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Easing into automation: How to finally digitally transform

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For my entire 20-year career, the CPA profession has warned of the coming technological disruption. The need for digital transformation has been a topic at every conference I have attended and regularly finds its way to the cover of accounting publications. While we’ve come a long way from the paperless initiatives of the early 2000s, many of the core systems supporting firms today look very similar to what they did when I entered the workforce. 

While other industries rapidly adopt data-driven solutions like artificial intelligence, many CPA firms still rely on spreadsheets and processes that merely digitize the traditional paper-based approach. These legacy systems haven’t prevented success and avoid the risks of retooling and reskilling employees, but staying in the past fails to capitalize on the incredible software available today.

That’s not to say firms haven’t tried or don’t understand the opportunities available to them. The historical reality is that the current systems work, change is hard, and many of the traditional approaches to digital transformation require a complete system overhaul all at once. However, those realities have changed dramatically in the last couple of years with new tools that simplify adoption, allow for small iterative enhancements, and create real threats to leave you behind if you ignore them. 

It starts with culture

The technology available to support digital work today is nothing short of breathtaking as many of the promises of cloud technology are being realized. We’ve experienced a true renaissance with tools that are inexpensive, easy to adopt, and sometimes make you feel like a wizard. 

However, the tools aren’t actual magic. We are still waiting for the technological discovery that overcomes poorly designed processes, and we continue to be grounded in the traditional rules and logic that require new skills and organizational alignment. Success requires changes to be embraced and celebrated across the firm, from support staff to partners in corner offices.

The shift in mindset is the most significant hill to climb, but it doesn’t have to be painful or even hard. When you show people a better way to work and an opportunity to be more effective, it’s easier to rally support. The conversation needs to be about more than higher margins and fear of being left behind — the real magic of a digitally driven professional services firm is that it empowers people to help clients and reduce stress. 

Take inventory and find small opportunities

The initial challenge is recognizing the opportunity to expand technology use for everyday tasks and understanding where to begin. Numerous small, seemingly insignificant gains can collectively lead to a substantial shift in how we serve clients, enabling easier monitoring, asynchronous work and more accurate deliverables, among many other benefits. 

These sorts of iterative and continuous changes can be hard, but being intentional about the systems you adopt and the types of experiments you conduct becomes your biggest asset. 

Here are a few vital steps to help you get started as you adopt new technology in your firm:

  • Address fears and challenges: Examine why your firm hasn’t embraced the innovations we’ve seen in the compliance space. Common barriers include fear of change, adoption costs and required knowledge, all of which can be overcome with the right approach and mindset.
  • Start small: Begin by integrating the tools you’re already using, so they communicate with each other, and you can ensure data security at every transfer point. As you gain confidence, identify your firm’s biggest pain points and brainstorm the best ways to tackle them.
  • Thoughtfully consider budget: While the cost of implementing new tools can be a deterrent, many modern solutions are more affordable than expected. With the tremendous software available and marketplaces offering consultants to help you get started, the barriers to entry are lower than ever.

Analyze the best tools for your compliance firm

Think holistically about your tech stack and how tools work together, from your email to the systems you use for research, documentation, and client collaboration. The number of tools available is vast, and while many do similar things, each typically has some nuance. It’s essential to know what you need and thoroughly research to find the right fit. 

The best part is that most of these tools offer free trials and live demos, so you can see the product and ask questions, learn more, and try them out before investing time and money. For those who don’t feel comfortable implementing tools themselves, many great IT consultants can lead you through the selection process and potentially help you onboard and integrate new tools. 

If you want to build the tools and knowledge internally and fully tailor your firm’s digital programs from scratch, AI can help significantly as you learn to write and debug code. If you have zero coding experience, that is no longer an issue with low-code and no-code platforms that do the tough programming part for you, allowing you to personalize and design tools specifically for your firm’s needs.

Implement technology smoothly

Adopting new tools and changing processes can be challenging, particularly for employees. 

Here are some tips for smooth implementation:

  • Introduce tools gradually: Avoid overwhelming your team with too many new tools at once. Be intentional and roll them out at a comfortable pace with clear instructions, expectations and documentation. 
  • Provide comprehensive training: Offer high-level group training followed by individual sessions with subject matter experts to address specific questions. 
  • Foster a supportive culture: Some team members may initially resist new tools, preferring traditional methods. Be patient because, over time, they will recognize the benefits and time savings, allowing them to focus on more interesting and valuable tasks. 
  • Document and iterate: Create clear documentation for new processes and be open to feedback and adjustments as your team adapts and finds new ways of working.

The journey to a truly digitally driven firm requires curiosity, patience and a willingness to embrace change. Be open to continuous learning opportunities, and as technology evolves, so should your firm. This transformation won’t happen overnight. It’s a gradual process that involves overcoming initial fears, making informed decisions, and fostering a strong culture that supports innovation.

By taking these steps, you’ll position your firm for gains in efficiency and long-term success. Embrace the journey, trust the process, and watch as your firm becomes more dynamic, innovative, and client-focused. The future of compliance is digital, and the time to start is now.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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