Solon Angel

Solon Angel is the visionary founder of MindBridge. His time in Silicon Valley shaped his business philosophy of watching trends and building product-centric companies that solve massive market problems. Solon’s 16 years of experience in high-tech firms ranging from venture capital to business analytics and deep knowledge of human fraud detection make him the perfect technology strategist to reshape how organizations around the world detect and prevent corporate risk while deploying capital. Solon is a regular speaker at the ACFE, IIA, and ACFCS.

A fireside chat with Russ Jones: Shopify, AI, and the future of the CFO

September 15, 2024June 11, 2021 by Solon Angel

Russ Jones, former CFO of Shopify, chatting with Clubhouse group, Accounting and Finance Tech.

Unless you’ve been living under a rock for the past several years, you’re well aware that Shopify is one of the biggest IPO success stories in recent history. One of the individuals who was integral in taking Shopify public in May 2015 (and doing so successfully) is Russ Jones, former CFO of the Canadian tech giant from 2011 to 2018.

Recently, our very own founder hosted a virtual fireside chat with Russ.

Given Russ’s experience, it’s no surprise that he had a wealth of insightful information to share – from his time with Shopify and taking the company public, to how best to present financial information, and what the future holds for CFOs.

Below is an excerpt highlighting some of the key discussion points between Solon and Russ.

This interview transcript has been edited for clarity and length.

Solon Angel: Russ, instead of me talking about you, why don’t you introduce yourself and tell us a bit more about yourself?

Russ Jones: Sure. I’m a CPA, and I’ve been in the industry for 40 years now, so I’ve been around the block a little bit. My most recent full-time role was the CFO at Shopify, which I joined when the company was 50 employees and my team was a part-time accountant and the CEO’s mother-in-law. I took public in 2015, and then I positioned myself as the first official retiree from Shopify. I retired about three years ago, and since then I’ve been doing a number of board and advisory engagements.

Solon: What got you interested in finance in the first place?

Russ: I really credit it back to an excellent high school teacher who was a CPA and then decided to teach. I had that individual for both accounting and economics courses, and I did quite well in those. I found a lot of interest on the finance side, in numbers and thinking about businesses. The skills that you get opens up a number of doors. Because you have that finance skill set, you get involved in lots of the conversations, so it allows you to understand and add value to a business and partake in a lot of the decisions that get made.

Solon: When you mentioned Shopify and how early you joined them as CFO, at an early stage like that, did you know one day you would take them public? Did you see that this company could be a unicorn and Canada’s most valuable tech company?

Russ: Absolutely not. Although I had a number of signals that I used to sort of gauge opportunities. One of the things was that Shopify, as a Canadian company, had tier-one U.S. VC (venture capital). So, to me, that’s always a good indicator.

The other thing that attracted me was that the thing the company needed to get to the next level was a skill set I brought to the table. I was the grey-haired person in the room helping these young entrepreneurs to keep the company going and scaling.

The last thing I really liked was the business model; Shopify is a business where you get paid every day. Having been involved in companies that are doing enterprise software where at 11 o’clock on the last night of the quarter you don’t know whether you’re going to do five or 10 million dollars, it’s actually nice to have a company where you know you’re going to get some revenue every day. So, those three things are what attracted me .

Solon: Looking back, what was the biggest problem that you had dealing with financial operations at Shopify? What was your biggest success?

Russ: Right from day one that I joined Shopify – and this goes back to your question about did I think they would go public – obviously at that stage, no one knew, but my view is that you always build a company so that it could go public. On the scaling side, the biggest issue is how to introduce finance requirements and controls in a very entrepreneurial-type environment. you really want not to be seen as just a sort of police force of the company and always saying no. And so, about creative ways you can add value and assist in the company’s growth versus becoming an impediment there.

One of the things we always thought about at Shopify is in the same way that tech companies think about building up technical debt over time, how do you keep reducing managerial debt. A lot of companies, if something goes wrong, they’ll introduce a whole process to make sure it never happens again. I think a better approach is if someone has done something wrong, deal with that. Don’t introduce something that’s going to slow the company down.

The other point I would like to hammer home is that there is a difference between going public and being public. These days, it can be faster for a company to go public. But if you’re not ready to be public, that’s where a lot of the challenges arise. It’s important to think about both things – am I ready to go public, and am I ready to be public?

