This article lists the qualities that set top staff accountants apart.
This is the greatest most informed article, assuming today is sometime in early 1993. Sadly terms like artificial intelligence and machine learning have become powerful buzzwords so they’re being used in situations where they are far from appropriate.
One particular flaw is where the author makes a point about difference in file formats, such as PDF docs vs text files. Extracting data from these kind of situations has long since been addressed by non-AI software such as ACL and IDEA. In fact many Audit functions have been preformed by software for years.
Another example, the author talks about how AI is better at aligning data, this is so vague, an Excel formula can easily show if a PO is related to an Invoice and again – software in particular Audit software has been doing this for a long time and never under the guise of ML or AI.
Where I do feel it has some value is that he recognizes that
Only human beings, such as the auditor, can tell the true story behind the data.
All in all, I think this is 20 years too late.
The world suddenly starts to look brighter as the larger hand hovers over the 6. 4:30pm you think only 30 minutes until I can go home for the weekend. That dreaded popup ends your jubilation as you start to read the email from your boss. Was the Fredricks order competed? You wince in anger and some regret as you start to key your reply. “No, I thought the priority was the Johnson order, I’ll take care of the Fredricks order Monday morning – we’re close, it won’t be problem” Moments later your boss replies with a terse “Very well, however this lateness will be noted in your review.” Wishing you could protest, but you know better, you know there’s no arguing with an AI.
More and more companies are embracing AI workers, not just in task oriented roles, but also in decision making ones. Some companies have gone as far as to implement monitoring systems to ensure compliance with the AI’s directives. HBR’s article discusses several such examples. And shows us a world where data-scientists are our ambassadors to our computerized coworkers.
While this sounds like Skynet it’s not all doom and gloom or shouldn’t be Schrage notes
CEOs should worry less about bringing autonomy to heel than making it a powerful source and force for competitive advantage.
Learning to trust the algorithm takes “humility and faith” two qualities that leaders should have in abundance.
Will you able to trust the machine?
Some finance executives think their positions could be replaced by technology, a new poll suggests.
By understanding psychological concepts such as directional goals, ego depletion, and the halo effect, CPAs can prevent potential mistakes.
Fighter pilots can teach controllers, CFOs, and other CPA executives how to out maneuver the competition.
Readers asked, “How does continuous accounting actually work?” The CEO of BlackLine provides some answers.
Some gems in here – like press space twice (after typing a word) to create a period. Check it out in the link below.
Five smartphone productivity tips from J. Carlton Collins, CPA.
Source: Get smarter with your smartphone
The FASB has issued new lease rules and in order to help us prepare I’ve gathered some facts about the change
The FASB implemented a new standard that changes the way leases are accounted for. In accounting leases are grouped into one of two categories operating and capital as described in ASC . Operating leases are the simplest to account for and were treated as an current period expense (i.e. rent expense) which was only reflected on the income statement in addition it was disclosed in the notes to the financial statements. Capital leases, or leases that met certain criteria and were more akin to financing arrangements, were a bit more complex and are recorded as an Asset & Liability on the balance sheet.
Under the new standard all leases greater than one year will be capitalized on the balance sheet. This will add potentially trillions of liabilities to American companies. The new standard classifies leases as Type A or Type B. Type A are financing type leases, similar to the capital leases of the old standard, and type B are similar to operating leases. While both will now be on the balance sheet as a right-of-use asset and lease liability, the main difference is how these effect the income statement. Type B will be recognized as a single straight line amortization of the liability while Type A will require amortization of the right-of-use, interest on lease liability as well as impairment on the asset. It’s important to note that the IASB standard treats all leases as a Type A.
This change was made to improve the transparency of balance sheet. Operating leases are not reflected on the balance sheet. However these leases often carry long term considerations and obligations which affect the credit worthiness of the company. The intention is to reduce the use of off balance sheet financing and increase the usefulness of the balance sheet to reflect the true liabilities of the firm.
When does the change take place and how to prepare?
The change takes effect on 12/15/18 for public companies and 12/15/19 for private firms, however you can implement it earlier if you are ready. To get ready it’s best to update your firms lease inventories. Get a handle on all of the existing lease obligations. It will be advisable to invest in a system for managing leases and identifying new internal controls with the asset acquisition process.
For accounting providers we have an opportunity to help clients navigate the new standards. For the more technical minded we can design systems to store and analyze these contracts and assist in recognizing the asset, liability and expenses these generate. Since virtually every firm has these obligations there are many opportunities available.
Lease accounting is undergoing a major change in the way these assets are treated. The FASB’s new standard will increase transparency for investors. Although it presents many new challenges for our firms we must work hard to advise them and help them navigate the changing financial landscape.
In the near future auditors will be aided by power artificial intelligence systems. Near future, is a little inaccurate, in fact it’s already happening. As big data becomes ever more a part of our work lives, computers are needed to make sense of this information and help us preform audit engagements.
The major players are starting to emerge. And big blue is throwing the power of Watson into the mix. KPMG is using their human auditors to teach Watson how to do it’s job. Currently, the software can aid auditors by analyzing contracts, legal documents by looking for keywords and other patterns.
Watson aside – this is becoming the norm in the industry.
A quarter of the 180 CPAs surveyed listed big-data analysis as one of the top industry challenges in the future and 20 percent listed increased complexity and scrutiny in engagements.
Big data will only continue to become more prevalent and we must build the tools needed to audit these systems. Artificial intelligence is poised to be the go to solution when working these engagements. Learning how to use this in our day to day business is a must.