In keeping with current trends, the Department of Accounting has spent the last year evaluating the curriculum for opportunities to include emerging technologies such as data analytics into the its course work. Part of a long-term project, the department is examining how to incorporate technology into current classes and how to provide additional coursework in these subjects in an effort to better prepare students for careers in the accounting industry.
“It’s changing rapidly and drastically,” Professor Elizabeth Gordon, chair of the department’s curriculum committee, says of the industry. “And so we have to change the way we’re teaching. We’ve gone out and talked with a lot of the accounting firms. We’ve talked with publishers and talked with other teaching resource providers to understand what is available, what’s out there that we can adopt or adapt for our courses as needed.”
Undergraduate students benefit from Accounting Information Systems, a core accounting course, that covers data creation and manipulation, statistical analysis and data management. Students use Access to to explore how to manage and analyze data; the course also includes an introduction to data visualization.
This semester a number of other courses have integrated data analytics and data visualization into the curriculum. Professors Jagan Krishnan and Sheri Risler added an ACL Certified Data Analyst Level 1 Certification to their auditing class. Students learn the process by which data are obtained, cleansed, analyzed and transformed into information using analytic routines. ACL software is used across the accounting industry for fraud detection and prevention.
Professor Cory Ng has incorporated Tableau, an interactive data visualization software, into a graduate level course. Students in the class not only learn how to use the software, but also how to apply it to complex financial and non-financial data and to use it to make intelligent business decisions.
“Each student is required to deliver a final project that uses Tableau to visualize a complex data set. The deliverable for this project is a data visualization using an executive dashboard or story point that enables a user to explore the data,” explains Ng. Additionally, students have to prepare a manual on how to use the visualization to explore the data, requiring them to strategically consider the user’s experience.
The goal is not only to teach the students how to use use these tools, but also to teach them how the tools can assist with problem-solving and decision-making. The critical thinking skills developed with these classes will be transferable to many other software programs and real-world situations.
“I firmly believe that students will benefit from developing these skills in their studies and their careers,” say Ng. His students report that they expect to use data visualization in professional settings and that these skills make them more marketable to potential employers.
Professors Risler and Ng discussed the development of their data visualization courses in the Fall 2018 Pennsylvania CPA Journal.
Department of Accounting at the Fox School of Business is pleased to announce the honorees of the 2019 Accounting Achievement Awards. These distinguished alumni will be recognized at the third annual awards ceremony at the Lucy on Wednesday, May 1. Hosted by the Department of Accounting, the event will recognize the six alumni with awards reflective of their professional careers and civic service:
Kaitlin (Ziminski) Schott, CPA will receive the Rising Star Award, presented to a public or private accounting professional who has demonstrated leadership skills and a commitment to the Fox School. Schott, BBA ’10, is a manager of internal controls at FMC Corporation.
Joseph Fisher, CPA will receive the Public Accounting Award, presented for outstanding success in the public accounting sector. Fisher, BBA ’93, is a partner in Deloitte’s Investment Management practice and serves as the National Investment Management Audit Leader. He has 25 years of experience in serving clients in the capital markets, including hedge and private equity funds.
Albert Chiaradonna will receive the Corporate Award, presented to an executive-level professional who has responsibility for the financial operations of their organization and has demonstrated industry expertise. Chiaradonna, BBA ’88, is the Senior Vice President, SEI Wealth Platform, North America Private Banking and is responsible for the overall launch and delivery of the SEI Wealth Platform.
Frank Breslin, CPA, will receive the new Non-Profit/Government Award, presented to a professional who has achieved success in the not-for-profit or government sector. Breslin, BBA ’82, is the Revenue Commissioner and Chief Collections Officer for the City of Philadelphia. He has worked for the government for over 30 years and is also an active member of the Pennsylvania Institute of Certified Public Accountants.
John Milligan, CPA will receive the Community Service Award for outstanding contributions to the accounting profession and local communities. Milligan, BBA ’75, is the founder, CEO and managing principal of Milligan & Company LLC. He served on the board of directors of Children’s Hospital of Philadelphia for twenty years. Milligan also served on the board of directors of Montgomery Hospital in Norristown, chaired the board of directors of the Norristown Area School District Education Foundation, and he is currently the President of the Greater Norristown NAACP.
H. Richard Haverstick, Jr., CPA will receive the Lifetime Achievement Award, presented to a professional who has advanced the accounting profession through their sustained leadership in public accounting, business, or academic communities. Haverstick, BBA ’74, has had a distinguished career in the Philadelphia area, including serving as a partner at EY for over twenty five years. Haverstick is currently a board member of Brandywine Realty Trust, Bryn Mawr Trust Mutual Funds, and Thomas Jefferson University and Jefferson Health, where he has just been named Chair-Elect of the Board of Trustees. Haverstick also is a member of the Fox School of Business Dean’s Council and chair of the Executive Committee of Fox’s Accounting Circle.
The Accounting Achievement Awards honor the accomplishments of Temple University alumni and recognize the impact professionals in accounting and related fields have on the business community. The net proceeds from the event are added to the Accounting Achievement Awards Term Scholarship Fund, which supports high-achieving accounting students pursuing undergraduate and Master of Accountancy (MAcc) degrees.
More details about the awards ceremony and banquet will be available in February.
Greetings from Alter Hall! Here is your Fall 2018 Footnotes from Fox. What have the students, faculty, and our alumni been up to? We search out and dispense the news about department doings to our loyal readers.
