Accounting challenge: going from paper to digital

INTRODUCTION

Theworldischanging.Technologyhasbecomethecatalyst forchangeandnewideas.Digitizationforcesustorethink howwemanageanddoaccounting.It’sanentirely differentwayofthinking.However,theestablished accountingrulesinaccountingfirminTorontohave remainedunchangedforcenturies.Thisisnotsurprisingif weconsiderthattheywerebasedonpaperrecordsand ledgers.

Today’sworldhaschanged,butaccountinghasnotyetfullyadaptedtothe digitalera.TheemergenceoftheInternetandtheWorldWideWebenabled thecreationofnewbusinessmodels.Economicactivityismovingawayfrom thephysicalworld,wheretraditionallyallactionsarerecordedandstoredon paper,toadigitalworldcharacterizedbynewprocesses,organizational forms,methodsofcommunication,andtransactions.Thereareafew challengeswheretheroleofaccountingprofessionalslies.

1. CYBERSECURITY

Securityisanessentialqualityin thefieldofbusiness.Every businessshouldhaveitsinternal systemtoremainsecure.However, notallbusinesseshavetheir system.Usually,theygettheirdata fromthirdparties,whichare generallynotassafeasacompany wouldlikethemtobe.

2. SMART DATA

Firmsareseekingnewwaystooptimizetheir businesses,allowingthemtoadaptmorequicklyto thecompetitivemarketandgivingthema competitiveadvantage.Thisisoftendonethrough dataanalytics.However,upgradingtoscalable solutionsisessential,oftenoverlookedinthequest toimprovebusinessprocesses.

3. ANALYTICS

Accountingisahumanprofession,butitisalso accountingasaprofession.Thedata-driven economyhascreatednewchallengesand opportunitiesintheaccountingfield.Moreand morecompaniesareusingresearchanalyticsin theiraccountants’work.

4. MULTI-CHANNEL

Intheageofdigitallyenabledbusinessesand increasedconsumerchoice,customersnowhave morewaystointeractwiththeircompanies.The needtousemorethanonechannel,especiallywith consumers,drivesprofessionalsintothisnewfield. Thechallengewillbetodevelopskillsand competenciesequallyapplicableinallmedia.

5. BLOCKCHAIN

Blockchainwillcreatenewchallengesforaccountantsto theextentthatitwillchangehowtransactionsare executedandrecorded.Anewdatastructurewillbe requiredtoregisterallrelevanttransactiondata.Blockchain willallowanewwaytoconfirmtheauthenticityof transactions.Thiswillmeanthattheoldwaysofauditing willhavetoberevised,andblockchainauditorsmaybe needed.Thechallengewithblockchainwillbeinthe trainingofauditors,asitisanentirelynewdatastructure thatmostaccountantsdonotunderstandwell.