’s competitive business environment, the ability to maximize every staff member’s productivity can be a key driver for success. Start by having a frank discussion with employees about what tasks drain their time and resources throughout today, then consider adopting Alexa for Business to help address those issues and give your entire firm an on-demand virtual assistant.