We begin with a story about data visualization and analytics. Under the guidance of our departmental curriculum committee, headed by Professor Elizabeth Gordon, we are refurbishing our courses to incorporate career-relevant training. MAcc students work on a case that requires they use Tableau to illustrate visually the whys of decision-making. Undergraduate auditing students have been trained in ACL software. Successful completion of the work they’re given leads to Data Analyst Level I Certification.
Speaking of Elizabeth Gordon, she was chosen to lead the 2019 New Faculty Consortium by the . Over 130 Assistant Professors assemble bearing newly-minted PhD degrees, to be initiated and acculturated by over 30 senior faculty between January 31 and February 3, 2019 at the Lansdowne Resort and Conference Center in Leesburg, Virginia, a convention center in Virginia.
The Fox School Department of Accounting is honored to have been chosen as the newest home for the National Association of State Boards of Accountancy (NASBA) Student Center for the Public Trust (StudentCPT). This group focuses on ethical decision making and leadership. The group hosts speakers who come to share their experiences dealing with challenges related to ethics in corporate settings.
Our next story reports on the honors, research accomplishments, and recognition afforded three of our number: Professors Jayanthi Krishnan, Sheri Risler and Cory Ng. In an article in the , Cory and Sheri discuss how they developed their data visualization courses, referred to above.
In late September, the (ACCA) and the hosted a panel discussion on how technology is impacting accounting and auditing. About 60 students—plus a number of faculty including yours truly—attended the event, held in the “Egg” on the first floor of Alter Hall.
We welcome SIX new members to the leadership group—the Accounting Circle Executive Committee—that guides the Department of Accounting. Who might they be? Read the piece and find out! PLUS, the other six communiqués we prepared for your illumination await your attention.
Before I quit, let me remind you that—if you know of a Fox Accounting graduate young or old, just starting or winding up a distinguished career—use the link in the Accounting Achievement Awards advertisement to submit your nomination. I hope you will be able to attend the May 1, 2019 awards banquet, where the honorees will be honored.
As is ever the case, you get full disclosure when you read Footnotes from Fox.
Temple University was identified by the National Association of State Boards of Accountancy (NASBA) for a new chapter of NASBA’s Student Center for the Public Trust (StudentCPT), a national organization promoting ethical decision-making and leadership among college students. The opportunity to participate in this NASBA program was identified by Professor Sheri Risler, a member of the Pennsylvania State Board of Accountancy and the new chapter’s faculty advisor. With sponsorship from Deloitte, the new Temple StudentCPT launched with a special kickoff event on October 10 in Alter Hall on Temple University Main Campus. Over hundred students gathered to hear Alfonzo Alexander, president of NASBA’s Center for the Public Trust.
“Alfonso Alexander really drove home that young professionals need mentors,” says Temple’s StudentCPT president Jennifer Serafino. “If there’s anything we can do well at StudentCPT, it is to show students that ethical dilemmas do not need to be faced alone. It’s through the careful mentorship from programs like StudentCPT that will prepare them to be better ethical leaders in their own places of work.”
StudentCPT promotes ethical decision-making through community service activities and partnerships with the national organization that include the Ethics in Action Video Competition, the StudentCPT Leadership Conference and Ethical Leadership Certification Program. The Temple StudentCPT is one of 40 chapters nationwide and the only chapter in Pennsylvania.
With chapters on college campuses nationwide, the StudentCPT provides an interactive environment where ethical business behaviors and ideas can flourish. Chapters create opportunities for students to network with the business community and develop professional leadership skills with guest speaker events. Temple StudentCPT chapter’s second event was a conversation with For Eyes founder, and Temple professor, Daniel E. Goldberg on starting and sustaining an ethical business.
For more information or to be a guest speaker at StudentCPT event, contact Professor Sheri Risler.
On Monday, September 24, the Fox School of Business, with the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants, hosted a panel discussion on how technology is impacting accounting and auditing. Guest speakers Brian Cassidy, CPA of Deloitte, Andrew Gambier of ACCA, and Giuseppe Venezia, CMA, of Essity spoke about how the industry is changing and how accountants can adapt to these changes.
“What I would tell you is the tools are going to allow you to do better things, more thoughtful things,” said Brian Cassidy, Audit Senior Manager at Deloitte and former Professional Practice Fellow at the Center for Audit Quality. “Those technology tools will help you do better risk assessment, better analysis. It’s also going to give you opportunities that you don’t even recognize you have in front of you.”
Leaders of the department’s student professional organizations moderated the discussion which touched on automation, cyber security, data analytics, industry standards, and more. Members of the audience also had the opportunity to network before the event and to ask questions during a Q&A section.
All three presenters spoke about the way technology might disrupt the profession and provided career advice to the students. Giuseppe Venezia, Americas Business Controller at Essity and EMBA candidate at Temple University, discussed how technology is affecting not only the business, but also the hiring process. He encouraged students to continue learning about emerging technologies such as artificial intelligence and blockchain.
Andrew Gambier, Head of Auditing and Assurance at ACCA, emphasized that while the industry is changing rapidly, there will always be a need for the decision-making and problem-solving that can only be done by accountants.
Merves Research Fellow Jayanthi Krishnan was promoted this fall to full professor. Krishnan joined the Department of Accounting in Fall 2000. She teaches cost accounting and intermediate accounting for undergraduate students, and financial and managerial accounting for the school’s MBA programs. Her research interests are in the areas of audit quality, audit regulations and the impact of international diversification on auditor decision-making.
