SSRN Id3193222

Robotic Process Automation in Public Accounting
Lauren A. Cooper
West Virginia University
lauren.cooper@mail.wvu.edu
D. Kip Holderness, Jr.

kip.holderness@mail.wvu.edu
Trevor L. Sorensen
trevor.sorensen@mail.wvu.edu
David A. Wood
Brigham Young University
davidwood@byu.edu
August 2018
We thank Ken Bills, Jeff Pickerd, Abigail Zhang, and workshop participants at North Carolina
State University, University of Hawaii Manoa and the 2018 AAA Annual Meeting for their
helpful suggestions and comments on the paper. We thank the firms for providing access to the
professionals to help perform this research.
Electronic copy available at: https://ssrn.com/abstract=3193222

Robotic Process Automation in Public Accounting
ABSTRACT:
This study investigates the adoption and use of Robotic Process Automation (RPA) software—
often referred to as bots—in the public accounting industry. Accounting firms use RPA software
to automate the input, processing, and output of data across computer applications in order to
streamline repetitive and mundane business processes. We conducted individual, semi-structured
interviews with 14 accounting professionals including at least two RPA leaders at each of the
Big 4 accounting firms to gain insights into how RPA software is currently being used.
Interviewees note that bots are implemented in all areas of the firm but have gained the most
traction in tax services, followed by advisory services and assurance services. Interviewees
report that bot implementation has increased quality and resulted in stunning increases in
efficiency—although bots are a nascent technology, firms report improved processing times by
70 to 80 percent and reductions of over one million human work hours in 2017. Although bots
are more efficient, respondents report that bot implementation is not reducing headcount, but it is
decreasing offshoring and increasing employees’ job satisfaction and upward career mobility. In
addition, respondents provide perspective on skills that will be needed to succeed in an
accounting profession that melds RPA and human judgments. This study is the first to identify
and discuss the potential benefits, opportunities, and challenges to implementing RPA in the
accounting profession and serves as a catalyst to spur future research in this area.
Keywords: robotic process automation (RPA), automation, accounting efficiency, accounting

effectiveness, hiring decisions, offshoring

INTRODUCTION
The purpose of this study is to investigate the adoption and use of Robotic Process
Automation (RPA), sometimes referred to as “bots,” within the accounting profession.1 RPA is
the use of software programs to automate repetitive, routine business processes. The use of RPA
in business has increased dramatically in recent years (Accenture 2016). A report from
Information Services Group, a technology research and advisory firm, estimates that 72 percent
of companies will use RPA by 2019 (ISG 2017). Deloitte (2015) conducted a survey and found
that its clients view the implementation of RPA as a priority within their firms. In particular,
process automation was rated as the number one technology-related priority for shared services
and global business services leaders over the next 12 months and increasing the level of
automation was rated as the second-highest strategy-related priority today as well as over the
next ten years. Given the significant interest in and use of RPA, we study how RPA is affecting
the accounting profession.
RPA is a relatively new technology that accounting firms use to perform internal business
processes as well as tax and assurance work for clients. In addition, accounting firms are creating
service lines around the implementation of this technology in clients’ own operations. Because
RPA is a new technology, there is still much that accounting firms do not understand about how
using RPA will influence the profession moving forward. This presents an important and
significant opportunity for academic researchers to help shed additional light on the costs and
benefits of RPA in accounting settings. There are many argued benefits of RPA, including
drastically decreasing processing time and improving accuracy, especially for repetitive, rule-
based, mundane tasks (Deloitte 2016). These benefits do not come without potential costs. Some
1
As noted above, RPA is sometimes referred to as bots. Accordingly, we use the terms “RPAs” and “bots”
interchangeably throughout this study.

argue that automation will cause significant job loss, unemployment, and ultimately more drastic
income disparity and resultant societal problems (McKinsey Global Institute 2017; Walker 2017;
UBS 2016). Although there are many agued benefits and costs of RPA, there is very little
research on the topic, as most of the current research relates to case studies and discussion papers
(e.g., see Lacity, Willcocks, and Craig 2015; Asatiani and Penttinen 2016; Aguirre and
Rodriguez 2017; and van der Aalst, Bichler, and Heinzl 2018). Thus, gaining an understanding
of how accounting firms are currently using RPA and the initial effects of RPA are first steps to
helping the profession deal with the likely significant change that will result from RPA.
To provide context for the rest of the paper, we provide an example of RPA in an
accounting setting. Deloitte (2015) describes the functions of a bot that was created to perform
the work-in-process (WIP) analysis within an advisory client’s operations. In particular, a bot
constantly monitors a shared mailbox and checks that the enterprise resource planning (ERP)
system is up to date.2 When the bot receives a WIP analysis request via email, it logs into the
ERP system and runs an ERP report on WIP. It then cuts and pastes the data into a spreadsheet
template file and runs a macro to create pivot tables and finalize the WIP analysis. The system
then automatically emails this finalized WIP analysis to the party that requested it. Thus, all of
these steps, which were previously performed by an accountant within the client’s organization,
are now performed entirely by an automated system in a fraction of the time it took a human
accountant.3
2
ERP is a type of software or a set of integrated applications that companies use to collect, store, manage, and
interpret data from business activities (Deloitte 2015).
3
Deloitte (2015) reported that it took approximately four weeks to implement and test the automation of the WIP
analysis as well as present a working demonstration to the client. Prior to implementation, 10 employees performed
an average of 2,000 WIP analysis cases per month, spending approximately 10 to 15 minutes on each case.
However, Deloitte reports that the bot completes each case in four minutes, on average.

We interviewed leaders of the Big 4 accounting firms to gain a deeper understanding of
why and how RPA is designed and implemented within the large accounting firms and the
potential implications that RPA can have on the accounting profession. Specifically, we report
the findings from interviews of 14 employees of Big 4 firms. Eleven of the respondents are
national or international leaders in the RPA areas of their firm (including two who oversee all of
RPA at their respective accounting firm), while the remaining three interviewees spend
significant time on analyzing and implementing RPA within the firm. We conducted semi-
structured interviews to ascertain how the firms are currently using RPA, who within the firms is
working with RPA, and how RPA may be used in the future. In addition, we examine how RPA
influences human-resource decisions such as hiring, training, and offshoring decisions.
The results provide an important base upon which to build future research and also yield
several interesting findings, which we highlight. First, participants report that all areas within the
large accounting firms are adopting RPA, with tax services being the furthest along in adoption,
followed by advisory services and then assurance services. They also note that RPA has not yet
had a major impact on fees as the firms are still in the initial stages of using RPA and are
grappling with the appropriate method for allocating costs and benefits which can affect multiple
clients and are not driven directly by employee hours. Firms are concerned that the use of RPA
could cause a “race to the bottom” for fees and are studying this issue carefully.
Second, our interviewees suggest that firms are adopting RPA in order to increase both
efficiency and effectiveness. Firms report that efficiency gains are dramatic: one firm shared that
in 2017 they saved over one million human work hours from RPA, another respondent indicated
processing time improvements of 70 to 80 percent have been achieved, and a third respondent
indicated turning a “two man-day” task into a 17-second task. Firms also report seeing increased

quality as bot accuracy approaches 99.9 percent, compared to human performance that is often
closer to 90 percent. Respondents indicated that RPA is reducing the need for offshoring and that
keeping tasks “onshore” has resulted in closer monitoring and improved quality.
Third, although respondents indicate dramatic increases in efficiency, they report that
their firms are not presently reducing head count or hiring. Currently, the firms have enough
work that they can redeploy displaced individuals into other productive tasks. While some
respondents believe RPA may reduce the growth in hiring in the future, all respondents are
bullish that RPA will result in similar demand for workers—but that the nature of the work will
change from doing mundane, repetitive tasks to more value-adding and interesting work. Despite
these interview responses, we believe it is an open question whether automation, and RPA in
particular, will reduce hiring in the accounting profession—especially in the long run, as the
firms are just beginning to implement this technology.
Fourth, in contrast to what some predict about automation having a negative impact on
employee morale and job security, respondents believe that RPA is having a positive impact on
employees. Specifically, interviewees report that RPA is increasing employee job satisfaction,
improving work-life balance, decreasing employee turnover, and causing more employees to
view working for the Big 4 as a career rather than a stepping-stone into other careers. The
respondents attribute these positive outcomes to employees not having to spend as much time on
monotonous work and being able to work on more interesting projects earlier in their career.
Respondents also believe RPA will result in employees climbing the promotion ladder more
quickly as they improve critical skills at a faster rate than when they were performing less
demanding work.

Fifth, respondents are somewhat mixed on their perceptions of how RPA will change the
demand for skill sets of future employees. While all respondents agreed that some exposure to
computer coding is more valuable with RPAs, they indicated that most RPAs are designed so
that relatively minimal programming skills are necessary and that for very complicated RPA
implementations, teams would work with computer programmers or software engineers. Still, the
respondents believed that exposure to programming would be positive and encouraged it. As for
future skills, interviewees suggested that critical thinking skills (with a focus on creative
thinking) would be useful as new technologies allow accountants to better address client issues.
Interviewees also believe communication skills will be more important moving forward because
of the need to explain to and sell clients on the use of RPAs for work performed by accounting
firms on client projects as well as for the implementation of bots within clients’ own operations.
Finally, regarding the future of RPA within accounting, the interviewees believe that
RPA is a stepping-stone to more sophisticated automation. Specifically, they report that RPA
vendors are already starting to add more artificial intelligence (i.e., machine learning and
cognitive computing) to traditional rules-based bots. They believe in the future that RPAs will
continue to “become smarter” and capable of doing more sophisticated tasks that require human
judgments whereas the majority of RPA work today is rules-based and requires little to no
judgment.
This study makes an important contribution in examining how RPA is unfolding in an
entire industry, whereas most prior research is limited to individual companies. This initial
research study looking at RPA within accounting should help spur future research in this area.
Indeed, RPAs are an important, and likely to become more important, technology employed by
public accounting firms. Yet, there is little to no extant research on RPA, and our interviews

suggest firms are very open to research that helps them understand the costs and benefits of and
how to use RPA technology. This paper helps academic researchers understand the current use of
RPA within accounting and identifies important issues that need additional research.
VALUE OF DESCRIPTIVE RESEARCH
Grimaldi and Engel (2007) capture the opinion of many scientists about descriptive
research with the following statement: “‘Descriptive’ in science is a pejorative, almost always
preceded by ‘merely,’ and typically applied to the array of classical -ologies and -omies:
anatomy, archaeology, astronomy, embryology, morphology, paleontology, taxonomy, botany,
cartography, stratigraphy, and the various disciplines of zoology, to name a few. But there is
chronic misunderstanding as to what descriptive science actually is, and thus there is ignorance
of its significance. This in turn imperils these disciplines and even the existence of fundamental
knowledge in academia, as recent history teaches us” (pg. 646). The authors go on to point out
that this negative attitude towards descriptive science exists even though major scientific
breakthroughs by Charles Darwin, Dimitri Mendeleev, and Isaac Newton, to name a few, came
from descriptive scientific exploration (Grimaldi and Engel 2007; Casadevall and Fang 2008).
A similar view of descriptive research exists in the accounting community, even though
there have been several examples of important descriptive research.4 For example, Graham,
Harvey, and Rajgopal (2005) conducted a descriptive analysis of earnings and disclosure
decisions that has more than 5,000 cites on Google Scholar and was awarded the 2006 Notable
Contribution to Accounting Literature Award and the 2006 Financial and Reporting Section
4
We make this observation based on personal experiences and discussion with other authors. This is somewhat
corroborated by survey evidence of nearly 1,000 accounting scholars who believe more strongly than scholars in the
disciplines of economics, finance, management, marketing, psychology, and the natural sciences that “the review
process at top [accounting] journals is significantly biased against certain topics or methodologies” (Wood 2016, pg.
352).

