The COVID-19 pandemic has drastically reshaped the landscape of professional accounting services, forcing accounting professionals to re-evaluate the way they do business in order to meet the unique COVID-era challenges and needs of their clients. In this article, we explore the top three impacts of COVID-19 on the professional accounting industry.
1) Necessity of Cloud-Based Technology
One of the most significant impacts of the corona virus pandemic on accounting firms has been the way it has forced professionals to incorporate cloud-based technology into a successful business continuity plan amidst the economic shutdown and continued interpersonal business limitations posed by the virus.
A survey of more than 1,100 accounting professionals in the early days of the pandemic attests to the reality that accounting firms who have risen above the challenges of COVID-19 have done so in large part thanks to the implementation of cloud-based technology, specifically cloud-based document management and online client portals. Accounting professionals who had at least one cloud system in place at the onset of the pandemic were far more effective at pivoting their operations to a remote-work setting while continuing to serve their clients than those who scrambled to quickly transition their paper processes to a virtual setup. Almost a year into the pandemic, the accounting industry, among many other sectors of the economy, has reckoned with the reality that cloud-based technology is the wave of the future—and the key to surviving and thriving in a COVID-era world.
2) Re-evaluation of the Client Relationship
Accounting professionals quickly discovered that COVID-19 has added an entirely new, complex layer to the business accounting needs of their clients. In addition to offering essential accounting services to clients virtually, including audits and attest services, tax services, and consulting services, firms have had to help their clients navigate the complicated economic relief efforts initiated by federal and state governments. Compliance in the COVID-19 world is simply not enough—clients are looking to their CPAs to guide them through the ever-changing legislation that could help their businesses survive.
Savvy accounting professionals have had to constantly educate themselves and their clients on evolving government relief efforts. From the CARES Act passed by the U.S. Department of the Treasury at the onset of the pandemic and its creation of the Paycheck Protection Program (PPP) intended for small business relief to government modifications to the PPP loan forgiveness application, additional forgivable expenses under the PPP, and the most recent updates to the Employee Retention Tax Credit, CPAs have become a lifeline of COVID-related accounting expertise to their clients. Reevaluating the impact that COVID-19 has had not only on how accounting professionals do business with their clients, but how their clients do business, period, has been a crucial component of successful accounting throughout this pandemic.
3) Increased Fraud and the Importance of Effective Fraud Detection
Unsurprisingly, the COVID-19 pandemic has provided a ripe opportunity for rampant fraud of all kinds. The Association of Certified Fraud Examiners (ACFE) acknowledged a significant COVID-related increase in fraudulent activity, including within the banking, financial services, government administration, and professional services industries.
Desperate times are always an invitation for increased fraud, and professional accountants have seen a rise in fraud directly connected with COVID-19. From unemployment fraud to financial statement fraud to criminal uses of the federal government’s Paycheck Protection Program, professional accounting services are needed now more than ever to prevent and detect fraud. Perhaps never has an external, unbiased assessment of company financial documents been more important than in the current high stakes COVID-era economy.
One industry trend accelerated by the pandemic is the emerging utilization of advanced technology developments like Robotic Process Automation (RPA) and Artificial Intelligence (AI) to help professional accountants automate data prep work and track cashflow for their clients on demand, paving the way for accounting professionals to step forward as key contributors to fraud investigations and extensive company audits. In a climate of economic uncertainty, accountants can couple their far-reaching expertise with the most advanced software and technology trends to offer guidance through COVID-related fraud.
As a forerunner in the evolving landscape of advanced accounting technologies, VALID8 partners with professional accountants to produce comprehensive financial audits in less time, with less prep work, and with incomparable automated accuracy.
Schedule a demo today to see how our CPA-built and trusted program delivers forensic-grade financial audits to help accounting professional lead the way forward through a pandemic-shaped economy.