Dr. Jayanthi Krishnan has been named to the Fox School Dean’s Research Honor Roll and has received the Business Honors Association Teacher of the Year Award, 2008 Musser Excellence in Leadership Award for teaching and several other faculty awards. Krishnan is also the recipient of the 2015 American Accounting Association’s Notable Contribution to the Auditing Literature Award for “Audit Committee Quality and Internal Control: An Empirical Analysis,” printed in The Accounting Review. She is an editor of Auditing: A Journal of Practice & Theory, and serves on the editorial boards of The Accounting Review, Accounting Horizons, and Current Issues in Auditing.
Director of the Master of Accountancy program Sheri Risler, CPA was promoted to Associate Professor of Practice this fall. In 2011, Professor Risler was named the Director of the Fox School Master of Accountancy Program. She has received several faculty awards, including the 2009 Beta Alpha Psi Teacher of the Year Award, the 2012 Master of Accountancy Faculty Award, the 2013 Musser Award for Faculty Service and the 2017 Student Professional Organizations Faculty Award.
Professor Risler is a member of the American Institute of Certified Public Accountants (AICPA) and the Pennsylvania Institute of Certified Public Accountants (PICPA). Risler was the recipient of the 2016 PICPA Volunteer Service Award. In March 2017, she was appointed to the Pennsylvania State Board of Accountancy as a board member for a four-year term. Prior to joining the faculty in 1997, she was an Audit Partner with the Philadelphia office of Ernst & Young where she provided a broad range of services to entrepreneurial, middle market and public companies.
Professor Cory Ng, was named a Dean’s Teaching Fellows by the Center for Innovation in Teaching and Learning for 2018-2019, for his consistent demonstration of innovation and excellence in the classroom. Professor Ng’s professional background as a Certified Public Accountant and as an educator taught him the importance of critical thinking, problem solving, respecting diversity, keeping a global perspective and behaving ethically in the workplace. He is also a Honors Faculty Fellow for 2018-2019 academic year.
Since joining the Department of Accounting in 2015, Ng has developed a new special topics course for the Master of Accountancy program focusing on data visualization using Tableau software. Ng was also the recipient of the Department of Accounting’s Departmental Adjunct Teaching Award for Excellence in the Classroom (2015) and the Student Professional Organization Award (2017). Beyond the Fox School, Ng has published four papers in the Pennsylvania CPA Journal since 2016 and was recently appointed to the Pennsylvania Institute of Certified Public Accountants Board of Directors.
In August 2018, the Department of Accounting hosted over 75 academics for the two-day 100th Anniversary Accounting Conference, bringing together researchers from Finland to Hong Kong. The program featured three keynote addresses and fourteen presentation sessions, and was opened with remarks from the Fox School of Business interim dean Ronald Anderson. The department was especially pleased to welcome back to campus several PhD graduates for the conference and introduced them to the current doctoral students.
Dr. Ray Ball of the University of Chicago Booth School of Business gave the Thursday evening keynote address at dinner in Morgan Hall. His speech was on the criteria for evaluating financial reporting. Also on Thursday, Baruch College’s Dr. Douglas R. Carmichael presented a talk on the challenges facing the accounting profession. Dr. Greg Waymire, of Emory University and Chapman University gave a keynote address on Friday about Adam Smith, the Scottish economist and philosopher and his influence on modern accounting principles.
The Fox School’s Department of Accounting will co-host the 2019 Conference on Convergence of Managerial and Financial Accounting Research with the University of Calgary’s Haskayne School of Business next summer in Lake Louise, Alberta.
William Petty, a senior accounting major, was selected to participate in Temple University Diamond Peer Teacher Program for Spring 2019. The program provides opportunities for students to experience the challenges and rewards of college-level teaching through the Office of the Vice Provost for Undergraduate Studies. Petty will be assisting Professor A.J. Kreimer with the introductory level financial accounting course, meeting regularly with Kreimer and other peer teachers to develop his pedagogical skills. The program only accepts forty students per semester and provides recipients with a small stipend.
Petty is the co-head tutor of the Department of Accounting Tutoring Center, supporting a staff of ten peer tutors. He is also a member of Beta Alpha Psi, the accounting honor society, and he is pursuing a minor in Management Information Systems. Petty has accepted a position with Deloitte as an audit assistant, following his graduation in May.
As chair of the American Accounting Association (AAA) 2019 New Faculty Consortium, Professor Elizabeth Gordon of the Department of Accounting helps support new faculty members during their critical transition from doctoral student to colleague. The annual event brings together over 130 new faculty members and 30 senior faculty members for three-day conference, held this winter in Leesburg, Virginia.
“We want faculty to be able to succeed in the profession, so the AAA has made the commitment, with the funding of Ernst & Young [Foundation] to provide this development opportunity,” says Gordon. “We help them understand and identify what’s expected at their institution.”
A premiere event for the American Accounting Association, the New Faculty Consortium has been running for decades. Gordon attended the conference as a young academic and has presented on balancing research, teaching and service in the past. She was selected to join and chair the New Faculty Consortium Committee because of her commitment to the profession and to the development of the next generation of teachers.