(FARS) best paper award. Similarly, the descriptive research underlying the rankings of the
BYU Accounting Ranking website and benchmarking data were poorly received in the review
process but subsequently were voted by AAA membership to receive six different best paper
awards (Holderness, Myers, Summers, and Wood 2014; Glover, Prawitt, Summers, and Wood
2012; Pickerd, Stephens, Summers, and Wood 2011; Stephens, Summers, Williams, and Wood
2011; Coyne, Summers, Williams, and Wood 2010; Glover, Prawitt, and Wood 2006). Yet,
despite these successes in publishing descriptive research, authors, reviewers, and editors often
struggle to accept descriptive research as a legitimate methodology—often requiring authors to
recast what is more accurately described as a descriptive paper into a qualitative or quantitative
paper that tests or produces theory because the former is not viewed as valuable (Sandelowski
2000).5
At its most basic level “descriptive studies may be characterized as simply the attempt to
determine, describe or identify what is, while analytical research attempts to establish why it is
that way or how it came to be” (Ethridge 2004, pg 24). So when is descriptive research valuable?
“Three main purposes of research are to describe, explain, and validate findings. Description
emerges following creative exploration, and serves to organize the findings in order to [later] fit
them with explanations, and then test or validate those explanations (Krathwohl 1993). Many
research studies call for the description of natural or man-made phenomena such as their form,
structure, activity, change over time, relation to other phenomena, and so on. The description
often illuminates knowledge that we might not otherwise notice or even encounter” (AECT
5
As explained by Sandelowski (2000), “The view of description in quantitative research as the ‘crudest form of
inquiry’ (Thorne, Kirkham, & MacDonald-Emes, 1997, p. 170) likely has negatively influenced researchers
engaging in qualitative research, many of whom have felt obliged to defend their efforts as something more than
mere description. That is, they have sought ‘epistemological credibility’ (p. 170) by designating their work as
phenomenology, grounded theory, ethnography, or narrative study…[rather than describe their work] as qualitative
descriptive studies” (pg 334-335). Personal communications with many accounting authors confirm that this also
occurs in our discipline.

2001). Describing a situation is especially valuable when the situation is new and little
understood generally by researchers. It is also valuable when gathering information would
disrupt subjects or when it is not possible to gather large samples of data (CIRT 2018).
We view using a descriptive methodology as appropriate in our setting because RPA is a
new technology in the accounting domain and is little understood by accounting academics.
Furthermore, at the time data was collected, the group of people involved in designing and
implementing this technology at the accounting firms is still relatively small, making collection
of a large sample of data infeasible. By providing a rich description of the RPA phenomenon, we
hope to spur greater academic research into this important emerging trend.
RESEARCH METHODOLOGY
Improving technological capabilities are enabling more and more industries to implement
robotic software systems to streamline business processes (Boulton 2017; Capgemeni Consulting
2016; Olhorst 2017). The purpose of our study is to identify how public accounting firms are
using RPA software and to provide insights into the benefits, opportunities, and challenges of
implementing RPA in the accounting workplace. We conducted semi-structured interviews with
at least two RPA leaders at each of the Big 4 accounting firms to better understand RPA in
public accounting. We selected this descriptive research approach because it allows us to obtain
in-depth responses from participants. In addition, this is the first research study that is not a case
study on RPA and there is currently no theory or empirical research that examines the
phenomenon in accounting or other disciplines. This paper serves to provide a foundation for
future empirical research.
We developed initial interview questions based on preliminary research into how RPA
generally operates in businesses regardless of the business function (e.g., accounting, finance,

etc.) as well as how public accounting firms currently report using RPA software. To develop
these questions, we had informal conversations with several people with experience using RPA
and reviewed marketing materials offered by the Big 4 accounting firms as well as other
technology companies (i.e., PWC 2017; Accenture 2016; EY 2016; Deloitte 2015). We revised
our initial interview questions based on discussions with a senior manager involved in RPA
implementation at a Big 4 accounting firm. The objective of our interviews was to encourage
participants to share any information they felt was relevant to our discussion based on their own
experiences with RPA in public accounting. Thus, the final version of our interview questions
was primarily used to provide prompts and follow-up questions in order to obtain information on
key categories of information.6
Interviews
We conducted 14 interviews with RPA leaders from the Big 4 accounting firms from
2017 to 2018. Personal contacts at the Big 4 firms put us in touch with at least one RPA leader at
each firm. Additional participants were introduced to us through the initial RPA leader. Overall
we had at least two RPA leaders from each of the Big 4 firms. Several of our participants were
the national leaders and two were even the global RPA leader for their firm. Seven of the
participants are partners, three are directors, and the remaining four are senior managers. Two of
the participants were female, and on average, the participants had approximately 17.9 years of
relevant work experience, ranging from 7 to 31 years of experience related to the public
accounting industry. Table 1 provides additional details for our interview participants.
INSERT TABLE 1
6
The interview questions are classified into six categories: (1) current use of RPA software, (2) RPA software
implementation, (3) efficiency and quality of work performed by RPA software, (4) human resource issues, (5)
client relations and other stakeholder issues, and (6) the future use of RPA software in public accounting.

The participants had extensive experience working with RPA software within the public
accounting realm. Eleven of the interviewees were national or international leaders in the areas
of automation and/or data analytics within their firm. The other three interviewees work on the
technical implementation of RPA projects, one of whom owned patented RPA technology used
by the accounting firms. All of the participants are actively involved with the implementation of
RPA software at their respective accounting firms—often crossing all areas within the firm—and
are qualified to speak to the benefits, opportunities, and challenges of using RPA within the
public accounting industry.7
Thirteen of the interviews were conducted over the phone and one was conducted in
person. In conducting the interviews, we followed the approach used in prior research (Hirst and
Koonce, 1996; Cohen, Krishnamoorthy, and Wright, 2002; Beasley, Carcello, Hermanson, and
Neal, 2009). One researcher acted as the primary interviewer and took notes while another
researcher (or researchers) made a separate set of handwritten notes and asked follow-up or
clarifying questions based on participants’ responses. We began each interview by discussing the
general purpose of our research and providing assurances that the identity of the participant and
the accounting firm would remain confidential. We then asked the participant to provide a basic
overview of his or her experience in the public accounting industry as well as with RPA
software. Subsequently, we asked our prepared interview questions in a non-leading manner to
allow the participant to describe their understanding of RPA and what they thought was most
7
We believe that our sample size of 14 is sufficient for two reasons. First, the interview responses from the first
RPA leader at each of the Big 4 firms were fairly consistent. In subsequent interviews we did not encounter
significant new insights, which indicates that we reached a point of saturation and that the number of interviews is
appropriate (Glaser and Strauss, 1967; Griffith, Hammersley, and Kadous, 2015; Commerford, Hermanson,
Houston, and Peters, 2016). Second, we focus on RPA in the Big 4 accounting firms, and there are few people who
would be considered an “RPA leader” in each of these firms. Given that RPA technology is new implemented in Big
4 accounting firms and we spoke to at least two national or international leaders in RPA at each firm, we believe that
the sample size is sufficient.
10

interesting (Dichev, Graham, Harvey, and Rajgopal, 2013). Overall, the interviews ranged in
length from 16 to 67 minutes, with an average duration of 34 minutes. The participants were
forthcoming with their responses and all of them were enthusiastic about the topic.
With all participants’ permission, each interview was digitally recorded and transcribed
using automated transcription software. After transcription, one of four research assistants and
one coauthor independently reviewed the transcripts to ensure accuracy. The only noted errors
were minor—relating to accounting or RPA terminology. After ensuring the accuracy of the
transcriptions, the author team conducted a detailed analysis of the transcripts to determine topics
discussed and the similarities and differences between the participants’ responses.
In conducting the interviews, we guaranteed participants’ anonymity. Several participants
asked that we redact any connection to their quotes, and thus we label the source of these quotes
as redacted.
DEFINING RPA AND THE DEMAND FOR RPA IN PUBLIC ACCOUNTING
What is RPA?
Technological advances are leading to the development of a spectrum of digital
workforce tools that companies can use to automate their business processes. At one end of the
digital workforce spectrum is basic automation, which uses technology to manipulate existing
software to complete a business process (Accenture 2016). At the other end of the spectrum is
artificial intelligence, which is software able to learn by analyzing data and then refining future
performance. RPA resides in the middle of this spectrum and consists of rules-based automation
software. Essentially, RPA ranges from a simple to a very complex computer program that is
able to automate the input, processing, and/or output of data across computer applications or
systems without altering a firm’s existing infrastructure. RPA software can be used to complete a
11

variety of tasks, including manipulating data, processing business transactions, generating
responses, and communicating with humans (e.g., via email) or other digital systems. The
following quotes further explain the capabilities of this technology.
Bots are software, which we're calling robotic process automation or RPA. It's delivered
through software bots that could be configured to perform rules-based tasks. ‘If-then’
statement type tasks… they're not actual production line robots, they're software robots.
They are computer-coded software that can perform repetitive rule-based tasks and the key
is that they can work across applications. They're very similar to macros but they can work
across many different applications and they're agnostic to the applications that they work
with. [P-1]
A bot is going to perform the same type of task every time it goes to do it and it could
identify exceptions and notify the human of those exceptions, but it will always perform
those certain tasks and follow those ‘if-then’ statements. So certain things bots can't do. It's
not artificial intelligence or voice recognition software. It can't work with unclearly defined
processes, handle unstructured data, or have conversations with humans… It can't adjust
on the fly or manage unpredictable processes, it can't adapt to frequent changes… It can't
make judgments… but again it could follow those ‘if-then’ statements… It won't resolve
exceptions but it'll identify to you of exceptions so that you, as the human, can then go
resolve those exceptions. I think they're very similar to the typical macros that you've seen
in the past. [P-1]
They can open emails and attachments, copy and paste items, move files and folders, log
into web or enterprise applications, scrape data from the web, connect to different systems
through API's, make calculations, extract structured data from documents, and again follow
‘if-then’ decision rule-based tasks. [P-1]
RPA would largely not exist if computer systems were designed perfectly or able to be
updated in a very fast manner. However, system implementation is very expensive and making
changes is difficult, time consuming, and usually only performed by specialists. RPA allows
users to more quickly interact with multiple different systems allowing users (and not only those
in the IT function) much greater ability to develop solutions.
Demand for RPA in Public Accounting
The consensus from our interview participants is that both factors within accounting
firms as well as client interest drive the demand to use RPA software. The initial use of RPA in
12