Telling the story of the numbers as CFO

Solon: In your time with Shopify, what was your experience with internal and external audits? Were they effective?

Russ: I think on external audit, to start down that path as soon as you’re ready is a good discipline to have. It also forces some operational best practices within the finance group and the company itself. In terms of the internal audit function, that is one you can start to add a little bit later in terms of the function itself, though the underlying controls you should start to put in place early on because trying to add them later is never the most effective way of doing it.

“As the finance leader, you need to be able to transition into the story of the numbers versus just the numbers themselves”

I think there are a couple of even more important things. As the finance leader, you need to be able to transition into the story of the numbers versus just the numbers themselves. I think that’s the real skill. The other thing to think about is what are the key metrics that I need to talk about to explain the company and how the company is run. But, on the flip-side, you also think about metrics you don’t want to talk about how do you answer questions around that.

An example is that, for Shopify, one of the metrics we didn’t want to talk about was the unit churn number. The reason for that is the role of Shopify as a platform is to allow lots of different merchants to try to start their business. The whole philosophy of making it easy to get up and running and making it very cost-effective was really ingrained into the company. The best way to keep your unit churn number down is not to have people join the platform who aren’t going to be successful, so you make it tougher for them to join. We never did talk about that externally, but every investor we met with would ask us that question. The way that we dealt with this is we had a revenue retention number of over 100%. So that way, we could explain that not every merchant is going to be successful, but the ones staying on the platform generate more revenue as a cohort month over month.

Solon: That is a very important point. I think a lot of people underestimate the power of positioning facts in a meaningful and valuable way for people to understand.

Russ: And as you move up in finance in terms of leadership roles, that ability to summarize and present the information is the real skill that gets developed over time. I see that as a tipping point for some people that, for example, would send the board Excel workbooks with just reams and reams of information, where really at that level you want one or two slides that tell the story and then you can answer questions.

The current and future role of the CFO

Solon: To what extent is a CFO involved in managing and mitigating risk for a company like Shopify? Does that role change when the organization gets larger?

Russ: I think risk is something that companies have from the very beginning. As bigger, you start, on both the finance and the legal sides, hiring people that spend a larger percentage of their time on just that. But is a cross-company type of thing. The high-level risks that a company deals with aren’t just financial risks or legal risks; they’re operational risks to a large degree. Understanding what those risks are and making sure that the right group is taking care of them is an important part of any fast-growing company.

“As data and machine learning and artificial intelligence become more important, I think there is a real role for finance to play”

Solon: When thinking of the finance industry at large and the role of CFOs and finance professionals, what concerns you the most today in what you see in the profession?

Russ: Yes, there are concerns, but I’m also excited about all of the opportunities out there. I think the one concern I have is with the industry right now and the number of SPACs (special purpose acquisition companies) out there chasing companies. I do worry about companies that aren’t ready to go public starting to go public. But having said that, I do believe the finance role itself is expanding. As data and machine learning and artificial intelligence become more important, I think there is a real role for finance to play. So, overall, I would say I’m quite excited about it.

For more industry and thought provoking articles, visit our blog.

Simplifying remote audit using AI auditing software

September 21, 2024March 26, 2021 by Solon Angel

The explosion of remote work is one of the biggest shifts to come out of the COVID-19 pandemic. Social distancing rules and concerns of employee safety have forced many to settle into working from home. But what does that mean for the future of remote audit, and for the auditing software that makes it possible?

For accounting firms specifically, the necessary distance created by COVID-19 has meant a major increase in remote audits. While the process of embracing remote audits hasn’t exactly been easy for accounting firms, many are now turning to artificial intelligence (AI) to automate data assessment and analytics to retain the quality of their audits, while making remote work simpler and more efficient. Below, we’re exploring some of the challenges of remote auditing and how using AI in remote audits can be a game-changer.

Accountants weren’t prepared for sharp increase in remote audits

In the world of COVID and social distancing restrictions, the typical site visits that take place during audits have been put on hold. What was once a routine process of going into the field to comb through financial data, speak with key employees, check internal controls, and handle other in-person tasks has all been diverted online.

The problem is that many accountants weren’t prepared for this shift. A recent survey by IMA and Deloitte, which polled over 800 finance and accounting managers, showed that 75.7% of respondents said their company’s accounting processes are either largely manual or are still a considerable manual effort.