The program’s mission is to support recent doctoral graduates and new faculty members as they develop into successful scholars. The AAA’s working definition of a scholar is “someone who gains new knowledge and disseminates it to others through teaching, research and service to his/her institution, to the academy and to the accounting profession.”
The senior faculty members present on topics such as: enriching your career through service; understanding the editorial process; navigating the research and administrative process; and balancing your career and your personal life. The program also provides valuable workshops on teaching and learning, for attendees who may not have taught as PhD students. Senior faculty also mentor the new faculty in groups and individually, with the hope that the connections built at the conference continue.
For Gordon it is important to include members who have had more challenging career paths. “For some it might have been a bit rockier road and that’s always good for the new faculty to hear,” adds Gordon. “Sometimes you might hit some bumps but your success is out there.”
It’s been a busy fall for the Department of Accounting’s five student professional organizations (SPOs): Ascend, Beta Alpha Psi, Fox Accounting Association, Institute of Management Accountants Temple Chapter and National Association of Black Accountants. The SPOs welcomed representatives from Baker Tilly, Deloitte, Ernst & Young, Johnson & Johnson, JP Morgan, KPMG, MPI Business Valuation and Consulting, PWC, RSM, SEI and Susquehanna International Group to campus.
Beta Alpha Psi (BAP), the national accounting honors society, hosted an evening recruiters at the start of the year as part of the school’s Accounting Week. Representatives from over twenty organizations attended the event in the Undergraduate Commons of Alter Hall. Ascend brought together students and professionals for their 7th Annual Kickball Tournament, a casual networking and charity event for accounting and finance companies.
With sponsorship from the Institute of Internal Auditors Philadelphia Chapter, BAP and Institute of Management Accountants Temple Chapter (IMA-T) hosted a executive internal audit panel with Lisa Bonnell of Comcast, John Mulcahy of FMC and Dan Tucci of Wells Fargo. The Fox Accounting Association (FAA) hosts a Women in Business panel on November 6 with Susan Manning, CEO of Docuxcel; Linda Guendelsberger, Partner at LG Legacy Group; Jamie Krug, Partner at Centri Business Consulting; and Karen Proietti, Head of Corporate Accounting Policy at Vanguard.
Members of the National Association of Black Accountants attended the Eastern Region Student Conference in Norfolk, Virginia in October. IMA-T members attended the IMA Student Leadership Conference in St. Louis, Missouri in early November.
The Department of Accounting has added six more members to the Accounting Circle Executive Committee, a group of business leaders who provide inspiration, leadership and support to the Department of Accounting at the Fox School of Business: Kim Bordner, Executive Vice President and Executive Audit Director, Wells Fargo Audit Services; Anthony Diianni, CPA, Partner, BDO; Julius Green, CPA, JD, Partner, Baker Tilly; Karen Proietti, CPA, Head of Corporate Accounting Policy, Vanguard; Anthony Stranix, CPA, Partner, Mazars; and Gregory Wright, CPA, Vice President, Financial Reporting, Comcast Corporation.
Greetings from Alter Hall! Enclosed is Spring 2018, issue #18 of our semi-annual Footnotes from Fox. Once again, we deliver news about department doings. What have the students, faculty, and our alumni been up to?
It was great to see so many of you at our Second Accounting Achievement Awards event at the Bellevue Hotel on May 2. Over 250 people attended. For those who could not make it, our first story informs about the event and the 2018 Award winners.
Our next two stories are about VITA, the IRS-sponsored tax assistance program we run at the Ambler campus. Under the guidance of Professor Steve Balsam and assisted by a few of our faculty and tax professionals who volunteer, our students prepared nearly 500 tax returns, and garnered almost one-half million dollars for their clients. This was the 11th consecutive year the Department has sponsored this program. But even more persistent, our faculty have been achieving and realizing professional successes outside the classroom for decades. We tell you what’s been done of late.
Justin Grothmann, a future Fox Master of Accountancy (MAcc) student, was the first Temple student to graduate under the Fly in 4 program. We’re proud he’s one of ours, and tell you more about him. Speaking of MAcc, this year we’ll graduate the largest ever cohort from our seventh class. Where are they off to?
Blockchain is a word that’s been on the tips of many tongues of late. Professor Cory Ng shares his views on blockchain technology and its implications for the accounting profession.
Finally, 2018 marks the 100th Anniversary of the Department of Accounting, as well as the Fox School of Business. In August, we’ll hold a research conference to celebrate. We also report on the Conference on Financial Economics and Accounting we ran (jointly with the Department of Finance) in November 2017. Over 165 academics from across North America came for two days of research presentations.
As I write this in late spring, the only entrance into Alter Hall is via Liacouras Walk. The 13th Street entrance to Speakman Hall is closed, pending the recladding of Speakman’s exterior, and the Liacouras Walk entrance to Speakman is shut. Construction of a sky bridge connecting the refurbished 1801 Liacouras Walk building to Speakman Hall is in full fury. Click here to learn more. Better yet, make a trip to campus to visit us and see for yourself.
As is ever the case, you get full disclosure when you read Footnotes from Fox.
The Department of Accounting is celebrating 100 years of academic excellence and fiercely forward thinking with a conference on research this summer—the Temple University 100th Anniversary Accounting Conference, taking place Aug. 9–10, 2018 at the Fox School.
The Department of Accounting shares with the Fox School, in celebrating its 100th anniversary in 2018. The department was founded the same year in which the Fox School was established as Temple University’s business school in 1918.
