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Accounting Firms Amp Up Tech Investment in Next 2 Years

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TLDR:

  • Accounting firms prioritize investing in technology in 2024.
  • Firms are facing a talent shortage and are taking action to attract and retain employees through training programs and new roles.
  • Firms are also grappling with new laws and regulations and are seeing increased demand for client advisory services.
  • The use of data analytics is increasing in auditing activities.
  • Internal audit departments are seeking expertise in data science, IT audit, cybersecurity, and artificial intelligence.
  • Auditors are under pressure to do more with less time and resources.

Investing in technology is a key priority for accounting firms in 2024, according to the 2024 State of Accounting Firms Trends Report by Caseware International. A total of 77% of survey respondents stated that their financial outlay on technology will increase over the next two years, up by 8% compared to the previous year’s survey. The use of innovative technologies such as Generative AI is on the rise, with more than 10% of respondents planning to invest in this area in 2024. Engagement software was also identified as a top area of investment.

Accounting firms are facing a talent shortage and are taking action to address this challenge. According to the survey, 88% of respondents said hiring and retaining talent was challenging to some degree. To mitigate this, firms are offering training programs to upskill existing employees and creating newly-created roles and capabilities within their firms. Some firms are also employing third-party talent sourcing services to attract new talent. It is noted that technology is a magnet for those considering joining the profession, and firms that fail to meet the expectations of tech-savvy professionals may lose talented employees to competitors.

Keeping up with new laws and regulations is another challenge faced by accounting firms. The survey found that dealing with new laws and regulations was the most frequently cited challenge among survey respondents. As a result of an increasing complex regulatory environment, clients are turning to their accountants for advice and guidance, leading to a rise in demand for client advisory services. Around 76% of respondents noted that their firm has seen growth in this area.

In the field of internal audit, finding and retaining skilled auditors remains difficult. Around 90% of survey respondents stated that hiring and retaining the right talent for their firms was challenging. Internal audit departments are looking for expertise in data science, IT audit, cybersecurity, and artificial intelligence to build teams equipped to deliver the audit of the future. Data analytics is also being increasingly used in auditing activities, with 21% of respondents stating that they are now using analytics for all audits and an additional 57% using it selectively for some.

Auditors are under pressure to do more with less time and resources. The need to be efficient and complete audits within deadlines is a major internal pressure for audit teams. The survey revealed that 30% of respondents identified this as their top issue.

Overall, the survey highlights the increasing emphasis on technology investment, the ongoing talent shortage, the challenges of keeping up with new laws and regulations, and the use of data analytics in the accounting profession.

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