In an industry known for its conservative nature and resistance to change, how can accounting firms successfully navigate the shift to remote work environments and AI adoption? Technology is transforming the accounting profession in ways we could not have imagined a few years ago. These innovations, from AI-powered tools to advanced data analytics, enable the industry to stay competitive and deliver value to clients.

This episode of #shifthappens brings together Dux Raymond Sy, Chief Brand Officer at AvePoint, and David Hartley, Partner-in-Charge of Advisory at Anders CPAs + Advisors, to discuss how technological advancements, private equity investments in CPA firms, and a shrinking talent pipeline are reshaping the industry. David offers valuable advice on change management, addressing technological fears, and balancing innovation with traditional skills in the evolving accounting landscape.

The Changing Landscape of Accounting

David identifies three major forces reshaping the accounting profession:

• Technological Advancements: The pandemic accelerated the adoption of digital tools, fundamentally changing how accounting firms operate. David highlights the need for additional training for professionals who may have missed out on traditional office experiences due to the pandemic and remote work trends.
• Private Equity: Private equity firms have discovered the appeal of CPA firms as investment opportunities with recurring revenue streams and long-standing client relationships. David explains private equity firms have started buying minority shares or 50%-70% of CPA firms, which increases their influence in the potential growth and stability of the market.
• Talent Pipeline Challenges: The profession faces a shortage of new professionals who are choosing the CPA path, leading to a talent gap. David notes that firms must invest in their people and create an environment that attracts and retains the best talent.

While embracing technology is crucial, David emphasizes the continued importance of human skills. He also stresses the importance of effective communication in implementing new technologies and processes.

Balancing Technology and Human Skills

As the accounting profession continues to evolve, firms need to strike a balance between embracing new technologies and nurturing human skills such as critical thinking, communication, and relationship-building.

He shares some use cases of how AI can improve employee efficiency and client services:

• AI can reduce the time it takes to complete an audit while also increasing its quality. For example, DataSnipper is a newly deployed tool that helps automate many of auditors' tasks.
• AI-powered tools can improve the efficiency of tax research processes.
• AI can summarize financial statements, lengthy contracts, and agreements, saving significant time for professionals in document analysis.
• Tools like Microsoft Copilot can help less experienced professionals improve their communication skills.

"Technical skills are important, but soft skills are what truly differentiate high performers," David adds. "Building strong relationships and communicating effectively are essential for success in the CPA profession." These skills are becoming increasingly valuable as technology automates routine tasks, allowing employees to focus on higher-level, value-added activities.

The challenge requires accounting firms to rethink their training and development strategies to ensure that new professionals can still gain the necessary experience and skills to progress in their careers.

Challenges in AI Adoption

David encourages accounting firms to embrace innovation and experimentation: "By experimenting with new technologies and approaches, we can find better ways to serve our clients and stay competitive in a rapidly changing industry."

Despite the potential benefits, he shares several challenges in adopting AI:

• Resistance to Change: The accounting industry is not necessarily known for change. Many firms find it challenging to do things radically different from how it was in the past.
• Lack of Experience: Most employees probably have not used an AI tool or only heard about it through the media or their workplace.
• Fear and Uncertainty: Many employees are already overwhelmed by existing technology, and introducing AI can be daunting.

David highlights the need for a strategic approach to change management, coupled with empathy for employees who may be struggling with the rapid pace of technological advancement.

Key Takeaways to Embrace Change with Empathy and Strategy

David recommends these strategies to bring barriers down on AI resistance:   

• Prioritize Change Management: Communicate the reasons for change and set clear expectations about which tools to use to reduce confusion and improve adoption.
• Focus on Data Quality and Security: Ensure that your data is clean and secure before implementing AI tools to avoid potential issues.
• IdentifySpecific Use Cases: Focus on specific use cases that address real business problems rather than just implementing AI broadly.
• Develop Prompt Libraries: Create libraries of effective prompts for AI tools to help employees get started and see the potential of these technologies.
• Start Small and Build Confidence: Begin with easily implementable tools, such as AI-powered note-takers for meetings, to build familiarity and confidence.

By focusing on clear communication, targeted use cases, and ongoing employee support, accounting firms can successfully navigate the challenges of AI adoption and emerge stronger in this technology-driven era.

As David aptly puts it, "Things can only get better." With the right approach, the accounting profession can harness the power of AI to enhance efficiency, improve service quality, and create new opportunities for growth and innovation.

For more insights from David, check out his LinkedIn profile and the "But Who's Counting" podcast.