To commemorate the occasion, the Fox School Department of Accounting aims to bring together scholars interested in all aspects of accounting and welcomes research on all research topics. The event will take place immediately following the American Accounting Association’s annual meeting in Washington, D.C, on Temple’s Main Campus.
Keynote speakers for this conference include Professor Ray Ball, Sidney Davidson Distinguished Service Professor of Accounting at The University of Chicago Booth School of Business, and Professor Gregory Waymire, Asa Griggs Candler Professor of Accounting at the Goizueta Business School, Emory University, and professor at the Argyros School of Business and Economics, Chapman University.
Registration is available for those interested in attending. Learn more and register online.
The August 2018 conference follows another major conference held in November 2017 by the Department of Accounting hosted jointly with the Fox School Department of Finance—the 28th Annual Conference on Financial Economics and Accounting (CFEA). The annual CFEA conference is hosted by members of a consortium of eight universities: Georgia State University, Indiana University, New York University, Rutgers University, Temple University, Tulane University, the University of Maryland, and the University of Toronto. It is a highly selective and refereed conference of research papers in financial economics and accounting. The conference aims to bring together financial economists and accounting scholars to share their research relevant to theory and practice of business.
Approximately 160 people gathered at Temple University’s Fox School of Business for the 2017 program, featuring two distinguished keynote speakers: Luigi Zingales, Robert C. McCormack Distinguished Service Professor of Entrepreneurship and Finance and Charles M. Harper Faculty Fellow at the University of Chicago, and John Core, Nanyang Technological University Professor and Professor of Accounting at the MIT Sloan School of Management. More than 330 papers were submitted; only 14 percent were accepted. Over the course of the two-day conference, speakers discussed 46 papers on significant topics within the two subjects, including pertinent topics such as blockchain and bitcoin.
The luncheon keynote speaker was Professor John Core, Nanyang Technological University Professor and Professor of Accounting at the MIT Sloan School of Management. His address, titled “Expected Profitability and Expected Returns,” examined how new asset-pricing models that revive a role for accounting numbers in predicting future stock returns will likely shape future research in several areas of corporate finance and financial accounting. He highlighted inconsistencies in profit measurement between two competing models and also explored the implications for research on cost of capital and performance evaluation.
The Fox School’s Master of Accountancy (MAcc) program is set to graduate the largest cohort in its seven-year existence this fall—an impressive group of 48 students. The program has grown significantly since its launch in 2011 with a cohort of 22 students, and has maintained a track record of successful career outcomes, with the majority of this year’s cohort accepting offers at 15 national, regional, and Big Four firms.
Over the course of three semesters, students in the Fox MAcc program become both CPA- and career-ready with a curriculum that include time to prepare for and sit for all four parts of the CPA Exam, as well as top-tier job placement resources and opportunities with major firms. In addition to earning the 30 credit hours that count toward CPA licensure requirements, students receive invaluable networking and professional opportunities that includes guest speakers from industry and a trip to the U.S. Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) in Washington, D.C.
“The Fox MAcc program is committed to equipping students with the skills and experiences necessary to be competitive in the job market,” says Sheri Risler, CPA, director of the Fox MAcc program and professor of accounting practice. “Our program provides strong academics and experiential learning, making students strong candidates for employment with leading firms in the Greater Philadelphia region and beyond. We are proud of our largest graduating cohort yet and look forward to watching them make their mark on the business world.”
To support this next generation of accounting professionals, the Fox MAcc program awarded $213,000 in need- and merit-based scholarships to the 2017–2018 cohort. The financial support comes from generous donations from firms and benefactors, as well as funds generated from the Accounting Achievement Awards. Thanks to continued generosity from supporters, the next MAcc cohort will benefit from the largest amount of financial aid yet; 38 students will receive $336,000 in scholarship support. Since its launch, the Fox MAcc program has awarded more than $1.2 million in scholarships to 178 students.
This year’s graduating class is also noteworthy in that two of the members—Sue Ellen Douglas and Shanice Scott-Thurston—became the first Fox MAcc students to earn acceptance into the EY Scholars Program. Sponsored by Ernst & Young LLP’s Assurance and Tax practices, the program provides a select group of academically talented, underrepresented minorities with up to 100% tuition assistance associated with a Master of Accounting program. To qualify, students must accept a 2018 Assurance or Tax internship with EY and must receive a full-time offer after completing their internship. Douglas and Scott-Thurston join the firm’s Assurance practice this fall.
Two members of the fall 2018 MAcc cohort have also earned acceptance into this prestigious program—Alba Donastrong and Monique Mohammed. “It is truly an amazing feeling to know that EY selected me as an EY Scholar candidate for the 2018-2019 academic year. Receiving the news before my internship with the firm has boosted my self-confidence and commitment to my future goals,” says Monique. “This scholarship opportunity will allow me the time necessary to dig deeper and ask more exploratory questions as I learn and grow in the Fox MAcc program. My five-year plan includes becoming a CPA and working as an auditor for a public accounting firm, so the Fox MAcc program is, by far, the most logical step toward that goal. EY understands that knowledge is a powerful tool and the firm is willing to invest in those who are ready for the challenge.”
Congratulations to the MAcc Class of 2017–2018 and good luck in your future careers!