Because of this, the majority of auditors working remotely are facing big challenges. For one, figuring out how to securely access a company’s financial data is not always straightforward. Companies today are acutely concerned about cybersecurity risks and adhering to data and privacy protection regulations. To successfully handle remote audit engagements, accountants must choose solutions and tools that are fully hardened and meet cybersecurity best practices.

Fraud is on the rise during the COVID-19 pandemic

Even with secure access to general and sub-ledgers as well as other information, detecting risks across financial data has become harder. The fact is, fraud is on the rise as a result of this pandemic. Not only are companies under a lot of pressure to minimize loss and meet fiscal projections, but it’s extremely difficult to monitor internal controls when key employees are working from home.

For instance, an article in Accounting Today titled ‘The craziest work-from-home expenses of 2020’ shows just how outlandish some fraudsters have been with expense claims during COVID-19. Everything from a $7,600 facelift which was listed under ‘Repairs and Maintenance’ to €200 worth of tea which was credited as an ongoing company perk is being flagged. For every instance of fraud that is caught, another illegitimate expense could easily slip through the cracks.

To help counteract these new work-from-home challenges, 40% of respondents in the IMA and Deloitte report said that they’ll be implementing more automated tools in the future. Uniquely, just over 20% of those respondents are focusing on AI. That’s because whether in an office or at home, accountants can use AI auditing technology to strengthen remote audits and simplify everything from building an audit plan to identifying and assessing risks.

5 ways AI auditing technology enhances a remote audit

Increase fraud and risk detection with AI-powered insights – With fraud on the rise, accountants must be hypervigilant when combing through all financial data. Truly AI-embedded auditing software helps auditors run multiple algorithms across all client transactions simultaneously and cross-correlate data using dozens of testing criteria. Auditors can then effectively identify all potential risks or fraud within the financial data and negate the weakening effects that work-at-home situations have had on internal controls. By taking this data-first approach, auditors can also detect anomalies such as rare monetary flows and unique account activity which can be difficult, if not near impossible to anticipate or test manually. Working remotely with AI auditing technology essentially enables auditors to get a better understanding of risks across a client’s financial data.They can then focus on delivering quality assessments and audits and offer their clients more data-driven value.
Be better prepared to ask the right questions – With AI auditing software, accountants can become more effective at identifying real risks and anomalies versus a firm’s typical transactions. They can then direct resources to investigate those potential red flags and become better prepared when conducting interviews or gathering more information from clients. Honing in on riskier transactions and asking the right questions helps to enhance the accuracy of remote audits and ensures auditors deliver strong financial insights to their clients.
Build a more comprehensive audit plan – An AI platform will rank transactions based on risk level. The MindBridge risk discovery platform also gives accountants an intuitive visualization dashboard that shows a holistic view of a client’s financial transactions from month to month. This makes it easier for auditors to spot risks during remote audits and dive deeper into the data that stands out based on their professional judgment. These risk-based AI rankings also help to confirm an auditor’s own risk assessments and build a more comprehensive plan for the remote audit engagement.

Learn more about how MindBridge can help you sample less, and discover more.

Work with a secure cloud platform to access financial data – Choosing secure cloud-based AI auditing software can make all the difference in remote audits. Not only is it easy to upload and share financial data from various accounting software platforms, but leading AI auditing providers will offer solutions with built-in cybersecurity features and SOC 2 Type 2 compliance certifications. Sharing these details with customers before remote audit engagements can help ease cybersecurity concerns.
Get hands-on support for data ingestion and analysis – Working with new technologies to facilitate remote audit engagements can be overwhelming to some firms. Having hands-on support from solution experts can help ease the transition. Both auditors and their clients will feel confident knowing they have support at the ready should they have questions or need guidance. This support also ensures they get the most value from the AI auditing software.

Thinking long-term about AI for remote audit

As accounting firms everywhere navigate the challenges of remote audits, groundbreaking auditing technologies are just some of the tools helping them identify financial gaps and ensure quality assessments. And though work-at-home mandates may not last forever, the benefits of AI technology can. Accounting firms that choose to leverage AI technology for remote audits today will continue to see returns on this technological investment well after this pandemic subsides.

Are you wondering how to work new technologies into your existing audit process or what other benefits they can offer? Check out our article, “Should you update your audit methodology?”