public accounting was focused on improving accounting firms’ internal operations. One
participant simply noted that, “We knew that we had internal processes that could use a lot of
automation help [P-2].” One Big 4 firm provided additional information regarding the
automation potential of general accounting processes. Table 2 presents the firm’s breakdown of
the automation and savings potential of different accounting functions. Based on the analysis,
between 10 and 30 percent of all general accounting processes, within the audit firm or a client
firm, have the potential to be automated. The areas of order to cash, human resources, and source
to pay are especially likely to yield cost savings. Considering the potential savings, it is easy to
see why accounting firms began experimenting with the automation of their internal functions.
Specific examples of how accounting firms are using bots to save both time and money on their
internal operations were discussed by our participants:
We spend hundreds of millions a year on travel costs in the firm. One fact about travel is
that the later you booked your tickets, the more expensive it gets. We put a bot in place that
monitors all conferences that our guys are doing in all our official client functions, and as
soon as we know there's something happening we get a bot to automatically send out a
request for travel booking for the people who are attending and force them to make the
booking immediately. That small set of bots has had a really significant impact on our
travel expenses just by reminding people to book in good time. [Redacted]
Internally we're seeing that we're using bots for compliance. Somebody might be out of
compliance with something. Normally a report gets run, somebody analyzes that report,
and that person drafts an email to the professional that might be out of compliance. With
bots we're cutting out the whole step of human interaction with the email. Having to write
the email, spending the time, figuring out… who’s out of compliance, and how far out of
compliance are they. Bots are helping to fill in the void there so that our partners are not
having to do that. [Redacted]
These examples highlight the reported benefits that are being realized from the
implementation of bots within public accounting firms’ internal operations. The use of RPA
internally by these firms has resulted in cost savings on internal processes and has allowed
employees to focus on activities that add more value to the firm.
13

INSERT TABLE 2
Once this initial internal implementation of RPA proved successful, accounting firms
transitioned to using the technology to improve the services provided to their clients. One
participant described the model used for deploying bots internally and subsequently
incorporating them in work performed for clients in the following way:
A classical success model in a business like ours is to take a new solution, experiment with
it internally, prove that it can be scalable internally, and once you have learned the solution
properly then let's roll it out to our clients. [P-7]
Participants report a variety of benefits from using bots to perform tasks on client
projects. One such benefit is that accounting firms are able to earn larger profits on fixed-fee
projects (and have more competitive bids on variable-fee projects), stemming from the fact that
bots are less expensive and can complete tasks in less time than employees.8 Accounting firms
also benefit from a quality perspective. The use of RPA software improves the accuracy of tasks
and allows employees to focus their time and effort on subjective tasks, which add more value to
projects (Accenture 2016). The benefits of using RPA software to complete tasks on client
projects are illustrated in the following quote:
From a firm perspective, where our work is say firm-fixed-price, we’re given a million
dollars to come in and do a specific function. What we do right [is]... understand where
within those contracts we are putting people. And those people that we’re deploying are
doing rules-based activities, the same things day-in-day-out, reconciliations, why don’t we
just deploy bots instead of people? So, for that million-dollar piece of work, maybe there
were ten people. Now we’re reevaluating that million-dollar piece of work and going, whoa
its six people and maybe three or four or five bots. And bots are very inexpensive. So from
a firm-fixed-price contract perspective, we can drive profit and at the end of the day, the
service levels are going to improve because the bots process much quicker, [at] greater
levels of accuracy. They’re much more dependable. They do it the same way every time
and they work weekends. [P-4]
8
Deloitte (2015) estimates that the cost of implementing a bot to complete a task is one-ninth of the cost of a full-
time employee in the UK.
14

As this quote indicates, accounting firms report implementing RPA on work performed
for clients in order to increase the quality of the services provided as well as their realized
profits.
Participants also discussed how clients, particularly in the areas of advisory and tax, are
expressing increasing interest in RPA software and how it can be used to benefit their
organizations. Accordingly, public accounting firms have created service lines around the
implementation of RPA software within clients’ own operations. We highlight the demand for
RPA by tax and advisory clients with the following quotes:
No one was interested I would say a little more than a year ago. Last July of [20]16, we
started hearing “Hey,” one or two saying, “What is this?” I remember last September
actually doing a presentation: “Hey here it is” and just within the last month they’re eager
to know, “Okay, how do I get this in my organization?” So, in tax I think it’s a phenomenon
that just took fire I would say in the last 12 months. [P-8]
Clients absolutely need them, and they demand them now. So, they demand not just smart
ways for consultants to come in and help them do their job, but they demand a mix of
products and services. [P-4]
There's demand inside the firm to automate some of our own processes because we saw
that people were spending loads and loads of time doing menial administrative type tasks
that could be automated. So we started doing that and then what we're seeing is that there's
this emergence of the fourth Industrial Revolution… The fourth Industrial Revolution is
essentially automation… We're seeing through the fourth Industrial Revolution a demand
by our clients for automation. [P-9]
Hence, the demand for RPA software in the public accounting industry can be attributed
to accounting firms’ desire to streamline their internal processes, increase their profits on work
performed for clients, and create service lines around the implementation of RPA software
within clients’ own operations as they increase their understanding of automation’s capabilities.
Implementation of RPA in Public Accounting
According to our interview participants, the Big 4 accounting firms have been using RPA
software within their professional service practices to varying degrees for approximately two to
15

four years. The firms purchase licenses for RPA enterprise platform software from third-party
vendors, such as Automation Anywhere, UIPath, Winautomation, and/or Blue Prism, rather than
develop RPA software internally. One participant explained the firm’s decision to purchase
third-party software as follows:
There are a lot of really good suites of software that exist…off the shelf to help us do a lot
of the things that we want to do. So a current view is, do we really spend a lot of time
internally absorbing the cost to build a lot of this…or, use existing software and just get
software licenses for everyone—and that would be more powerful, right? [P-6]
Employees within the accounting firms then use the RPA enterprise platform to build
(i.e., code) individual bots to automate various rules-based tasks for their internal operations as
well as for work performed for their clients. Depending on the complexity of the programming
involved, an individual bot can be implemented in a matter of days or weeks (PWC 2017;
Deloitte 2015).
Participants stated that accountants, particularly at the staff level, are encouraged to
identify possible RPA use cases, which consist of high-volume, manual tasks that do not require
judgment (Accenture 2016). However, approval for implementing the automation generally
comes from the manager or partner assigned to the project. The following participants further
detail the structure surrounding the identification and approval of automation within accounting
firms:
The mandate at [our firm] is if it can be a bot, make it a bot. So, I don’t think anyone is
precluded in our organization from deciding that something ought to be a bot. Now does
that decision have to flow up and get approval? Well certainly. I mean we don’t let staff
run our projects, right? The project manager has to agree, but the idea to use a bot, in a lot
of cases that will come from our staff because they’re the ones that’ll have to grunt through
that work if they don’t build a bot. [P-13]
We made an explicit decision about this. It was more important to engage and empower
the staff than it was making sure that we weren’t writing superfluous bots. And so it’s like
everything. There’s trade-offs and you just have a bias. That doesn’t mean there’s carte
16

blanche for a staff to write it, but certainly we were biased towards the staff doing what the
staff thinks is necessary. [P-8]
We are currently running a challenge… to identify these routine processes that can be
replaced by bots… We ran these challenges to determine the best places to use RPA’s. All
of that was part of a big push to simplify and automate as much as possible... Anything that
is routine we would like to replace with a bot. [Redacted]
To create bots, accountants at Big 4 firms have access to a variety of RPA training
methods, including in-person training within the accounting firm as well as on-site and web-
based training provided by RPA software vendors to help them understand how RPA software
operates and identify possible RPA use cases. One participant mentioned that the firm has
developed a phone application so that employees can complete RPA training on their own time,
while another participant discussed how the firm has created a template to help its staff
determine whether a possible use case is suitable for automation.
When it comes to actually programming the RPA software, participants stated that the
coding is performed by a combination of accountants and/or software programmers. Several
participants emphasized that the user-friendly nature of RPA software allows for accountants to
code bots on their own. One participant went as far as to say that “any accountant can learn how
to use these things”. [P-13] However, participants also stated that certain situations require bots
with complex and customized coding. In these cases, software programmers work with
accountants to implement the automation. The interaction between accountants and computer
programmers to code bots is illustrated in the following quote:
By and large most of the work that’s being done can absolutely be translated into a rule set,
and so it’s having practitioners that are able to work through that and the designing and
developing of a bot. It’s drag-and-drop software, which is why we don’t need the technical
person. What I will say is that you can have very basic bots…where a functional person
can design it fairly quickly. You can also have highly complex bots that require bolt-on
type solutions, so custom coding or programming. That’s where we start to stretch and we
bring that technical person into the bot design and development. And frankly the bridge
17

that’s built between the functional and the technical person there is around the need for that
custom programming. [P-4]
Participants at all of the Big 4 firms also discussed the importance of accountants
understanding the capabilities of RPA software. Although software engineers have the technical
background to write complex computer programs, they do not have the institutional accounting
knowledge needed to properly identify use cases for automation or an understanding of the
regulatory environment in which accountants operate. Additionally, an understanding of RPA
allows accountants to communicate better with clients regarding how RPA can provide them
with better services. In particular, one participant stated:
We wanted to teach a workforce how to identify the use cases, ROI [return on investment],
[and] even how to program. I would say probably 30 to 40 percent of our tax folks say
“Give me the license. I get this. I want to program.” But the other thing that we did was
create an army of people that now, when they’re talking to clients, they understand in detail
what’s possible. Whereas if you get the normal software engineer who doesn’t know tax
the translation is difficult to figure out where the waste is that you can automate. [P-8]
The consensus from participants is that Big 4 accounting firms’ RPA implementation
programs focus on training accountants at all levels, from interns to partners, to understand how
bots operate, identify use cases for automation, and program RPA software. This allows the
firms to more efficiently automate business processes as well as communicate the potential
benefits of RPA to their clients.
THE CURRENT USE OF RPA IN EACH PROFESSIONAL SERVICE PRACTICE
Interview responses indicate that the Big 4 accounting firms are currently utilizing RPA
software to automate business processes within each of their three services lines of their clients:
taxation, assurance, and advisory professional service. At the current time, two conditions must
be met before a business process will be automated (Accenture 2016). First, the process must
involve only structured, digital inputs. Second, the process must be entirely rules-based. Thus,
18