Fahim Abdullah – Kreischer Miller – Audit
Christina Allegra – EY – Tax
Ashton Andrews – PwC (Boston) – Audit
Neil Arthur – PwC – Tax
Adam Augugliaro – Baker Tilly – Audit
Tyler Benton – EY – Audit
Nicholas Bolton – RSM – Audit
Zachary Brenner – PwC – Audit
Valerie Brooks – Grant Thornton – Tax
Christopher Brown – Deloitte – Tax
Melissa Cameron – Deloitte – Audit
Gerald Degnan – Mazars – Audit
Colleen Diehl – PwC – Audit
Sue-Ellen Douglas – EY – Audit
Kelly Ebner – RSM – Audit
Forrell Grant – Baker Tilly – Audit
Benjamin Herring – SD Associates – Tax
Francesca Hommel – KPMG – State and Local Tax
Galina Ivaniv – Kreischer Miller – Audit
Jeane Kim – Kreischer Miller – Tax
Brian Lunney – Deloitte – Audit
Angela (Yinzhile) Luo – EY – Advisory
Amer Mahmud – PwC – Tax
Labrea Maldonado – EY – Audit
Dylan McCreavy – Kreischer Miller – Tax
Courtney Miller – BDO – Tax
Ryan Moore – Grant Thornton – Audit
Kuntal Patel – Grant Thornton (New York) – Audit
Vick Patel – Mazars – Tax
Theresa Patti – Deloitte – Audit
Jennifer Phim – Grant Thornton – Tax
Matthew Redican – RSM – Audit
Nicole Rivera – EY – Audit
Joseph Rucker – PwC – Tax
Alyssa Schaard – PwC – Audit
Shanice Scott-Thurston – EY – Audit
Brandon Shillady – RKL – Tax
Matthew Sternberg – EisnerAmper – Audit
James Tomak – Protiviti – Audit
Lauren Turzanski – KPMG – Tax
Jordan Weber – RSM – Audit
Kathryn Wiggins – PwC – Tax
Jonathan (Yonathan) Yirko – EY – Audit
Reprinted with permission from the Pennsylvania CPA Journal, a publication of the Pennsylvania Institute of Certified Public Accountants.
CPAs must be aware of emerging technologies that have the potential to disrupt their profession. Blockchain technology is one of them. Blockchain streamlines trans-action accounting and enables real-time reporting and real-time audit. We are still at the early days of the technology, but considering the potential impact on the profession, CPAs need to understand what this new technology will bring.
Blockchain technology has been in the headlines of several publications and a hot topic at conferences. Many see in it a platform that has the potential to disrupt a vast array of industries. Still, there is tremendous confusion about the technology and how it is supposed to replace existing technologies. Generally, blockchain consists of a distributed ledger system that operates on a consensus basis, empowering peer-to-peer networks with a more secure and efficient way to transact, record, and analyze transactions in real time. This feature focuses on the status of the technology and its potential implications for our profession.
What Is Blockchain?
First known as the distributed ledger system behind the bitcoin digital currency, blockchain technology has evolved rapidly with the proliferation of competing products (Ethereum, Ripple, Digital Asset, among others). It is now considered much more than a digital currency infrastructure. According to technology research firm Gartner, there are more than 70 blockchain platforms on the market and at various stages of maturity.1
Blockchain is a type of highly secure, distributed ledger system accessible via a public or private network, where each server on the network has a copy of the system. Data is replicated among all servers on the network in real time and is encrypted. Each time data is recorded (from an authorized user, device, or machine connected to the system), it is validated by a consensus mechanism, time stamped, and recorded on a block – sort of a file of data, like a ledger page. To ensure that data is not tampered with, each block is “attached” or linked to the previous block by a cryptographic algorithm called a hash. Blockchain draws its name from this concept of chronological series of “hashed” blocks of safeguarded data that form a chain. The system is highly secure. To alter the data, hackers would face a much higher level of complexity due to the consensus and hashing algorithms, but also because a hack would have to attack all the servers at the same time.2
Here are some of the benefits of blockchain:
- Authentication of transactions or exchanges of information
- Peer-to-peer transactions or exchanges of information without an intermediary or clearinghouse
- Automated and highly secure record keeping
- Smart contracts: automated contract execution and processing when conditions are met, based on algorithms
- Real-time audit capabilities
- Registry and tracking of the ownership of assets
Conflicting Views on Blockchain
Blockchain tends to generate two conflicting views: enthusiasm and skepticism. As is often the case, there is likely some truth in both positions. Large-scale adoption of the technology might be a matter of how quickly the concerns raised by skeptics will be addressed by the promoters.
Blockchain enthusiasts believe that the technology will become the infrastructure of choice for managing exchanges of value moving forward, just as the Internet provided the infrastructure for managing exchanges of information.3 They say it will profoundly change the way transactions are processed, recorded, and analyzed. They believe that blockchain technology is moving fast (faster than we might imagine), and the time to learn and experiment with the technology is now.
For the skeptics, the technology seems too good to be true, and that currently it is not trusted by users or regulators. They caution that it is not mature, not scalable enough, and lacks standards. They add that there is significant risk if credentials are compromised or stolen, and there are concerns it might be vulnerable to programming errors or system weaknesses (such as the vulnerabilities behind the scandal of the popular bitcoin exchange, Mt. Gox, in 2014).4 They argue that there are insufficient controls in place to ensure that the system is functioning as intended.
The technology seems to be advancing quickly to address the concerns, and some new consortia have emerged (including Hyperledger, R3, Hashed Health) to accelerate the definition of industry standards and foster collaboration. New approaches to security and privacy controls for the technology also are starting to emerge.5
How Real Is It?