Ready to embrace AI to strengthen your remote audit?

Contact our team to schedule a demo of the MindBridge risk discovery platform.

Tools and tips for the audit busy season

September 22, 2022December 8, 2020 by Solon Angel

For most auditors, surviving another audit busy season can be a rough ride. Between the 60-80-hour workweeks and the constant pressure to meet deadlines, there’s little time to rest, gather with family or friends, or enjoy personal hobbies. The reality is that stress is at an all-time high during the audit busy season, and many auditors can reach the brink of burnout.

The COVID-19 pandemic and work-from-home mandates have made things harder for some. Auditors not only have to work extra-long days, but there are fewer chances to break away from the desk and get some much-needed downtime. As the lines between work and home become even more blurred, there’s a serious risk for increased mental health crises.

Auditors are also having to juggle the inherent challenges of remote audits. Everything from trying to figure how to securely access client information and ensuring cybersecurity best practices, to scouring financial data to detect rising cases of fraud put even more pressure on auditors.

Below, we share some tips and best practices that can help auditors prioritize self-care and ease the stresses of the busy audit season.

Top 5 best practices for the audit busy season

1 – Choose the right auditing tools

Conducting effective remote audits begins with selecting the right audit tools. Everything must be considered, from how an audit team will communicate with clients to how files will be shared.

For instance, using a cloud-based AI auditing platform can simplify the sharing of financial data. Clients can quickly upload files into the secure AI platform, allowing the audit team to remotely access and analyze information. With AI power at hand, auditors can also run multiple algorithms across all client transactions simultaneously and cross-correlate data using dozens of testing criteria. This gives them a clearer picture of potential risks.

2 – Prioritize your personal wellbeing during audit busy season

Working from home for long periods of time can wreak havoc on anyone’s mental and physical health. Coupling this with the added stresses of the audit busy season, and auditors become highly susceptible to burnout.

Scheduling short bouts of exercise, yoga, or meditation each day can make a big difference. According to the Anxiety and Depression Association of America, even taking five minutes for light physical movement can reduce stress and stimulate anti-anxiety effects. Auditors who take time to prioritize self-care, get outside for walks, and use meditation apps will be able to better manage the stresses of the busy audit season. Plus, you may even produce better work.

3 – Ease the wake-up-and-work rush of the busy season

Before getting to the at-home workspace, auditors can plan some time for a burst of exercise and home-cooked breakfast or jump in the car to snag a latte at their favorite drive-through coffee shop. These small tasks bring some level of normalcy and variety to what can feel like endless days of remote auditing.

As well, setting firm boundaries around when a workday begins and ends will help auditors delineate work from quality time with family or simple relaxation. Working from home doesn’t have to mean that you’re “always on” or “always available.” This mindset is a one-way ticket to Burnout City.

4 – Re-evaluate auditing best practices

Auditing methodologies and best practices evolve constantly. This is especially true as new technologies become more widely accepted and used in auditing practices. To minimize stress and ensure the highest quality audits and risk assessments, auditors should always take some time to review any updates on audit methodologies and standards. This allows audit teams to better plan for audit engagements and ensures they’re using the most current information to handle their remote audits.

For example, check out our recent blog titled ‘How the new SAS-142 audit evidence standard embraces technology and automation.’

5 – Keep up with developing cyber risks

Working on remote audits while trying to meet looming deadlines is hard enough. But today, it’s become even more imperative for auditors to stay informed about the latest cyber risks and take action to prevent data breaches. The best way to do this is by partnering with transparent and trustworthy technology partners. Auditing firms should vet technology providers by asking about their cybersecurity policies and initiatives, their accreditations and certifications, and any accessible tools that ensure the highest level of resilience to cyber attacks.

Delivering quality work efficiently during the audit busy season

As another busy audit season approaches and remote audits become the new norm, auditors need to rethink how they’re going to manage the current and upcoming stresses and challenges. By implementing the right strategies and tools, auditors can better navigate the audit busy season without reaching a state of complete exhaustion. More than that, they can retain the highest quality of audits and assessments, without compromising data privacy and security.

Wondering how you can streamline your remote audits? Contact our team to schedule a quick demo of our AI auditing platform.

Want to learn how AI can empower finance leaders of the future? Watch the on-demand webinar now.

Want to learn how AI can empower finance leaders of the future?