manual business activities that are non-subjective and high in volume are ideal candidates for
automation. In fact, the term “robotic” in Robotic Process Automation is meant to describe the
nature of the underlying business process being automated, rather than the technology itself
(Rainey, Brown, and Kirk 2017). For business processes that have unique scenarios, the bot must
be coded to alert the firm of situations where judgment must be utilized to complete the process.9
Participants also discussed additional factors that the Big 4 accounting firms take into
account when deciding whether to use RPA within a given service line, such as the risk
associated with the identified process. The following quotes relate to the costs and benefits that
are considered when determining whether to utilize a bot:
We have a number of different factors we put together for each of our bots. Time savings
and also the intangible benefits, we do look at those as well. Could this decrease risk?
Because a human going in or even our offshore people going in makes errors. So are these
areas that could really decrease risk with the bot performing those steps? [P-2]
[We have] developed a standardized way that we look at automation… It is a process

assessment, operating model assessment, and complexity analysis, so how complex is the
bot expected to be given the process that you're going to automate. All of that is done across
many different facets of business. [P-9]
If you have a task that you do weekly and it takes an hour it's probably not worth automating
it. You can automate it. It's absolutely possible to automate it, and it may be easy to
automate, but is it worth it? Probably not. Where I've seen in the last three years the big
impact on bots are these frequently large-scale processes… It takes dozens and dozens of
hours to collect information and it's very repetitive work… In those very large-scale
processes you get massive benefits. But what I do see a lot of companies doing is starting
by saying, ‘This process is painful. We hate doing it. Let’s automate it.’ It may just cost
you five hours a week, which is just not worth it. There is definitely some lack of clarity in
the industry about when should you automate and when it's just not worth it. [P-7]
As the prior quotes indicate, there is not always a clear set of guidelines to follow for
determining the processes that should be automated.
9
We note, and discuss subsequently, this is an area that is changing and companies are working to implement more
artificial intelligence within bots.
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With regards to work performed for client projects as well as the implementation of RPA
in client’s operations, interview participants responded that accounting firms design bots to
automate both common processes that can be applied to a variety of clients and unique tasks for
a specific client. Participants identified the possible return on investment (ROI) from
implementing a bot to complete a given process as one of the main considerations when
determining whether to develop a bot. Therefore, accounting firms regularly program bots for
tasks that can be applied to multiple clients because they provide a greater return. However,
sometimes the ROI for a bot is sufficient even if it is designed for one client. The use of bots to
complete common processes versus client-specific tasks is illustrated in the following quotes:
It’s a combination, but probably more of the former where you’re developing a robot that
can be a little bit diagnostic to what you’re trying to accomplish. That’s probably 60 percent
of it, and 40 percent of it is customized to specific tasks. You almost want to break it up
into a factory line where you’re extracting data, then you’re loading the data, and then
you’re transforming the data. The extraction and load is probably diagnostic and when
you’re transforming the data, that would be more specific. [P-12]
I would say it’s both, but we’re very cognizant of the ROI. There’s no doubt you can find
lots of things that can be automated. The question is, is it worth it?...It has to not only be a
standard process, but high-volume on that standard process to make the bot worthwhile.
Let me say it that way. So, if in a specific client environment or for a client engagement
that’s true, that would be worthwhile to do for a specific client. [P-8]
One participant, however, emphasized that bots intended for use by multiple clients
require slight (or significant) modifications for the bot to function properly for each client due to
their unique processes or technologies. The following quote emphasizes that a “one-size-fits-all”
bot is not likely to exist:
So much of audits are just manual. It's like digging into stuff, getting in the details, really
understanding stuff…So is it worth the investment to bring in a robotic specialist and create
an RPA just for this one balance for my client? Or is there a way we can build a tool that
can be customized for each of our clients with a little bit of effort. Those are the things that
are going to be done. You're never going to have one-size fits all RPA for people right now.
[P-11]
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Thus, the Big 4 accounting firms use RPA software within their internal operations, as
previously discussed, as well as their various professional service practices to automate general
rules-based processes that can be applied to several clients as well as high-volume client-specific
tasks associated with work performed for client projects as well as the implementation of RPA in
client’s operations. Participants provided numerous examples of areas in which bots are, or will
soon, impact their organizations within each of their professional service lines. We discuss the
use of RPA in each service line in detail in the following sections.
RPA in Taxation Services
Participants’ responses indicate that accounting firms extensively use RPA software in
the tax practice to automate work performed for client projects as well as to implement this
technology in client’s internal tax-related processes. Firms implement RPA in almost every area
of the tax function because there are a significant number of time-consuming, rule-based tasks
associated with tax compliance and reporting (PWC 2017). Additionally, a recent survey
conducted on over 1,000 tax professionals in various industries found that over two-thirds of
respondents believed that process automation tools offer value to their tax function (Rainey et al.
2017). The following quote illustrates the need for RPA in tax practices:
This is a hot topic for everyone in the accounting industry and specifically in tax because
there are so many redundant processes that folks go through for some of the larger
companies. It becomes even more complex when you have multiple ERPs, multiple data
sources, multiple feeder systems, and trying to aggregate all of that data. Sometimes the
data is not synergized. It’s not a nice format that is tax ready so-to-speak. A lot of
companies don’t center their ERP configurations around tax legal entities, tax registrations,
and things of that nature at the state and local level. And so even figuring out which legal
entity a transaction is attributed to can sometimes be a challenge and then, when you
compound that with multiple systems, it really creates a challenge. [P-13]
The Big 4 firms have applied RPA software to a variety of tax functions (PWC 2017).
For instance, the firms report using bots to gather tax information from clients, such as trial
21

balance data and other industry- or company-specific information needed to prepare tax returns.
The Big 4 firms also report using bots to review trial balances and convert data to a tax-basis. In
particular, bots calculate book-tax differences, apply book-tax differences to the trial balance,
reconcile intercompany transactions, and complete and review tax return workbooks.
Additionally, tax professionals indicate that they use RPA software to prepare tax returns. The
bot fills out tax returns through a tax return workbook and even submits tax returns and related
payments. Additionally, our interview participants provided the following examples of how RPA
is being implemented within their tax practices:
[The client] pulled some data out of their systems for a tax calculation function to feed into
a tax engine for sales and use tax determination, and the data ended up being formatted in
about seven or eight different ways from the single extraction. So, we created a bot for this
client that first and foremost reconciled the data, eliminated duplicates from the data set,
made sure that it tied back to a trial balance for that period. And then, it took each of the
seven work streams and pulled the data apart, tried to figure out what the right answer so-
to-speak is, and then normalize[d] it back into one output dataset. [P-13]
For example, we’ll use it in tax to pull information that we need for tax returns from a state
general ledger system and then manipulate the data to fit the form of said tax return or to
e-file the return. [P-12]
RPA in Advisory Services
In the advisory professional services practice, participants report that Big 4 consultants
look for ways that they can automate their clients’ business processes and also provide
consultancy services around RPA implementation. Similar to accounting firms, clients could go
directly to third-party venders to acquire RPA software. However, advisory practices create
value for clients by identifying the processes that can be automated, programming the bots, and
analyzing the output. This combined approach is illustrated in the following quote:
What you see right now at the Big 4, and this is a macro trend, is that they’re merging
products and services now because no longer can we go to a client and say “well if you
bring in this product then you can bring us in as a consultancy and we’ll tell you how you
22

should probably use the product.” They don’t have time for that and the product owners
now are starting to put services around it. [P-4]
Participants indicate that the challenge in implementing RPA within the advisory practice
of accounting firms is that each client’s business processes are different. Programmers can
program bots only to the extent that client business processes conform to rules and processes as
understood by the firm. Therefore, consultants need to understand the underlying details of their
client’s business processes in order to determine the tasks that meet the conditions for
automation and to successfully program bots to perform the necessary tasks. As one participant
stated:
We have a general framework on how we bring the capability in, but every client is unique
in terms of what’s the path they take through that framework. Is it for an accounting
function? Is it for a budget function? Accounting is a little bit more black and white. There
are a lot of rules there whereas with budgeting there’s some gray areas. So how do we start
to interpret those rules optimally? You have gray area but optimally how do you execute
through the gray area? With accounting the rule sets are pretty clean. They’re there. Easy
to deploy bots. When it comes to the budgeting side of it, that’s when we really need to sit
down and ask the clients to articulate exactly what they’re thinking as they make the
decisions that they do. And then, once we have that conversation we’re like, okay, of that
100 percent of the conversation, 80 percent of it falls within a rules-based framework that
we can deploy bots against. This other percent is where the workforce will need to focus.
[P-4]
The identified challenges associated with the automation of clients’ business processes
suggest that it is important for consultants working in public accounting to understand
thoroughly the capabilities of RPA software so that they can ask clients the questions necessary
to identify RPA use cases and to implement automation properly.
There are a variety of business processes that are suitable for RPA implementation for
advisory clients. Consultants can automate finance processes including bank reconciliations,
accounts payable and expense processing, fixed assets analyses, and credit assessments (Deloitte
2015). Other types of processes consultants can automate include operational processes, such as
23

inventory tracking; human resource processes, including timesheet administration; and
procurement processes, such as supplier and purchase order validations (EY 2016; Deloitte
2015).
Consultants also help clients implement RPA to mine data, as noted by one interviewee.
Bots allow clients to analyze data faster and draw greater insights than if employees manually
sift through it. Accordingly, there are various opportunities for the advisory practices to
incorporate RPA into the consulting services they provide to clients.
RPA in Assurance Services
The consensus from our interview participants is that the assurance practices of
accounting firms are in an earlier, pilot stage of RPA development and implementation than the
other professional service areas. They attribute this delay to the additional precautions needed
when conducting audit tests given the degree of risk and regulation surrounding the audit of
publicly traded companies. The delay in RPA implementation within accounting firms’
assurance practices is explained in the following quotes:
Audit was a bit behind but they used our [tax practice] blueprint and we’re funding that
right now. And it’s more interesting because although tax is regulated ostensibly, the way
we do tax and undertake it, that is not regulated other than you have to have appropriate
legal standards met and so forth. Whereas in an audit, the audit procedures are highly
regulated and subject to government scrutiny. [P-8]
Tax is further along for sure....I wouldn’t say so much that we’re just starting as opposed
to being cautious given the high-risk stakes of an audit, and we can’t screw it up. [P-6]
Although the process is at an earlier stage, two participants noted that the audit practice
might be the best place to implement bots due to the global methodologies in place. The
participants stated:
Audit is a great example of where bots are effective because you have global
methodologies. Tax is a little bit different. Every country has different tax laws and
different ways of doing tax. But in audit we have global regulators, so it means one global
24