Business and technology leaders across multiple sectors of the economy are envisioning potential applications of the technology in many areas. Financial services firms have started to deploy the technology, mainly in experimental projects. The small steps are testing the technology in selected areas, such as identity management, cross-border payments, and currency exchange transactions. The number of use cases has increased significantly over the past two years, not only in the financial services sector, but also in utilities, manufacturing, supply chain, health care, telecommunications, and government. Use cases (“proof of concept” projects) range from global trade and payments to secure document and records management (such as voting records, mortgage loan records and documents, medical records, intellectual property, and so on) or digital asset management (including stocks, bonds, derivatives).
In a recent report, Gartner says blockchain is at an early stage of its development, with highly fragmented solutions and a lack of industry consensus on the functional and technical scope of the technology.6 Gartner has identified what it thinks will be characteristic of blockchain platforms:
- A distributed ledger that serves as an authoritative record of significant events (which can include monetary transactions, but not solely limited to that use case)
- A (theoretically) immutable, tamper-proof, uncensorable record
- Cryptographic algorithms and consensus protocols ensuring data consistency
- An ability to record additional state information beyond recording transaction data
- Programmability, from simple scripts to more powerful programs such as “smart contracts” that can generate transactions
- Trust in a third party or centralized entity for certain functions, such as identity management or access control to a closed, private network
Blockchain aims to provide a digital infrastructure that will enable users to create and exchange value (not just money) across global peer-to-peer networks. The full disruptive potential of blockchain will come from its combination with other technologies, such as mobile computing, the Internet of things, data analytics, artificial intelligence, and machine learning. Blockchain will likely be part of the infrastructure that will empower these technologies as they come together in the new digital economy. This means that interoperability and standards will play a critical role for the technology to achieve its potential.
Potential Implications for CPAs
Double-entry accounting has been the basis for financial reporting for businesses throughout the world since the middle ages. However, in order to trust accounting records, costly reconciliations, confirmations, verifications, and audit procedures must be performed by the firm and its counterparties, as well as by auditors. Blockchain facilitates the innovation of a triple-entry accounting system; a system whereby all transactions are cryptographically sealed by a third entry and reside in a shared ledger. The third entry serves as a digitally signed receipt for the parties involved in the transaction, which can be verified without the need for a central certifying authority or a clearinghouse.
The implications of blockchain are potentially transformative, affecting CPAs in accounting, audit, tax, and advisory services. Big Four and large professional services firms already recognize the importance of blockchain. Deloitte, for example, recently announced a blockchain team of 800 professionals in 20 countries to develop applications in banking, cross-border payments, trade, and finance.7 PwC notes that blockchain may “structurally alter shared practices between customers, competitors, and suppliers.”8 For example, blockchain can improve the accuracy and efficiency of the billing and payment process, potentially minimizing disputes that arise from errors or missing invoices. Rather than sending a traditional invoice to a customer, Firm A shares invoices directly with the accounts payable department of Firm B, in real time, on a multiparty digital ledger.9 With the use of smart contract technology, Firm B could automatically pay the invoice after the computer confirms receipt of goods and checks for sufficient funds in the bank account.
Blockchain may extend far beyond accounts receivables and payables. In a recent article,10 Jun Dai and Miklos A. Vasarhelyi discuss how blockchain, coupled with smart-contract technology, could be used to automatically initiate performance-based compensation to managers based on predefined criteria. They also discuss how blockchain could be used to automate revenue recognition based on algorithms and data from shipping activities recorded in the blockchain ledger system.
Blockchain transactions are time-stamped and immutable, so auditors would benefit from traceable trails and the automatic authentication of transactions. Deloitte notes that the standardization created by blockchain could allow auditors to verify vast numbers of transactions underlying the financial statements automatically.11 For example, if complete data on inventory activity is recorded in a blockchain ledger system, auditors could determine the inventory balance remotely and in real time. As a result, the audit would evolve significantly, allowing auditors to spend more time on value-added insights, such as predictive analytics, internal control improvements, and other areas requiring human judgment and complex problem-solving.
Blockchain-based automated audits would also allow financial statement users to access information more quickly, more efficiently, and at the appropriate level of detail. Company management and auditors, for instance, may need full access to the data in the distributed ledger system, while investors may only need access to high-level financial summary information and key financial metrics such as revenue growth, profitability, and earnings per share.
Channing Flynn, a global technology leader at EY, speculates on the disruptive implications for corporate taxpayers, tax authorities, and tax practitioners – assuming the hurdles to widespread adoption are overcome.12 For example, transactions recorded in a real-time blockchain system would facilitate automatic tax reporting, and government tax authorities could streamline or accelerate certain tax computations and payments. As a result, Flynn can see certain tasks of tax advisers shifting from tax compliance administration to tax-knowledgeable blockchain systems expertise.
CPAs practicing in advisory services also would be affected. In the same way that CPAs have been assisting clients with accounting system implementations and system control audits, CPAs are likely to be involved in or solicited for advice on blockchain systems adoption, implementation, and integration. There will be growing demand for cybersecurity and tech-based audit expertise around blockchain, as well as blockchain system implementation. CPAs are well positioned to play a role in these areas.
