Last week Monday, I spoke at BKR International’s 2018 International Meeting. This was a truly international meeting with representatives from firms in over 48 countries around the world, all gathered in Shanghai, China. The meeting’s theme was “embracing transformation” and I was pleased to speak on how emerging technologies are enhancing the accounting profession rather than disrupting it. This meeting also showed me how even more important relationship building and trust will be as we deal with an increasingly complex world and international borders start to blur.
CPA Firm Associations Versus Firm Networks
The CPA firm associations are an interesting aspect of our profession. The firm associations are essentially groups of firms that have created “trust” among themselves for cross-referrals and collaboration across the world. They are different from the firm networks in that the associations do not have shared oversight or the risk of common liability. Firm networks also have a common brand, name, or initials, and share a common quality control system; whereas the firms in a firm association all operate completely independently.
During the BKR meeting the current worldwide chair shared the growth that they’ve seen over the last 25 years. BKR is the sixth largest firm association in the world and has grown from 60 firms in 1992 to 160 firms in 2018. This was the second BKR meeting that I’ve spoken for and was impressed again with the diversity of members and collegiality of their social events—they really are a big family of firms. This was echoed by the theme for their association: “One Vision, One Voice”.
“May You Live in Interesting Times”
Howard Rosen, CEO of BKR International, opened the meeting sharing the old Chinese “curse” of “May you live in interesting times”. And we certainly are living in interesting, or perhaps extraordinary times for the accounting profession. This reminded me a video produced by the AICPA, “Accounting in Extraordinary Times” which emphasized the great changes already coming to the accounting profession.
Yet, the issues facing the accounting profession share some commonality across the world. During one of the group exercises, we discussed the “people challenges” that firms were facing and many of them were the same: finding qualified people, retaining people, developing expertise, work-life balance, and finding good leaders for our firms. Changes in the international taxation scene were also a common issue with potential changes related to Brexit and the new US tax laws being highlighted as part of the association’s meeting.
Building Relationships to Transcend Technology
So how do we deal with all this change? It’s really about human resilience and collaboration to understand and address the issues. To do this, we really need to build relationships with each other—and in the case of BKR, relationships between the people at its member firms to help their clients deal with cross-jurisdictional issues both within regions of a country or across countries.
Jonathan Low, CEO of Global Success Learning Academy, shared three relationship building strategies to help leaders build stronger relationships with their staff and clients:
- Listen to Understand. Be Curious. – never stop learning and spend more time listening rather than speaking.
- Allocate Reach Out Time – relationships are built both face-to-face and online, you need to do both with clients and employees.
- Courage to ask for “FeedForward” – (from Marsha Goldsmith) rather than feed-back, which is historical, ask for feed-forward, which will help you achieve a future goal.
He also highlighted the importance of trust in relationships and identified the characteristics to help increase trust in a relationship:
- Competence – demonstrating competency in knowledge or ability.
- Commitment – following through on what you say you’re going to do.
- Consistency – that over a period of time your behavior is consistent.
- Caring – looking at how you actually show that you care for your team members or clients
His advice highlighted the importance of focusing on our human characteristics for us to persevere. This reminded me of the Changed2 video which contains the core message of focusing on our human-only characteristics to transcend technology—rather than fighting technology or trying to surpass it.
Taking the theme into the broader picture, it’s not just about leveraging human-only traits to transcend technology, it’s also about building human-only relationships and collaboration to overcome the “interesting times” we are facing ahead.
Lower International Impact Perceived from Emerging Technologies and Privacy & Cybersecurity
My general session portion of the meeting program focused on big data, artificial intelligence, and blockchain. I described each of the technologies and polled the audience to see how much of an impact they perceived from these technologies in the next 3 years: high, moderate, low, or no impact. Interestingly, many of those in attendance saw mostly low to moderate impacts from these technologies. In contrast, with most of the US audiences that I’ve done this for, there is usually a higher weighting in the high to moderate impact.
I also taught two breakout sessions, both on self-assessing a firm’s privacy and cybersecurity risks. The international audience perceived less risk to their firms related to privacy and cybersecurity with generally a low to moderate residual risk, compares with usually high to moderate risk when I’m speaking to US audiences.
This may however be attributed to the high number of firms that were present from the European Union, who have already had to address privacy as part of their compliance with the EU’s General Data Privacy Regulation (GDPR). I was surprised to hear how many EU firms hadn’t completed their full compliance measures yet since the GDPR compliance deadline was in May 2018. In talking with a few of them, I was told that the EU regulators had provided them with additional time to comply since many firms were finding the process to require quite a bit more intensive than they had originally anticipated. This made me think that maybe we need to revisit the compliance efforts of the US clients that we work with since I know many of them seemed to have expended a low to moderate level of effort on their GDPR compliance.
Preparing for Interesting Times Ahead…Together
The fall conference season is definitely in full swing and many of the programs this fall have asked me to speak about the impact of emerging technologies upon the accounting profession. Last Friday, I was the keynote at an event for accounting students sponsored by the CalCPA Inland Empire Chapter. I helped the students learn what they should be doing to prepare for careers that will leverage emerging technologies.
Following my keynote there was panel that discussed blockchain and related issues like cybersecurity and fraud. During this session, the panel facilitator made a interesting point, that our profession is at a critical juncture in working with these emerging technologies, and the biggest challenge is that they are new to all of us—not just the students, but to practitioners and professors too. So this is a huge challenge presented to all of us to collaborate to get through this.
Well drawing upon the lesson learned from the BKR meeting, I’m not worried. With strong relationships, trust, and collaboration between students, practitioners, professors, and thought leaders, I know that as the accounting profession that we will get through all of this change by working together to transcend technology.