methodology with slight variations locally. It's much easier to do a global solution,
meaning that it's scalable and used by a lot of people and, hence, effective, than it is to do
it in some of the other smaller service lines that are more fragmented. [P-7]
You're going to conduct an audit in accordance with the auditing standards and the
innovation and the technology that's being developed is being developed so that in my
personal opinion it makes the audit much more effective. It makes the audit much more
efficient. It gives audit practitioners more insight to their clients’ financial records that they
wouldn't otherwise have had before... In audit a lot of it is if you have automated controls
you're better off than if you have a manual control. You are less prone to error or you're
less prone to a control breakdown [P-9]
As described by our interview participants, auditors field-test a bot that has been
programmed to automate an audit procedure to ensure it is performing the assigned task
correctly. In particular, for a given client, an audit procedure is independently performed by a bot
as well as by members of an audit team. The auditor then compares the outcomes of the
procedures to assess the quality of the bot’s performance. Given time, it is likely that more
reliance will be placed on bots in the assurance practice. However, it seems, based on interview
responses, that repeated field-tests to verify their functionality is the extent of their current
application in the audit work environment.
Even though participants report that auditors are somewhat hesitant to use bots in audit
testing, they also describe how bots can be used to automate a variety of processes within the
assurance practice. At a basic level, an auditor can program a bot to perform routine activities,
such as carrying forward a client’s data from the prior year within the accounting firm’s audit
platform. However, our participants also discussed the use of RPA software to complete audit
tests. In particular, they provided the following examples of how RPA may be used in assurance:
Right now we’re focusing on a lot of things that are mundane or not high risk necessarily.
But can a bot go in, get a client’s ledger, get all the data, and work with the data that’s
provided from the client? Get all the debt obligations that a client has, prepare
confirmations that go to the various banks that are then confirmed back electronically?
Everything’s done by a bot, and then, to my earlier point, when we get that confirmation
back, it’s checking it against the data that we got from the client. And if everything checks
25

out okay, it automatically gets documented in our [audit platform] file so that all we have
to do is validate everything happened the way that it was supposed to happen. [P-6]
I think assurance uses a lot of data and processes that handle a lot of data, even through a
financial audit. Even if you think about validation of your cash accounts, you have to pull
the information from the ledger, then you have to send out letters, you have to get the letters
back. And most of the time that could all be automated. [P-12]
In audit we’re seeing… cognitive technologies run across the spectrum including robotic
process automation, smart automation, natural language processing, natural language
generation, machine learning, and audit. The more complex the audit task, the more likely
that they will employ multiple technologies to complete the task. So I think we're seeing
that in audit all the big four are on this journey of automation to transform how they do an
audit. [P-9]
Although the Big 4 accounting firms are currently working towards the use of RPA to
automate audit tests, such as the debt and cash confirmation examples provided, we emphasize
that it is still in the early stages of implementation. One participant highlighted that while using a
bot for confirmations is a great idea in theory, it may present multiple problems once it is in
place. For example, having a bot send out an email to all of the individuals or entities on the
confirmation list to collect information may backfire. The recipient’s server could mark the email
as junk mail, and they would never see it. Alternatively, the recipient may be concerned about
clicking on a link contained in a random email and responding to questions about a personal or
business finances. In this case, the use of a bot would result in more work for the auditor.
As this discussion indicates, there is a vast set of opportunities for RPA software to be
used in public accounting firms’ taxation, as well as their advisory and assurance service
practices to automate mundane, time-consuming, rules-based tasks. Although participants report
that the implementation of RPA is more developed in the areas of taxation and advisory, its use
is expanding in all three professional service practices.
26

THE EFFECT OF RPA ON CLIENTS AND EMPLOYEES
The Effect of RPA on Client Relations
Our conversations with interview participants indicate that the Big 4 accounting firms
tend to be open in communicating their use of RPA software to clients. The firms appear to be
open about the extent to which they incorporate automation into client projects. As one
participant stated:
There’s a point in time which [the clients] are usually brought into it. So if we’re not selling
bots directly to the client, instead we’re bringing them into our back-office operations with
project delivery. Then what we want to do is make sure that we’ve deployed them in a
manner that is improving the service levels. And we usually test those out before we take
it to the client. [Redacted]
Participants also note that the firms actively utilize RPA and its capabilities as a
marketing tool to attract clients as illustrated by the following quote:
It’s a big market facing initiative that we have right now to go out. We actually do
roadshows for our clients. Tax data analytics and robotics roadshows. We have those
ongoing. They happen every two weeks. It’s a three-day seminar that our clients can sign
up for, and they can go to, and they can get an overview of what bots are capable of and
what some of the capabilities are and feature functions. So, we are actively marketing
[redacted].
Although bots can be used as a marketing tool, one participant emphasized that in the
end, clients are mainly concerned about the product that the firm is hired to deliver, not the
manner in which it is done. Specifically, this participant stated:
[Bots are] invisible to them for the most part... Our philosophy, for better for worse, is the
clients care about the deliverable and the quality of the deliverable and the cost of that
deliverable. So what our internal processes are [is] irrelevant [redacted].
Accordingly, participant responses suggest that the Big 4 accounting firms take different
approaches to communicating their use of automation to clients. While some firms may not
display RPA practices for their clients because it is viewed as one of many tools utilized to
complete projects, other accounting firms advertise their use of bots as a marketing tool.
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Respondents report a mixed initial reaction from their clients regarding the use of RPA
software.10 Overall, our participants described their clients as being curious to learn more about
RPA and its technical capabilities. They also indicated that several of their clients are interested
in having bots incorporated into the work performed by their accounting firm or having RPA
software implemented within their own organizations. Clients’ interest in automation is
highlighted in the following quotes:
I would say they’re eager to want us to use it and not reluctant. [P-4]
Well, they’re very interested in them. They’re asking a lot of questions. I don’t think they
care as long as the quality is where they expect it to be and if we can validate to them that
the quality is the same. [P-6]
All of our clients right now are saying ‘We want some bots in our tax department.’ [P-2]
Even though interview responses suggest that many clients are interested in utilizing bots
within their organizations, this does not mean that it is always the best course of action. It takes
significant understanding of the client’s business processes to determine whether implementing a
bot will add value. The following quotes relate to the effort that accounting firms takes to ensure
that clients make a good investment in technology:
On the client side, if they come to us and say, ‘I want this one bot that does this one thing’,
we always try to take a step back and look at their entire process… Decomposing the entire
process and then finding the right technology for the right problem and it might be a bot,
but we're finding in a lot of situations it's other tools. [P-2]
In advisory and consulting a lot of the capabilities that are being brought to bear are being
built specific to a client need. It's assessing that client need and then building that
capability. [P-9]
10
The survey results of Deloitte (2015) suggest that the majority of its clients are at least aware of RPA software. In
particular, 80 percent of surveyed clients responded that they have heard of RPA at conferences or researched and
read about it on their own.
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However, some of our participants also indicated that certain clients are reluctant to use
RPA software. They generally attributed this reluctance to clients not fully understanding how
bots operate or their capabilities. In particular, our participants stated:
I think everyone is different, but if I had to stereotype, I would say it’s new, so people are
more reluctant until they see that it works. And you see a lot of times, you’re working with
a client to do a proof of concept or a proof of value to build their confidence around it. [P-
12]
The order of magnitude is mind-boggling to people when they finally see it, but the biggest
challenge is helping folks understand what a bot can do and giving up control. [P-13]
Additionally, there is concern that clients may be reluctant to invest in automation
because of the impact it will have on their employees. For example, one participant said:
For my clients receiving this there is going to be receptivity challenges. You're going to
come in and automate a bunch of work. What does that mean to the existing workforce?
How do they feel about that from a change perspective? [P-14]
Another participant described his clients’ reluctance as primarily stemming from data
issues. Bots require access to a company’s business processes and data to perform their
programmed tasks. For multinational companies, in particular, there can be issues with
transferring data to different legal jurisdiction or countries. Accordingly, clients are expressing
concerns about how accounting firms plan to protect their confidential business processes and
data and where they will process it. We illustrate this concern with the following quote:
There’s a lot of data flow issues that come out of this and a lot of other technology. A lot
of cross-border issues. Countries that don’t want certain data to flow to certain things. And
that’s been quite a headache, to be honest, on how we exchange data with our clients, but
that’s also happening now. To me, that’s the biggest area the clients are very focused on
what you are doing. I’m used to having an associate come and audit this in my headquarters.
And now I’m sending you a file, and it’s going to somewhere where there’s a bot. Where
is it going? What servers is it going to sit on? How am I insuring that you’re keeping my
data safe? That’s the big concern with clients. [P-6]
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As a result of these concerns, accounting firms are challenged to explain RPA to their
clients in a way that makes them feel comfortable with its implementation and confident that
their business processes and data are protected.
Participants identified the structuring of fee arrangements for RPA implementation as
another client relations challenge. They insist that the fixed fee model based on the number and
level of employees assigned to a project or the estimated number of work hours is not a viable
option when automation is involved. This is because the efficiency gains that can be achieved
from the use of RPA software have caused accounting firms to incur less of these traditional
costs. Multiple participants anticipate receiving pushback on the amount of fixed fees charged
for projects once clients see the possible efficiency gains that result from automation. As two
participants stated:
I think this is a challenge for everyone that’s doing this stuff in the space is how do you
price it? As an example, it takes the client two days to do something, took us an hour to
build the bot and takes 17 seconds to run. In some cases, we’re the ones running the bots
for the client and in some cases we hand the bots off and they run it. Some clients will
[push back on costs]. We take several approaches on the pricing point. [P-13]
[Client pushback] is definitely starting. I'm seeing more and more. It's not an epidemic right
now except the odd case coming up, but it is definitely there. The more people write about
this field, the more clients get into the mindset that we expect stuff to be automated. I think
it does absolutely contribute to the general cost or pricing pressure that we see in the
marketplace. [P-7]
Accordingly, participants report that accounting firms are changing the way they
structure contracts. There are significant costs involved with the development, implementation,
and maintenance of bots, and these costs need to be reflected in the fee charged to clients. This
point is illustrated in the following quotes:
We’re educating our clients on this. The cost of an audit isn’t just a senior associate comes
out and does the audit work. Now that’s going to be a senior associate comes out and spends
50 percent less time, but we also spent a whole lot more money developing the software to
allow that senior associate to only spend half the amount of time there, and that cost has to
30