What You Should Do
CPAs in practice and industry should become knowledgeable about blockchain technology and how it might affect their firm or business, as well as the CPA profession in general. Significant developments are expected in the near feature, and it is critical that CPAs keep up to date and prepare for potential disruptions. This includes incorporating blockchain in your strategic planning process and engaging in conversations with your technology vendors and partners about their own plans regarding the technology. Blockchain is in the early stages of implementation, but some professional services firms are already leading the way in collaborating with the tech industry to realize its benefits. EY, for example, recently announced the launch of EY Ops Chain, a set of applications and services to help firms leverage blockchain technology to enhance operations and drive growth.13 KPMG LLP and Microsoft announced a partnership to create a series of innovation workspaces and other initiatives dedicated to developing use cases and applications of blockchain technology.14
For CPAs looking for opportunities to learn more about blockchain, the PICPA plans to enhance its course offerings. Also, several other organizations offer training programs and online resources, such as O’Reilly Media’s Safari (CPAs who hold a CITP credential and members of the AICPA Information Management and Technology Assurance section have unlimited access to this learning platform), Lynda.com, Edureka, Udemy, or Microsoft Virtual Academy. For example, Edureka offers an online certification training program for a fee. These instructor-led classes provide case studies and access to a platform that uses programming language to setup a private blockchain environment. Microsoft Virtual Academy, on the other hand, provides free online courses on a variety of topics, including distributed ledgers, smart contracts, and decentralized applications.
Blockchain may be in its infancy, but CPAs should become knowledgeable about it and its disruptive potential for the profession. The automation, high degree of security, and instant verification features of blockchain technology are expected to transform the way transactions are executed, recorded, authenticated, disseminated, and analyzed. Should the full potential of blockchain be realized, CPAs will likely need to transition from compliance and verification activities to providing value-added services that require more human judgment, analysis, and critical thinking.
1 Gartner Research Note, “Top 10 Strategic Technology Trends for 2017: Blockchain and Distributed Ledgers,” March 21, 2017.
2 For more on blockchain and how it works, check out the EY video at www.ey.com/gl/en/services/assurance/ey-reporting-blockchain-and-the-future-of-audit or read “Building Blocks: How Financial Services Can Create Trust in Blockchain,” PwC, May 2017. www.pwc.com/us/en/financial-services/publications/financial-services-blockchain-trust.html
3 Don Tapscott and Alex Tapscott, “How Blockchain Will Change Organizations,” MIT Sloan Management Review, Winter 2017, Vol. 58., No. 2.
4 Robert McMillan, “The Inside Story of Mt. Gox, Bitcoin’s $460 Million Disaster,” Wired, March 3, 2014; P.H. Schumpeter, “Bitcoin’s Woes – Mt Gone,” The Economist, Feb. 25, 2014.
5 Robert E. Samuel, “A Layered Architectural Approach to Understanding Distributed Cryptographic Ledgers,” Issues in Information Systems, 17.4 (2016); A. Michael Smith, “Creating Assurance in Blockchain,” ISACA Journal, Vol. 2, 2017.
6 Gartner Research Note, “The Evolving Landscape of Blockchain Technology Platforms,” March 2, 2017.
7 “Deloitte Launches Blockchain Lab in New York, Increasing Focus on Key Technology in ‘Make-or-Break’ Year,” Deloitte press release, Jan. 12, 2017. www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/deloitte-launches-blockchain-lab-in-new-york.html
8 “PwC, 2016. “What’s Next for Blockchain in 2016?” Fintech Q&A, a publication of PwC’s Financial Services Institute, January 2016. www.pwc.com/us/en/financial-services/publications/viewpoints/assets/pwc-qa-whats-next-for-blockchain.pdf
9 Cesar Bacani, “Blockchain Will Revolutionise the Profession,” Accounting and Business, May 1, 2017. www.accaglobal.com/us/en/member/member/accounting-business/2017/05/in-focus/cb-may17.html
10Jun Dai and Miklos A. Vasarhelyi, “Towards Blockchain-Based Accounting and Assurance,” Journal of Information Systems, 2017 (In Press). https://doi.org/10.2308/isys-51804
11 “Blockchain Technology: A Game-Changer in Accounting?” Deloitte, March 2016. www2.deloitte.com/content/dam/Deloitte/de/Documents/Innovation/Blockchain_A%20game-changer%20in%20accounting.pdf
12 Channing Flynn, “Preparing for Digital Taxation in a Blockchain World,” International Tax, Bloomberg BNA. Nov. 28, 2016. www.bna.com/preparing-digital-taxation-n73014447764
13 “EY Infuses Blockchain into Enterprise and Across Industries with Launch of EY Ops Chain,” EY press release, April 26, 2017. www.ey.com/gl/en/newsroom/news-releases/news-ey-infuses-blockchain-into-enterprises-and-across-industries-with-launch-of-ey-ops-chain
14 “KPMG and Microsoft Announce New ‘Blockchain Nodes,’” KPMG press release, Feb. 15, 2017. https://home.kpmg.com/us/en/home/media/press-releases/2017/02/kpmg-and-microsoft-announce-new-blockchain-nodes.htm
L. “John” Alarcon, CPA, CGMA, CITP, is chief financial officer for LoanLogics Inc. in Feasterville-Trevose and is a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at firstname.lastname@example.org.
Cory Ng, CPA, DBA, CGMA, is an assistant professor of instruction in accounting at the Fox School of Business at Temple University in Philadelphia and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at email@example.com.