A better approach to journal entry testing: Audit analytics automation

May 26, 2022September 7, 2020 by Solon Angel

Internet companies have been driven by data for decades. For instance, Amazon was using basic AI systems over 20 years ago. Netflix, Microsoft, Google and many others have dominated their categories by using a data and algorithms-first approach. Yet when we look at the accounting world, many still believe that data and analytics are a novelty, optional, or separate from the work that they do.

When it comes specifically to journal entry testing, most auditors today have been using antiquated approaches and sampling techniques. Many justify the use of these limited audit risk methods by saying they comply with existing standards. But these standards such as SAS 99, Consideration of Fraud, actually only require auditors to gain an understanding of the business and focus on identifying items that warrant further auditor considerations.

According to SAS 99 or other international standards, there is nothing to discredit the use of advanced methodology and latest AI-powered technologies. In fact, almost 20 years ago, the American Institute of CPAs published the 2003-02 Practice Alert with guidance for the use of analytics. Today, recent advancements in auditing software allow accountants to better evaluate audit risks and deliver pertinent insights to various stakeholders.

The challenges with traditional journal entry testing

Traditionally, accountants had a lot of groundwork to do during an audit risk assessment. First, they would spend a considerable amount of time doing data preparation on usually limited data columns and file sizes. Then, they would try to determine which analytics to apply to the data.

As Enterprise resource planning (ERP) systems grow more complex, not all audit procedures can keep up. Data clipping or manually converting a GL report into an Excel file is known to exclude data or cause errors during the audit process.

Existing script-based data analytics engines are exclusionary based, meaning they extract data as an auditor applies various procedures. This decreases the chance of detecting anomalies and doesn’t allow for a truly comprehensive audit risk assessment. This is why many leading accounting firms, including the Big Four, are moving away from these outdated auditing procedures. These more traditional methods for risk-based journal entry testing cause inherent liability and poor quality.

Using more advanced AI-powered auditing software, an audit team can gain more far-reaching insight. By pinpointing control points, the AI auditing software can identify and learn what’s normal or not and then analyze a wider range of data without inherent exclusions.

3 ways to automate risk-based journal entry testing

1. Start with a data-first approach

Before thinking about which audit tests or procedures to apply, you need to start with the data. This is called a bottom-up approach to audit risk assessment, instead of top-down. The idea is to let the data speak first. Then, you can look for standard procedures and identify any underlying risks.

Seek to get as much information on the system available as possible from your client: GL reports, Charts of Accounts, opening and closing balances, bank statements, as well as the previous year’s data.

With this modern approach, you can leverage historical data in new ways. This can include automatically doing pre-emptive calculations and forecasts to better understand potential audit risks.

For example, MindBridge Ai Auditor automatically generates ratios and forecasts that you can annotate and add to your audit plan, seamlessly.

2. Leverage the community effect

Try to avoid reinventing the wheel and be curious of what automation can accomplish. It is not just about using new auditing technology. Try to understand the definition of risk that is built into the automation. A few AI or cloud accounting software vendors like MindBridge have spent countless hours with industry partners embedding specific risk analysis into their software packages.

Auditors are required to “test the appropriateness of journal entries recorded in the general ledger and other adjustments”. In the past, you would have had to define the procedures yourself. But today, with everyone connected online, communities have emerged around your choice of tools. These communities include other accountants that might have implemented fully automated procedures into their methodology and are eager to contribute best practices and tips with others.

During the Influence 2020 conference, some MindBridge Ai Auditor customers such as Baldwin CPAs and GRF CPAs shared their first-hand experience of using our AI accounting software as well as practical advice for other users.

3. Pay attention to complex transactions

Your clients are not in the business of ensuring the right controls or worrying about anything else other than running their business. They simply don’t anticipate bad behavior, bad actors, or white-collar criminals. It is not enough to just design procedures or automate the classic CAATs-style audit tests. Instead, you can leverage the full power of advanced audit risk assessment techniques such as “Rare Flows” and “Expert score” using powerful AI auditing software. These improve your ability to detect high-risk transactions or the sidestepping of the company’s internal controls.

Some employees, including senior management learn ways to work around a specific control. For example, employees can post numerous smaller journal entries to various departmental general ledgers to circumvent approval processes. This also makes it more difficult for auditors to detect the fraud.