be absorbed too. And so the nature of the cost structure changes and that’s not a direct one
hour less on your audit, you get one hour less cost. [P-6]
Robotics should not be a cost slammer. Robotics should be a data, quality of data, quality
of results, quality of delivery, and then quality of life of the individuals that are working
on it. [P-12]
I think everyone in the market is still trying to figure out how to price these things so that
it’s fair to the client. We’re getting paid for our time, but it’s also somewhat related to the
value that we’re adding to the organization. [P-13]
When we do work for clients internally or when we automate our internal processes, we
cut our costs… The question that we're struggling with is how much of that cost saving is
then kept by [the firm] and how much is passed back to the client… How do we do this?
Because if we're not careful all of the benefits will simply be passed on to the clients and
then it's a race to the bottom. On the other hand clients are not stupid. [P-7]
Respondents describe the challenge of structuring contracts for projects that incorporate
RPA software so that they best reflect the costs incurred and value created for clients as an
evolving issue that accounting firms face.
The Effect of RPA on Employees of Public Accounting Firms
An additional concern with incorporating a digital workforce into public accounting firms
is how employees will react to its implementation. Interview responses indicate that participants
perceive employees at the Big 4 accounting firms as being generally content with the integration
of RPA software into their work. This overall acceptance of RPA is attributed to the fact that
employees are now able to perform more value-added tasks and expand their skill sets, given that
bots are now able to perform the time-consuming, mundane process that employees were
previously required to do (Accenture 2016). Specifically, participants stated:
I think we’ve made jobs easier and allowed people to focus on more value-driven work.
You spend 100 hours pulling information through a tax return versus an hour. Well, you’ve
got a lot more time to focus on reviewing that tax return, thinking of creative ideas to help
the client. [P-12]
You’re talking about the work that characterizes soul-crushing work. The type of work that
we’re taking off the table is the type of work people don’t want to do… We think it will
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help with attrition because you bring these kids out of school who have the vision of going
to work for a big four, wheeling around an airport… and doing all the high-end
consulting… So it has been received really in a positive light. [P-5]
Anyone at [our firm] that has a business that they’ve built a brand around doing dull,
repetitive, mundane things, they are being moved up the food chain because of being
displaced by the bots. And what we’re finding is they wanted to be moved up the food
chain. Somebody had to be in that role to do that dull, mundane, transactional work.
Therefore, they sort of happen to be the person doing it. They didn’t want to be the person
doing it. And so they are actually happy to be displaced, and now they’re able to think as
opposed to just do. [P-4]
A lot of people don’t like the mundane. Let’s audit cash, let’s audit equity, let’s go audit
AP [accounts payable]. It’s not fun. It’s not exciting. They want to talk about derivatives.
They want to talk about tax, pensions, business combinations, valuations, talk to the C-
suite. So if we have bots doing the boring stuff, it’s going to improve our turnover as well
because we don’t look at the threat [of mundane work]. It was interesting, the guy I talked
to yesterday. His point was that everybody’s talking about how in the audit profession
we’re going to fire 50 percent of our people once bots do things. He’s said it’s the exact
opposite, we’re going to use them to do more value-added work. [P-6]
The folks in audit like any of these technologies that are being pushed out and available to
them because it's taking away the tasks they don't want to be performing anyway that are a
lot more manual. It's shifting what their capabilities should be. Previously it could have
been a lot more manual and not allowing them to spend as much time performing analytics
or applying professional judgment whereas now it's freeing up some time for them to do
that. [P-1]
Consistent with the idea that employees at public accounting firms are embracing the use
of RPA software, firms are reporting higher job satisfaction ratings and lower levels of attrition
(PWC 2017). Multiple participants made similar points in our interviews. In particular, they
stated:
You can’t isolate the factors, but you can see it in job satisfaction ratings. You can see it in
attrition going down. You can see all of those things that could potentially be part of the
story of why our attrition is an all-time low right now. It’s not just because of bots. It’s a
lot of things going on, but that enters the story. [P-8]
One of the reasons why we’re accelerating this in our back office is so we can improve our
retention as well as the quality that we attract. Because the last thing somebody coming
into a first job, they’re excited it’s a first job, the last they want to hear is “hey, we’ve got
this dull, mundane, repetitive stuff we would love for you to do.” And they’re really keen
nowadays, when you’re sitting down interviewing reading through the glossy brochure
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stuff and saying “hey, that sounds like all mundane, repetitive stuff.” Where we can truly
get away from that, I think it can be very genuine and authentic when we are interviewing
for positions and the things that we’re going to be talking about, are these higher value
things that are going to require their innate cognitive sort of ability to make decisions as
opposed to just do the same thing day-in and day-out. I think it’s going to be reduced
turnover, so increased retention as well as increased quality. [P-4]
Accordingly, participants attribute improving job satisfaction indicators at public
accounting firms to employees’ acceptance of the implementation of RPA software, largely due
to the resulting shift to more value-added work caused by the automation of mundane, rules-
based tasks.
Some participants did, however, mention that a subset of employees appear to feel
anxious about the implementation of automation with their firms. This anxiety relates to a fear of
having their existing job replaced by a bot. One participant credited this concern to employees
not fully understanding the technical capabilities of automation and how accounting firms plans
to utilize bots in conjunction with its employees to provide professional services. As one
participant stated:
I think some folks struggle to see how a robot could do what they do. So I think the more
that we use them and the more we deploy them in different contexts, I think those folks
will start to understand, look I’m not replacing you. I’m pushing you into more value and
more into the higher value loop opposed to the low value loop. [P-13]
Another participant emphasized that employees seem to be more concerned about the
future implementation of artificial intelligence in public accounting firms, rather than RPA
software. The former digital workforce tool has more advanced technical capabilities, which
represent a greater threat to their existing jobs. In particular, this participant stated:
There are people that hide behind busy work. Those people are in trouble, and they’re
scared. And so everyone has those. But by and large we’re trying to get people who are
analytical...Where there is more anxiety is when I demo something that I’m doing with
[artificial intelligence software] and peering around the corner on that. That aspect of
intelligent automation makes people nervous because that’s where there’s manifestation of
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professional knowledge turning into judgment and reasoning like the way a human does.
[P-8]
Although participants report that certain employees seem to be anxious about the impact
that RPA and more advanced digital workforce tools will have on the profession at this early
stage of implementation, the majority of employees in the public accounting industry appear to
be embracing the shift from working on mundane tasks to more value-added and thought-
provoking activities.
Additionally, the majority of participants indicated that they did not expect their
accounting firms to reduce the number of new employees hired as a result of implementing bots.
They do not generally view RPA software as a job replacement. Rather, they consider it to be a
tool that allows accounting firms to reallocate their employees to more value-added activities,
increasing the overall quality of the professional services provided to clients. One participant
even expressed the opinion that RPA will result in job creation, rather than job replacement.
Additionally, participants discussed how they expect the efficiency gains possible through
automation to lead to more work-life balance for employees. This point is illustrated in the
following quotes:
We’re not ramping down our hiring efforts in any way. There’s a lot of things that we think
we can refocus our time and effort on that allows us to hire just as many people. And, as
you know, we’re constantly focused on work-life balance. And so, if we can have the same
number of people working less, that would be something that we spent the last hundred
years trying to get to the perfect state. [Redacted]
They want more of it [RPA] because it makes their life easier. I wasn’t sure what they were
actually going to think because you do have these stories in the papers and the press that
everybody’s going to lose their job. I think those people are distant from the reality of the
work environment. We can’t hire enough talent to do what we need done. And so you wind
up giving people a lot of work to do in a short period of time. This should give them that
balance. [P-12]
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One participant, however, indicated that he anticipates a decrease in future hiring at
accounting firms as a result of automation. In particular, he stated:
You’ll need less people to do the same amount of work, and the way that will happen isn’t
because people lose their jobs. You probably just would not hire as fast as you would
otherwise when you’re growing. At least right now, that’s what I’m envisioning. We’ve
grown significantly for the last five or six years, and so that typically would mean you have
some growth rate at the bottom of the pyramid. You would not have to grow that bottom
of the pyramid as quickly is how I would term it. [P-8]
Accordingly, there appears to be some uncertainty regarding how participants perceive
RPA will affect future hiring practices at public accounting firms. Although the majority do not
anticipate a change in hiring practices in the near term and even suggest that employees may
enjoy more work-life balance as a result of automation, there is potential for a reduction in hiring
at the staff level.
Career paths are also expected to change because of the implementation of RPA. Multiple
participants expressed the view that automation expands the types of careers available to
employees within accounting firms. In particular, they report that the increased use of technology
in public accounting has led to the need to hire computer programmers and software engineers to
help with its implementation. As previously discussed, the Big 4 accounting firms rely on a
combination of accountants, computer programmers, and engineers to build the bots that are used
in their professional service practices. The following quotes highlight the expanded career
opportunities that are available to employees at public accounting firms as a result of
implementing RPA:
We’re hiring a lot of coders and computer engineers to teach ten percent of the assurance
practice, who will then go out to their markets, and then further teach whatever it is that
we need so that we can all on our own build bots. [P-6]
It broadens the services we offer our clients, so it broadens our portfolio of services and it
broadens the opportunities for individuals to be successful. [P-12]
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Hence, interview responses suggest that more career opportunities are available within
the public accounting industry as a result of the current shift towards incorporating a digital
workforce.
Participants stated that careers in public accounting are also changing because employees
are now able to more quickly advance within their firms. This advanced timeline results because
employees are able to focus more time and effort on expanding their skill sets and performing
value-added work, rather than completing time-consuming, mundane tasks. As one participant
stated:
I think that [RPA] allows people to shed the more mundane work and be able to focus more
on analysis and perhaps climb the curve of professional development faster. I always laugh
because people say “well in order to do that you have to learn. You’re going to be taking
away the basics for people to learn.” I started a long time ago. We had ten keys and a big
spreadsheet. A lot of times we had to build the books and records in order to do a tax return.
If you would ask me back then I would have thought “Yeah, in order to really know how
to do taxes you got to know how to build the book and records.” As it turns out, you don’t.
[P-8]
Respondents also perceive employees, particularly at the staff level, as beginning to view
careers in public accounting differently from how they viewed them before the implementation
of RPA. Previously, many employees entered jobs at accounting firms with the expectation of
leaving after a short time due to fatigue from constantly performing tedious and dull tasks.
However, participants observe employees’ attitudes towards the possibility of a long-term career
at public accounting firms shifting now that bots can complete these undesirable activities. One
participant described this shift in mindset as follows:
Right now there are career paths that provide the ability for upward mobility. However,
some people get burned out very early on because they’re not doing what they thought. In
their head, they did four years, six years, eight years, and then they’re coming out of college
and they’ve got these high hopes of doing this very impressive type work that they’re
excited to go home and tell mom and dad about. And where they come in and they’re not
doing that exciting work that they’re proud to take home to mom and dad, then it sort of
isn’t something they enjoy, they’re probably going to then start to look elsewhere.... So it’s
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viewed as a first job, not as I’m going into a career... they’re going to the first job because
they realize that as the newest employee you’re likely going to be doing the dull, mundane,
repetitive things. And now, if we don’t have that at all for them to step into, and it’s day
one that they’re stepping into a higher value role that they are excited about and want to
tell mom and dad and do tell mom and dad about, I think maybe they sort of leapfrog that
stuff that otherwise burns them out, and forces them to create this illusion that it’s just a
first job and not a career. And maybe we do get back to this whole career thing because
they value where they’ve land[ed]. [P-4]
Interview responses suggest that the implementation of RPA software is having a positive
effect on career opportunities within accounting firms. Participants also report that employees
are more interested in long-term careers in public accounting, in addition to being able to
advance more quickly within their firms.
A final effect that interview participants report RPA software is having on the work
performed in the public accounting industry relates to the outsourcing, or offshoring, of tasks
outside of the US. Specifically, they discussed that the implementation of automation within
accounting firms is leading to a reshoring of previously outsourced work. Firms are choosing to
use bots to complete these tasks because they can achieve greater cost savings from automation
than they can from outsourcing (PWC 2017; Deloitte 2015). In fact, PWC (2017) estimates that
RPA software can complete a business process for less than half the cost of outsourcing. The
following quotes illustrate the effect that RPA is having on accounting firms’ decision to
outsource work:
What you hear now is re-shoring. Offshoring is we export this transactional work overseas
because they could do it cheaper. It made absolute sense but sometimes there’s a
deterioration of quality when you offshore simply because you don’t have it there, you’re
not supervising it. Now with the re-shoring, you’re bringing back the task, not the job.
You’re bringing back the task, and a bot is doing it as opposed to a person. And so, you’re
bringing back the quality. You’re reducing cost. What we see with a lot of the offshore
providers now is that they are putting bots very quickly on the operations that they’re doing
just to try to compete and to try to sort of shift the tide of this on-shoring/re-shoring. [P-4]
We're in the middle of another industrial revolution, the next level revolution. While things
were sent to offshore centers, now if we can build a bot to do it or there's some sort of
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automation to do it you don't have any human doing those same monotonous clicks… It's
not that we’ll completely replace or get rid of our offshore centers but I think their role may
change. If it is one of those standard processes that you can automate with a bot, then let's
put that into place. [P-2]
If I was to run a business today that was not currently off shored. I wouldn't use offshoring
I would do automation instead and I think that will have a material impact the classical
diffusion models in economics… I think that the whole thing is going to stop. I see more
and more companies bringing back stuff onshore. [P-7]
Hence, interviews responses indicate that the implementation of bots is causing a
disruption to the outsourcing of accounting work. In particular, business processes that are
suitable for automation, as opposed to jobs, are being re-shored back to the US.
THE EFFECT OF RPA ON QUALITY WITHIN PUBLIC ACCOUNTING FIRMS
The consensus from interview participants is that the implementation of RPA by public
accounting firms has led to an increase in the quality of professional services provided. One
reason that firm leaders believe RPA is improving quality is that companies have to more fully
understand their process before they can automate them. Through process analysis, they often
find weaknesses that they are able to adjust, resulting in efficiency and effectiveness
improvements. One firm shared internal data and suggested that about 20 percent of the bots they
have implemented have resulted in significant process improvements.
Another reason our participants attribute to the overall increase in quality is accountants’
ability to focus on value-added activities now that bots are completing the mundane, rules-based
tasks that previously occupied their time. For example, the use of RPA software in the assurance
practice to automate basic audit procedures is expected to make more time available for auditors
to focus on areas that require more judgment and, consequently, increase the quality of the audit.
As one participant stated, “We can spend more time truly risk assessing and focusing on high-
risk areas. [P-6]”
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The reduced attrition credited to the implementation of RPA also results in higher quality
performance. As explained by one participant, if the same employees work on a given account
year after year, then they can focus more time on providing value-added activities as they
become familiar with the client’s operations over time. In contrast, if new employees are
assigned to a given account each year, then time must be spent familiarizing them with the client.
The following example explains this point:
Let’s just take something as simple as doing a tax return. When you have constant turnover
year-after-year on the same return, which is by nature kind of the business model, versus
if you start out of college and you’re the preparer on that return, I’m talking about big
things, big returns now for example and it’s not just returns, it’s clients, or however you
want to think about it, and then you become the senior on that same client, and then you
become the manager. When you’re able to have some consistency there, the quality does
go up because there’s not as much pressure on the budget, there’s more focused analysis.
[P-8]
Accordingly, participants believe that public accounting firms’ implementation of RPA
software has led to an increase in the overall quality of professional services provided through
multiple channels.
One specific area of quality improvement attributed to RPA is increased accuracy of the
work performed (PWC 2017; Accenture 2016; EY 2016). In particular, the use of bots to
complete business processes reduces the risk of transactional errors, such as inaccurate data
input, sequential steps being overlooked, and rules being applied incorrectly (Accenture 2016).
One participant quantified the increase in accuracy stemming from automation as follows:
We have seen accuracy and compliance levels go straight up to 99.9 percent overnight.
What is the base it comes off of? That’s usually around a 90 percent base. That doesn’t
sound like a lot in terms of 90 to 99 [percent], but at the end of the day, what’s important
is that bots are getting it right 99.9 percent of the time. [Redacted]
This increase in accuracy results in less time and resources being spent to re-perform
work done incorrectly the first time.
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Participants note that RPA software has also improved public accounting firms’
efficiency. Bots are able to complete tasks 24 hours a day for 365 days of the year, which allows
for the continuous provision of services (Accenture 2016). RPA service providers estimate that
bots reduce average handling times of business processes by 30 to 40 percent (PWC 2017;
Accenture 2016). Additionally, EY (2016) estimates that average run times decrease by 76
percent through the use of RPA. Interviewees illustrate the improvements in the following
quotes:
Processing times we’re seeing improved 70 to 80 percent, and that’s not because the bot
has been capped out in terms of the capability. Because the bots interact with the process,
automates the process by interacting with the IT that it needs to, so the systems and
applications that it needs to work with. The constraint is how fast is the client’s IT
environment. Could that 70 percent be higher? Absolutely, it could be. [Redacted]
I think right now we have about 70 bots that are built or under construction. We think by
end of our fiscal year [date removed] we’ll have about 100. We do an ROI on all these, and
we have a library and all that kind of stuff. We believe that’ll take about 250 to 350
thousand hours out of our processes [redacted].
We did another bot for a client in [city name removed] where they were spending two man-
days doing something. We built a bot in about an hour that turned that task into a 17 second
task [Redacted].
One Big 4 firm conducted a test to determine whether using RPA was more efficient than
having a person complete a task. A participant commented on this experiment in the following
statement:
They put a human up against a bot to make sure that it made sense to use the bots to convert
the work paper from the old system to the new system. They had a competition between
the human and the bot. They did do the numbers and how much time it would save…it was
a significant difference. They said it wasn’t even close. [P-3]
Additionally, another firm shared internal data that by the end of 2017 they had
implemented over 1,000 bots that saved on average over one million human work hours per year.
Furthermore, the firm reported plans to increase the number of bots by ten times by 2020.
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The efficiency of RPA implementation can also be measured in terms of throughputs, or
the amount of work that can be completed in a given time period. One participant quantified the
increase in throughputs as follows:
What we’re seeing with throughputs is a 3 to 5 [times improvement] easy, and the logic
behind it being easy 3 to 5 [times improvement] is that the bots can work all day long, so
365-24-7. So if your baseline is an eight-hour day, and you’re simply going to go 24 hours,
so three of those shifts, you’re going to get 3 [times improvement] in any one day period.
And if the bots are able to work on the weekend, so those systems or applications aren’t
down... and the bot can be open for business, you can get 5 [times]. [Redacted]
Hence, public accounting firms are documenting significant improvements in efficiency
resulting from the implementation of RPA software in their professional service practices.
Accounting firms are able to monitor the quality of deployed bots through features
embedded in RPA software. As discussed by our participants, users can retrieve information
regarding the accuracy and efficiency of bots on a continuous basis. In terms of accuracy, this
information includes error rates as well as identified exceptions to the programmed set of rules.
Users can obtain several efficiency metrics, such as processing time, the amount of time that the
bot is not in use, and maintenance time. Our participants described the monitoring features of
RPA software as follows:
They are monitored through a dashboard. It’s easy to know the error rate, their up time,
down time, maintenance time. That’s just part of the technology. [P-12]
You should be continuously monitoring the bots, and a lot of the RPA... software comes
with a performance dashboard. It will tell you: did the bot operate today, how many cases
did it process today, what is the processing time, or the average per case. It will tell you all
these things and also tell you how often it breaks, the exceptions to the process, why it was
an exception, so you can start to build rules to monitor the bots. The bots don’t do it by
themselves, but just like you program the bot against a rule set, you can also build in checks
for the bots. So you could be checking the bots on a daily basis. [P-4]
In summary, these documented efficiency improvements have led to substantial cost
reductions for accounting firms (Accenture 2016, EY 2016). For example, PWC (2017)
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estimates a decrease in costs of up to 80 percent as a result of implementing RPA software.
Perhaps most importantly, the accounting industry appears to be using RPA to become more
efficient while improving the overall quality of the professional services provided.
THE SKILLS NEEDED TO WORK WITH RPA
Given the influence that RPA software is having on the public accounting industry, we
also asked our interview participants to describe the skills accountants need to succeed in this
changing environment. The majority of participants highlighted the importance of having, at a
minimum, an awareness of RPA. As noted by participants, RPA significantly impacts staff-level
work, so it is imperative that employees at this level understand the technology and are able to
identify use cases for automation. As one participant stated:
Think of it as a pyramid structure and a lot of the heavy lifting is done at the bottom of the
pyramid by your younger individuals that are getting that time back to do things that they
couldn’t do in the past. [P-12]
Several participants also emphasized the importance of accountants graduating from
universities with computer programming or coding experience.
I think it's going to have an impact on your guys coming out of school. I think some of
them can get jobs if they do put some of their time into analytics or into robotics. They can
probably get jobs with the firms working on some of the stuff coming out of school because
I know we are looking to hire people who have different backgrounds that bring this stuff
to the table. [P-11]
The professional that will be hired going forward will not only have accounting and
auditing skills… but they're also going to need to have analytical skills and be able to
understand data analytics. Be able to analyze data, understand visualizations, and have a
base understanding of IT. [P-1]
As previously discussed, respondents report that staff level accountants perform much of
the bot programming. One participant stated how easy it was to train interns to code bots:
In two weeks we trained interns how to program basic bots and we thought “If we can do
that with the interns why can’t we do with our own folks?” [P-8]
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The following quotes from our participants summarize their view on the importance of
accountants having experience with technology in the public accounting industry:
They need two things: one, an awareness of what it [robotics] is and how it operates, and
two, some level of programming around it. I think it’s important. [P-12]
I’m more interested in what technologies are you familiar with, what ERP experiences have
you had, what analytic tools are you familiar with? Are you certified in any of those tools?
It’s more centered around the data part of it.... It’s going to be very hard for students if they
walk in just knowing a lot of tax stuff, and they’re not tech savvy. It’s going to be tough to
compete in this space over the next three to five years. [P-13]
Accordingly, interview participants believe that accountants entering the workforce with
an understanding of the capabilities of RPA and computer programming experience have a
competitive advantage with regards to working with the technology tools that are being
implemented in public accounting firms.
Participants also stressed that accountants need to cultivate critical thinking as well as
social skills. Given that bots complete many of the mundane, rules-based tasks previously
performed by accountants, accountants are now expected to spend their time on value-added
activities. This requires accountants to be creative and innovative as well as capable of solving
problems. Participants note that accountants also need to be able to work well in teams so that
they can collaborate on creating new ideas and finding solutions. This point is highlighted by the
following quotes:
I think it’s more of the soft skills. I think most would think programming language. I don’t
think it’s that because so much of this is drag-and-drop type stuff now, so a functional
person can design and develop bots. I think it is the critical skills: critical thinking,
problem-solving, collaboration. They [students] are already used to doing it on social
media. They’re used to collaborating but sometimes they don’t think about it in that
manner. But as it relates to the workforce, I think a greater collaboration, meaning you’re
bringing in new ideas. Knowing that you can cycle new ideas much quicker than you could
before. [P-4]
Having the skills of empathy and building relationships and understanding knowledge is
dispersed. So not one person can know it all. You have to have the ability to be able to
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function in a group in a way that makes the team IQ higher. All of them being creative and
innovative, those are the real key skills. [P-8]
Similarly, interview responses suggest that it is important that accountants have
developed oral and written communication skills. Staff accountants need effective
communication skills to collaborate with a team to provide value-added solutions. Additionally,
accountants must also be able to explain RPA software and its technical capabilities to clients.
As one participant stated:
Some of the other skills that have been taken for granted is around communications and
that could be chalked up to social media again. Twitter, 140 characters, no punctuation
needed. We don’t struggle with it but we’re just mindful of it at [firm name removed].
Good ol’ oral and written communications. That’s not going anywhere. And frankly, to be
able to deliver these more innovative-type solutions to our clients, you need to be able to
effectively tell a good story, and you can’t tell the story in 140 characters. It’s not just the
written but it’s also being able to step through. There’s a problem that we’re solving and
being able to articulate it. There’s an approach we’re putting to it. And then there are results
or there are hypotheses as a result of the problem and the approach would apply. [P-4]
We also note that while the accounting profession is changing, the underlying accounting
knowledge required of accountants has not been altered. Participants insist that accountants still
need to have a thorough understanding of technical accounting matters. However, this
knowledge is needed at an earlier point in their career as a result of the time spent doing
mundane work and gleaning experience by watching others being reduced. One participant
comment on this transition in the following quote:
Our auditor capabilities are converting to having to be more advanced in data analytics and
understanding those capabilities. Being able to apply these advanced technologies to the
audit such as cognitive and RPA yet they still need to keep a deep understanding of their
industry and have industry knowledge and experience… They still need to know how to
apply the audit methodology by using their professional judgment and have a working
knowledge of IT systems… Last, they need a solid foundation of accounting and auditing
skills with that deep understanding of our clients’ business processes and controls. So a lot
of that stuff hasn’t changed over the years but it's now more important and they're able to
spend a lot more time doing those types of things versus the manual things. [P-1]
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Hence, the consensus from our interviews is that accountants entering the public
accounting industry must have critical thinking and social skills in order to effectively
communicate the capabilities of RPA software to clients as well as to successfully complete the
creative, value-added activities that they now engage in earlier in their careers. In addition, new
accountants need a deeper understanding of accounting and auditing skills since more of their
time will be spent doing value-added work than was previously the case.
THE FUTURE OF RPA
The Expanded Use of RPA
We asked our interview participants to discuss how they expect RPA to influence the
profession in the future. All participants expect the use of RPA software and other digital
workforce tools to expand in future years—and to expand at an accelerated pace. They note that
the Big 4 accounting firms are still in the process of identifying use cases that meet the criteria
for automation within their various professional service practices, so bots will be used to perform
more rules-based tasks as they are identified over time. As one participant stated:
The only answer I can think of is just expanded to include just about every function that
we perform as a services organization. We’re encouraging folks to think outside the box
and find ways that bots can streamline our work. [P-13]
Participants also expect that continuing technological advances will lead to the use of
more sophisticated automation tools along the digital workforce spectrum, including machine
learning or artificial intelligence technology. The following quotes elaborate on participants’
predictions regarding more advanced digital workforce tools:
I see bots being replaced by artificial intelligence. This is a journey. I think robots are the
first step. You need to go through the process to understand what they can do and then to
lead you on the journey or the S curve. The next stop would be some type of artificial
intelligence.... It’s so amazing, I think, the speed of change. I can’t get my head around
how fast it’s moving. I would have told you bots will be here for three to five years. I think
45

