Cloud ethics: How much trust should we put into accounting tech?

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Freddie Faure, director of Cooper Faure, raises some interesting questions around the reliance on cloud systems, increasing automation and the impact on what it means to be an accountant.

While some of this is well-trodden ground, Faure’s view is that although there are many benefits to embracing technology, there are ethical questions going unrecognised, and an increasing difficulty in locating where responsibility and obligations lie.

Stating her motivation as “Wanting to ensure that these questions are asked, not to put barriers in the way, but to allow us to think through proper responses as a profession”, she starts by talking about how reliant firms have already become.

Objectivity and integrity       

“We are a very pro-technology firm, and always have been, but what I’m becoming very aware of is how we rely on, and naturally trust the software we and our clients use,” said Faure.

Freddie Faure

“I know that’s always been the way, but this time it’s different because so much data and information is being passed from one app to another, and with many more complex processes involved.

“So as an accountant we can’t be sure that we know exactly what is going on. As this increases in the future it raises the question about quality. If we are processing by pressing a button, do we really understand what is happening?”

For Faure, this is an ethical question. Through embracing technology, and surrendering an understanding of the processes, how can we guarantee that we are providing a quality and accurate service, as well as demonstrate professional scepticism?

“We can form a judgement of what we think an answer might or should be. But when it comes to engaging with more complex questions, if we are going to rely on technology (like AI) to come up with answers for us, what does that mean for our role as both technician and analyst?

“So my first question is: as a tech embracing accountant, how much should we seek to retain an in-depth knowledge of the processes that are increasingly dictating the way services are delivered?”

It also raises the challenge of the safety and safeguarding of the data.

Safety of data

“We are used to being the gatekeeper and the person who can control and manipulate the data. Some of the inputting side we know doesn’t hold much value but even this needs to be done correctly.

“So, when we have a system of interconnected apps and analysis sitting over the top, we are letting in others very easily. We are reliant on the privacy policies and integrity of our suppliers, their security systems and commitment to development,” continued Faure.

Access via APIs is providing great opportunities for the efficient passing of data, but with each link in the chain we are creating a very challenging environment to understanding how the terms and conditions and contracts apply to each other.

“Do we really know the impact of creating these data ‘supply chains’ if things go wrong?” said Faure. “If something bad did happen, could it be actually quite hard to understand who has ultimate responsibility?”

The concern for accountants could therefore simply be a PI one, “If things go wrong it will be me that has to repair the relationship with the client, but might it also create one where I am liable, but I don’t know why or how”.

For Faure this is a complex environment we are creating, and one that seems to take us away from the traditional role of the accountant.

Therefore, the question is will everyone be able to cope?

No one gets left behind

Faure is concerned that in such a world there is a risk that both accountants and their clients could start to fall back if they are unable to stay on top:

“Accountants often have a professional obligation but are not legally responsible for implementing government lead initiatives with clients. RTI, XBRL, and auto enrolment are obvious recent examples where the investigation, purchasing and rolling out technology to taxpayers has often fallen to them.

“MTD is very relevant here of course. We can’t and don’t want to be in a position where we are unable or unwilling to help people. But there is a real cost which is hard to ignore, and some of this is bound up in keeping on top of an increasingly complex technology commitment.”

Will the profession tolerate its peers as well as other businesses being left behind if they cannot cope? Faure further asked: “Is technology now an absolute professional commitment and if so how do you measure and enforce it?”

The paradox, as she pointed out, is that “We also need to think about the accountants of the future, who also risk being left behind”.

Next generation

“We’ve seen first-hand how the study regime for trainees is increasingly falling behind: the curriculum is not keeping pace with the reality of what is needed. Increasingly, employees don’t have the skills to do the qualitative part of the role and they assume software will do it for them.

“My concern is how do you learn to be the person who has to sit between the quality of data and the computer if you don’t fully understand what is going on?”

In an environment where recruitment and skills are already critical issues, what is the impact if we are not qualifying people to perform professionally? “Are we creating a generation who lack the ability to apply critical thinking?” asked Faure.  

This poses a real challenge to the guardians of professional qualifications and standards, who without real engagement could actually be undermining both.

As we look forward if staff need to be doing things differently, it means that our systems have continued to change at pace too.

Internal processes

Faure argued that “More automation brings more technology. In fact, technology just seems to demand more technology, and then you need to have more understanding”.

Added to this, in an increasingly digital tax environment where process itself is mandated Faure questioned: “Will our compliance role in the future be as much about policing systems as driving results?”