This is where AI can excel and really help you. Rare flows and unusual transaction analysis can help you quickly identify audit risks and conduct a more thorough journal entry testing. After saving time on the previous tasks, you will be able to dig into the data and ask the right questions.

Evolving audit risk assessments and your business

Accountants and auditors are not here just to perform repetitive tasks or follow outdated procedures. The core principle of the profession is to be business advisors to their clients.

By using advanced technology for risk-based journal entry testing, auditors can streamline the auditing process and avoid spending billable hours digging for issues in only one area. Instead of limiting themselves to simply extracting data from a general ledger, they can ask for more reports and more data. This allows them to get a deeper understanding of all the anomalies in client files to perform a more thorough audit risk assessment.

With greater automation in journal entry testing, auditors will be able to get more insights from a larger dataset in minutes, and their clients will notice. That’s because after using AI accounting software in the auditing process, the audit team will be able to ask more relevant questions that lead to smarter business outcomes.

Want to learn more about the benefits of AI auditing software? Read how K·Coe Isom embraces AI accounting technology to gain new insights into their clients’ businesses.

Coffee With a Professional in Accounting: Taryn Abate

June 2, 2022January 16, 2018 by Solon Angel

An interview with Taryn Abate, Director, Audit & Assurance — Research, Guidance and Support, Chartered Professional Accountants of Canada

I recently met with Taryn Abate, Director, Audit & Assurance – Research, Guidance and Support at Chartered Professional Accountants of Canada (CPA Canada) at the Digital CPA conference.

This conference is hosted by CPA.com and the AICPA and attracts leaders within the industry who truly embrace the digital CPA era, so no doubt it made sense for MindBridge to attend.

Taryn is a thought leader in the CPA space and after completing her CA designation in 2009, has held key positions in firms like MNP LLP, the Institute of Chartered Professional Accountants (CPA) of Ontario, and now with CPA Canada.

I chatted with Taryn about her thoughts on the massive disruption occurring in the audit profession and how innovative technologies like Artificial Intelligence (AI) and blockchain can be leveraged for auditors to graduate towards more of an advisory role. Below is an excerpt from our discussion.

Solon: What did you like the most out of the last two days, out of all the conversations, vendors’ booths, and the work groups? If you had to come back home and say, “I spent two days with hundreds of CPAs and here’s how I feel about the profession,” what would you say?

Taryn: The keynotes from both days were a fantastic frame of reference for the conference and the profession.

Mark Randolph, Netflix co-founder, on the first day talked about innovation; the importance of having an idea, having a tolerance for risk, and having confidence and optimism in everything you do.

Barry Melancon, CEO of the American Institute of CPAs (AICPA), started off the second day by discussing the state of the profession. Technology’s impact on the auditing profession was a trend/theme throughout the conference, focusing on blockchain, AI and data analytics. It was pretty much in every session that I went to. I heard discussions on how practitioners are going to start to use these technologies. It was amazing to hear everyone embrace the idea that these technologies are here, and the fact that it is going to change how we audit and what we are auditing.

Solon: Of the discussions you had with people in the room, do you agree that everyone is more or less ready for innovation? Do you think they know where to start?

Taryn: We have a tiny segment of the bigger population here. These practitioners have accepted the idea of digital transformation and understand the benefits of the new technologies. But, not everyone in the business community has reached this stage. We’re on a journey here, and that’s why CPA Canada has identified audit as a strategic priority. We are working with stakeholders around the globe to understand current challenges facing the profession, identify future needs and explore how the profession must evolve to meet these challenges and opportunities.

CPA Canada and other organizations such as the AICPA are preparing guidance to help members and other stakeholders adapt to an ever-evolving operating environment. Stay tuned for upcoming publications on blockchain and AI and the implication of these technologies on the audit and assurance profession.

Solon: I have to say I’m very impressed with CPA Canada.

Taryn: Me too, and thank you. We are committed to helping our profession and members navigate this changing environment. Our goal is to ensure that our profession and members are well-positioned to take advantage of opportunities associated the evolving technologies. Stay tuned.

Solon: CPA Canada has a TV ad — the one about driving change with the CD player guy, and I loved it. I also saw a poster at the Billy Bishop Airport that asks, “Will machine learning replace human know-how?” and then says, “Ask a CPA.” I have to ask you about that one. Who had that idea?

