Q: With the constant evolution of technology and business process, what effect do you see the adoption of emerging technologies like artificial intelligence, robotic process automation and blockchain technology having on the accounting industry? How are you preparing for that effect, if at all?
A: Emerging new technologies, like AI, automation and cryptocurrency, are likely to have a significant effect on all companies and industries in the future, but will also create unique opportunities. At Baker Tilly, we are looking at the opportunities these developments will bring for the firm in the coming years. A look in the crystal ball tells us that those opportunities could be varied and lead in different directions, so we must be prepared to pivot as needed.
On one hand, the continued introduction and acceptance of AI and automation in accounting and business processes will bring increased efficiencies in data collection and management, reducing the need for manual data entry in many situations. We see this opening new opportunities in data analytics, which are supported through these technologies.
As technology becomes more integral to the modern production, supply and sales chains, the risk of financial losses from cyber attacks or network interruptions continues to grow. At Baker TIlly, we are experts in the quantification of the financial losses resulting from a cyber attack or network interruption. Our cyber team includes forensic accounting and forensic technology specialists who have brought a new service offering to clients, which focuses on cyber risk consulting, cyber claims review and digital forensic investigation.
When it comes to cryptocurrency and blockchain technology, we recognize that many see it as a game changer for the accounting profession. We tend to take a different perspective. As forensic accountants, we see cryptocurrency and blockchain technology as a fascinating new puzzle to solve, and an opportunity for the firm. As these technologies continue to grow in popularity and gain more mainstream acceptance, the accounting world will have no choice but to evolve. However, blockchain technology does not eliminate the need for accountants or forensic review. In these early days of cryptocurrency and blockchain technology, there is naturally a certain level of distrust and skepticism of the technology. This is a time for education – for learning what it is, how it works and how the records are kept. Blockchain technology may change what we are looking at in a review or investigation, but just because it’s digital does not mean it can’t be hacked, stolen or faked. This is an age of discovery. Many questions remain to be answered about how we integrate blockchain technology into a forensic review, especially as cryptocurrency is more fully embraced and becomes an increasingly accepted form of payment and assets.
There are many different situations where we see cryptocurrency and blockchain technology coming into play in a forensic review or investigation. Some of the questions we are discussing for situations of fraud, theft or illegal activity (but which will have a bearing in many other disputes and conflict situations) are: How do you seize or freeze assets in an investigation? And if you are able to successfully seize the assets, how do you protect them and guarantee their value while they are held, given the often volatile nature of the cryptocurrency markets?
And blockchain technology is not limited to just cryptocurrency. There are platforms, like Ethereum, that are employing blockchain technology for social contracts and other purposes. We see opportunity in these platforms as well, given that a digital contract can be broken just as easily as a signed paper contract. What will happen when a social contract stored on a blockchain is broken? The nature and location of the contract would not alter the dispute and potential litigation. The resulting breach of contract will still require a financial review and valuation of damages.
There is still much to learn, to determine, to develop and to prepare for.
So how are we preparing as a firm? At Baker Tilly, we are educating ourselves. We are building our team of experts to advise clients. We are positioning ourselves to be among the leaders in the field as we continue an open dialogue with clients and industry leaders to determine how these emerging technologies are affecting their industries.