Why CPAs Shouldn’t Fear Automation

October 6, 2019

Written by Daniel Assyia, CPA

While catching up with an old friend over lunch recently, the conversation turned to my job. He was interested in what I “actually” do. I told him some of the day to day responsibilities of a typical tax accountant, to which he nodded his head and seemed somewhat disinterested.

Then, I mentioned the technology side of accounting, which got his attention, most likely because he works in computer science. I explained that the accounting profession is quickly adopting new technologies related to data processing and automation to create efficiencies and reduce manual intensive tasks. His response is one I often hear when the topic of technology and accounting comes up, “Are you worried that automation could replace your job?”

The fear that technology will replace accountants is not new. Automation has been slowly replacing jobs in many different industries, especially ones built around repetitive manual tasks such as the automotive industry. When you look at a factory line today compared to a few decades ago, the advances in automation can easily be seen. The idea that technology will take jobs from CPAs has been a common topic of debate since the late 70s, and can largely be traced back to one person, Dan Bricklin.

Bricklin was in a lecture watching a professor write on a chalkboard, erasing numbers and redoing calculations. He wondered why there wasn’t a tool that, when a person changed one number, everything would automatically recalculate. With this in mind, Bricklin went home and developed a tool that did exactly that. Using an Apple II computer, and the help of his colleague Bob Frankston, he created a program that would go on to become Excel. When Bricklin took his new tool, which at the time was called VisiCalc, to demonstrate its value to possible customers, they were amazed. The program could do in seconds what an accountant working on paper spreadsheets would do in a day. There was no longer a need for an accountant to spend hours recalculating their spreadsheets due to a change in one number. This is where the fear of technology making accountants obsolete likely began. If this tool could do the same if not a better job in a fraction of the time, you are not going to need as many workers to get the job done. The news of this revolutionary program spread quickly. As the excitement and popularity of VisiCalc grew, so did the concern over computers taking jobs from hardworking accountants.

So, did technology really take jobs from accountants, like many feared? Now that we can look back at jobs data, we can finally answer this question: yes… and no. The number of bookkeepers and accounting clerks fell after spreadsheets became computerized, but the profession as a whole actually saw a large increase in jobs. The reduction in manpower required to run calculations lowered the cost of accounting services for clients. Instead of pocketing the savings, clients opted into purchasing more services that were not feasible before the creation of the electronic spreadsheet. Clients wanted their accountants to calculate the impact of certain business decisions, such as change in product price, raising employee wages, and discontinuing a business segment. Before the introduction of this new technology to the profession, these calculations were simply too expensive, but now they could be done with a few clicks.

The reduction in manual tasks allowed for a shift to value adding analysis. While some traditional accounting roles died off, a completely new breed of accountants was born. In order to keep up with their competitors and meet the demands of their clients, accountants were forced to either adopt technology or go out of business. Those who welcomed the change were able to better serve their clients and more importantly keep their jobs. The integration of modern automation into accounting will no doubt be a huge transformation and require everyone from staff to management to adapt, but this is not the first time technology has caused a change to the profession.

Seeing as history often finds ways to repeat itself, one can hypothesize that some accounting roles common today will not be common in five years. While automation continues to erode manual intensive jobs, it will also create new opportunities. As long as CPAs are open to change and willing to adapt to the new wave of technology, they have nothing to fear.

 

Daniel

Daniel Assyia (US - Tax), is a tax associate with PwC in Kansas City.
daniel.assyia@pwc.com

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