Taryn: That’s from our current national brand campaign that asks tough and timely questions about the changing business landscape. I think it’s great. It catches your interest and makes you think about innovation and the future and what organizations need to do to stay relevant.

Canadian CPAs have a solid foundation of technical and enabling skills, and we see those skills becoming even more relevant in a world that is increasingly volatile, uncertain and complex.

That’s why preparing the profession for the future is a key focus at CPA Canada. It’s about understanding emerging technologies and utilizing the data, identifying trends and bringing insight into strategy development to help organizations achieve long-term success. As the pace of innovation increases and new technologies continue to spread, the disruption of business models and processes will require rapid adaptation.

Solon: That’s for sure. I was just flying back from a conference reassuring people that AI is not going to take their job away, and then I see that ad…

Taryn: You see an article one day that says AI or blockchain is going to replace audit, completely replace 88% of jobs. Then last week, Forbes produces an article saying in four out of five companies, AI will create new jobs.

We need to reinforce that with technology comes change but that can include opportunities. This is again why helping our members and other stakeholders prepare for the future is so important to CPA Canada.

Solon: I think there are a lot more job opportunities. That is my company MindBridge’s view and vision too. We believe there is going to be a surge of demand that will be for more digitalized solutions that will be easier to access. It is also going to generate new capacities within the marketplace. That’s my personal view too, so I’m glad that you believe in it as well…but is it fair to say that there is fear anytime there’s innovation?

Taryn: Yes. People were scared when computers came in, but they made us smarter and more efficient. And, while computers may have led to the elimination of some jobs, they are responsible for the creation of many others.

Solon: People here at DCPA ‘17 are embracing innovation, but they’re not sure exactly where to start all the time. They rely a lot on the product community here and their peers to guide them. You live and breathe the profession, go to many industry events and know the mandate of CPA Canada. How would you explain the benefits of AI and blockchain technologies to a senior partner that is in the grind, has a medium-sized practice and doesn’t have time to come to these conferences? What advice would you give him or her to understand what the profession is going through right now and how it may change?

Taryn: My advice to all would be to prepare yourself for challenges posed by globalization and technology. Stay abreast of changes in the business world, get familiar with new technologies and proactively assess the implications.

For small to medium-sized practices that may be resource-constrained, I encourage them to check out our available resources and be aware that more are on the way.

The most important call to action is to start now when it comes to assessing what the operating landscape is going to look like for your organization. Identify the challenges and meet them head-on.

Solon: To your point, some of the more prominent partners who are engaging with our vision are moving pretty fast on that.

Taryn: In general terms, it’s important to be aware of everything that’s happening out there. Be honest to yourself and don’t pretend that change hasn’t arrived. More specifically, as an auditor, you look at the problems in a company and help your clients address any pain points, and for that, you must use the appropriate tools. If you don’t have the proper tools, guidance or information, help is available. Taking action today can pave the way for long-term success.

Solon: I recently met a very cool CPA, Natalie Quan, CFO of the CalCPA Association, who was also the controller for the San Francisco Ballet. Who is the coolest CPA you have ever met?

Taryn: We meet a lot of interesting and inspiring people through the work we do at CPA Canada. We work with subject matter experts in Canada and globally, to help the profession and for that reason, I couldn’t pick just one.

Solon: What is the most exciting story you heard?

Taryn: Technology today moves rapidly, resulting in many exciting stories.

Of particular note, I would reference Alan Wunsche, a blockchain expert CPA Canada works with, and he launched Token Funder on November 1st with the Ontario Securities Commission; the province’s first regulated token offering.

My job is a blessing because I get to work with many respected thought leaders and hear how they are moving forward in today’s global economy. It’s amazing to see the innovation that is happening all around us.

Solon: You seem to be doing a great job, and you seem to enjoy it so, congratulations.

Taryn: I certainly do!

Solon: Thank you for your time. The readers are going to enjoy this blog post.

Originally posted on Solon Angel’s Linkedin and can be accessed here.

Making business sense by automating repetitive audit tasks with machine learning and AI algorithms—An interview with Angelique Koopman

December 18, 2020October 18, 2017 by Solon Angel

What better way to start the first post in the “CPAs” series than with a world-class lady. Angelique Koopman, Partner Audit Innovation at Baker Tilly Berk, has been following MindBridge since our early days and recently visited our office. We could not resist asking her a lot of questions.