in another year, it will be commonplace, and then I think it’s going to peak. Then I think
artificial intelligence will merge into what you think robotics are. [P-12]
I think the more basic automations are going to become much more advanced. I think what
you're going to start seeing more of as a general trend is configuration based technologies
or rules based technologies, which aren’t going to be configured, they're going to be
trained. So there's going to be more learning based attributes to a lot of technology in
general. A lot of automation technology today is you ask people what they do, you watch
people work, you configure it with rules. That's going to quickly move to learning based
technologies that watch you work, give your next best actions, kind of have a predictive
element to it because it's based on large data sets, and algorithms over time it can figure it
out… As long as it somewhat follows a pattern, the technologies are going start being able
to discern those patterns and build their own automation. That's where the market is going.
Specifically, RPA is going be more predicated on machine learning and integration of more
advanced AI or more advanced automating technologies, not just rules based automation.
[P-14]
In audit we're moving from RPA to cognitive… We have a tool that we use that is a
cognitive tool that the more you feed it, the more it learns itself… We're seeing more of a
shift particularly in audit at least and definitely in consulting because consulting's moving
towards helping companies implement chat bots which is much more than just RPA. Given
this, we're seeing a move from RPA to cognitive. I definitely think that we're going to be
at AI probably in the next ten years. [P-9]
I would say there’s nothing but an accelerating trend on using [bots]. Bots is just the
beginning. I think 12 months from now if we had the same conversation, we’d be talking
a lot more about the higher-level intelligent automation around natural language
processing, cognitive automation, using machines to at least maybe start doing the
associate level work for some of the analysis that we do. I see that accelerating, not
decelerating. [P-8]11
Five years is way too far to really know because a lot of things can happen between now
and then… However, the technology itself is progressing very, very quickly. The general
adoption and expectation of technology is increasing… I think everybody is aware of it
and understanding it, which is going to drive more adoption. The problem is not going to
be the technology. The technology can do it. Processing power is improving… and I think
in five years it’s going to be very different. The situation in ten years is currently
unrecognizable. If you look back at 2016-2017, I think of it as a stone age. [P-5]
11
Expert Systems, an artificial intelligence solutions provider, defines natural language processing as artificial
intelligence that understands, analyzes, manipulates, and generates natural languages (www.expertsystems.com).
Cognitive automation is software that leverages artificial intelligence technology to expand the set of tasks that can
be performed by RPA.
46