Demanding broader answers

Accountancy is not the only profession that is living through substantial changes brought on by technology adoption. Faure remains upbeat about the challenges ahead, but is clear that this is a wider debate: “These are questions that as individual accountants we should not be thinking about alone or between ourselves, and we should demand more input from the institutes and software community too”.

About Richard Sergeant

Richard Sergeant

Specialist insight and business development support for accountants and their vendors. Cloud advocate with a pragmatist eye.

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12th Apr 2019 13:04

It is not a question of "Trust".
Through this first generation of Digital users, as with children we believed in the magic, and the excitement.
This was OK.
I am sure the inventor of the first stone axe was really excited at his new thingy. That is until the head fell off and broke his toe.
These digital things are nevertheless machines. As with all machines they will go wrong. Only God is infallible. The devil invented computers.
So, if I go out on a boat, I wear a life jacket, carry a flare, and keep those onshore informed. I do not board airplanes unless I am satisfied about their maintenance and safety record. Even though my first trip was in 1967, I still insure every time.
Why?
because in my universe good things are optional but [***] is certain.
For some psychological reason ordinary quite sane persons ignore those eternal lessons.
I am sure that all of us who read this note are aware how to keep ourselves digitally safe.
Sadly I will make a safe bet that at least 50% of us (me included) still behave as if fairies at the bottom of the garden are more likely than "My" IT [***] up.

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13th Apr 2019 11:08

I think this technology is a given and we either embrace it or die. Ultimately I am a small practice but have most clients already on a suitable platform and so MTD has become just a matter of doing the HMRC thing and telling QuickBooks the client is now on MTD. In terms of trusting these new processes I guess that I am one of the lucky ones in that having learned all this using a paper and pen I understand what it should be doing and have an insight into the answers provided.

Those who grow up on these things may not understand the process from this number t that one and so will less easily spot when things go wrong - especially if the training doesn't cover it (and it should).

The truth is that this has been a steady process from the early 90's onward. We had spreadsheets rather than squared paper. We got tax return software, then HMRC invited us to submit online wth ELS. Back then the forums were indignant with people saying why should we help HMRC why should we do this for them? The luddites often missed the fact that repayments came more quickly, that tax returns hit HMRC as I had sent not with errors added by HMRC inputters. Would anyone really want to go back to printing out tax returns and posting them to HMRC? If so is that best for your clients?

The issue is that for those who have refused as much of this as possible the leap is great to catch up. Most of these things bring pluses as well as minuses. All my VAT reg clients are on accounting software (whether they know it or not). I do their stuff quarterly and their accounts are the easiest to do at their year end. So roll on full MTD as my goal is an easier life. All done quarterly - if I'm doing everyone each quarter I will have time as I will not be doing the whole annual accounts for anyone. Each quarter will be balanced up and OK. So then just the clever bit from bookkeeping to annual accounts to do.

I'm not suggesting it's all rosy as HMRC IT is poor - but as I don't have to make software decisions and move people onto a suitable platform I can deal with the issues that present. Good accounting software has been around for a very long time. MTD was mooted long enough ago that we should all have realised we will need to do something and that spreadsheets won't do anymore.

So for me I'll adopt the tech I think is useful and serves me and my clients. Clients who like that we can share their accounting data. that I can see all their invoices in their software without them having to courier their files to me, where they can be up to date and get real business value from their data as we can report on last week as the invoices have come through receipt bank and the bank feed has picked up a lot of the rest or that their websales are in their accounts directly via an online link. HMRC want what? - we had that covered last year....

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14th Apr 2019 16:08

Unfortunately this article tells us nothing we don't already know. The problem in any industry is that technology is moving ahead far too fast and (yes I'll say it again for new readers) we are heading for a technological disaster with the gap between "high techies" and "low techies" ever widening, but it's also coming into everyday life . I watch a program called click and, although really interesting, it's sometimes very frightening.

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to johnjenkins
15th Apr 2019 13:29

Thanks Johnjenkins, Freddie's focus on the issue of ethics and responsibility is an interesting angle here though.

Her point is to keep things on the table, rather than just accept.

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to rsergeant
15th Apr 2019 14:52

Unfortunately we can't keep things on the table because most of the big boys, even our Government insist on the new technology being mandatory. There are certain restaurants and pubs that only handle new tech. MTD is an absolute classic. To most of us, digital input is routine, but not to all. So why should these ordinary people be made to adopt. You don't have to drive a car if you don't want to, so why should all this new tech be mandatory? What's so special about it? Oh yes, Government and Financial Institutions have access to all our movements etc. A big sales gimmick that will come crashing down.

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