In this series, we will interview various CPAs in the profession as we travel across the globe, asking them for their opinions and personal stories. If you ever would like to share your own experience as a CPA, please do not hesitate to reach out directly.

Solon: Where do you think analytics and artificial intelligence (AI) would be the most useful in the audit process today?

Angelique: Planning and risk assessment are often based on professional judgment. And what I would like to see is the use of more data analytics in the planning phase of the audit so we can substantiate our considerations and our risk assessments with facts (quantitative data). This way we are collecting evidence to support our risk assessments early on.

Solon: So how should we address that deficiency, and what impact do you think it has during the audit process? What surprised me recently is that there are firms that do it in the review phase, then they miss something, and they have to go back. If you do integrate next-generation AI systems in the planning phase, do you think it would help to decrease this need to re-do portions of the audit?

Angelique: Yes, when you are doing your risk assessment or your planning, it’s better to have a set of preliminary analytics based on facts. That way, you can substantiate the choices you make which can help you decide to perform all the procedures or just a subset of procedures. Right now, we do risk assessments to limit the audit work. If you do not plan your audit well enough, at the end of an audit, you will find that you missed something somewhere and then you have to go back and do additional work, and I believe this is one of the best arguments for using analytics more in the planning phase.

Solon: At the end of the day, is it just about analytics, or are there other industry best practices we can also be including?

Angelique: It is the combination. It’s a combination of automating rigorous procedures and it’s about automating specific aspects related to the industry. I strongly believe in an industry driven approach. It is more of the rule-based part using the industry expertise. But I also believe that analytics must be used in combination with the auditor with all his knowledge and the holistic view of the client. Giving the auditor the technology to do better, to improve professional judgment, to improve decisions based on intuition or feeling and to substantiate those decisions more comprehensively. That is really important. To be honest, I don’t believe in just having a tool or platform only, because, in the end, an auditor needs to evaluate the outcome. But what you can do is help the auditor from performing tedious tasks that could otherwise be automated. Such tools provide the auditor with more insights and knowledge such as making cross-references and analyzing data from more than one dimension. What we normally do with audit analytics, is that we have a question, then we build the query and the query gives an answer that’s different, so I believe in the combination of both analytics and best practices in combination, that it will help auditors become more focused on delivering better results.

Solon: There is a lot of confusion over the role AI plays in the audit. What would you tell a traditional audit partner who is evaluating if he/she should leverage machine learning and artificial intelligence (AI)?

Angelique: Mostly when people hear about AI, they believe that it is science fiction. And they might think it is in the preliminary stage and are not aware of the fact that nowadays lots of things in our society are run by algorithms. We use them everywhere. Unfortunately, we are not using it in the audit on a large scale yet. Maybe, we think it is scary. However, when we get into a plane, we fully trust the airplane, but in the audit world, we do not trust algorithms yet. Basically, it’s about combining statistical methods with machine learning. So I think they need to know what machine learning is and how it works. We have to explain it with simple examples, like how does a program operate and learn? As an example how to identify a cat from a picture? In fact, AI is about automating tasks that are beyond the capacity of human beings. Machine learning is a way of making complex analysis possible. Automating repetitive audit tasks makes even greater business sense when you combine it with machine learning and AI algorithms.

Solon: People talk about the robot taking the job of an accountant…

Angelique: It’s very similar to the team that supports you when you are auditing a bank, and the bank has financial instruments, and you have team members who are specialized in that type of audit; they have the know-how of the financial instruments. Or when you are auditing a real estate company, you use the expertise of people who know that space, you cannot do it by yourself. It’s only expertise enshrined in a computer program. That’s the difference.

I was telling Robin and Eli, knowing that this technology is here, and at this point, it would be hard to go back to audit and do the role I used to do without leveraging this technology. I can clearly see the value it adds, I can do a manual sample, but recognizing that with AI I can sample the whole ledger with a higher degree of assurance. And given that it is my signature on that audit statements, I want to do the best job with the best tools available.

Solon: So using artificial intelligence (AI) is going to become a matter of professional integrity?

Angelique: I think, this is something in the audit community which is starting now. And I gave the same message at a recent conference in Belgium. People start to think about it, and they are starting to say, “Yes, why not? Change is coming!”

Originally posted on Solon Angel’s Linkedin post