In fact, participants report that the Big 4 firms are already experimenting with deploying
bots with these more advanced capabilities. As one participant described:
We’re already seeing a bolting on of cognitive capabilities, so it’s not these rules-based
bots doing one thing and then there’s this huge bridge that needs to be built before you get
to machine learning and cognitive, smart algorithms. We’re seeing the RPA vendors now
create that cognitive capability.... They’re coming out with these algorithms that are
machine learning. It’s no longer a rules-based process. It can be a process that has
discretion in it, so I go left sometimes, other times I go right. They’re actually deploying
bots now. We’ve got a few use cases around where we’re deploying cognitive bots. [P-4]
Thus, interview responses suggest that the use of digital workforce tools is likely to
expand at a rapid rate in the public accounting industry. In addition to deploying bots to
complete an increasing number of rules-based business processes, firm appear to be using more
advanced automation tools to perform higher-level tasks that require judgment.
The expected advancement of automation in the public accounting industry to include
forms of artificial intelligence that are capable of making judgment-based decisions raises the
concern of how the accounting profession will evolve to avoid becoming obsolete. Frey and
Osborne (2017) developed a model to assess the susceptibility of 702 current occupations to
complete automation. The model assessed the probability of automation for tax preparers at 99
percent, the eighth most at-risk occupation, while the model assessed the automation of
accountants and auditors at 94 percent. Accordingly, accountants, particularly in the area of
taxation, are at risk of suffering from technological unemployment.
According to our interview participants, the Big 4 accounting firms are aware of this
possibility and are being proactive in terms of making strategic changes to protect themselves
from complete automation. One participant explained how his firm is taking steps to reposition
itself as a technology company that has technical, accounting-based knowledge to provide
47

professional services rather than simply being a public accounting firm. This participant
described his accounting firms’ transformation as follows:
Technology, whether you’re talking about process automation, artificial intelligence, etc.,
it’s dramatically changing the way we do business and more importantly, we know it’s
going to even more dramatically change the way we do business in the future. Our CEO,
if you will, has challenged us to think about ourselves as a tech company that provides
assurance or does a lot of other things. We’re really trying to change the way we look at
ourselves, but not from a financial perspective, just from our mindset, that we are a tech
company. I mean that we can’t exist, we can’t survive, we can’t continue to be competitive
if we aren’t a technology company and if we’re not up-to-date on all the things in the world
that are technology based. That’s going to rapidly change, so we’re trying to retransform,
repurpose ourselves to bring the skill sets we’ve had historically, which will always be
critically important, but to layer on that technology piece [redacted].
In addition to the accounting firms having to transform themselves into technology
companies, participants believe that individual roles within firms will have to adapt to stay ahead
of complete automation. Another interview participant described how he expects the tax
profession to change, given its high susceptibility to automation. In particular, he predicts that
the role of the tax accountant will evolve from being focused on technical tax knowledge to data
mining and analysis. His prediction is summarized by the following quote:
One of our predictions is that the tax professional of the future is actually more of a business
analyst and a data miner, a data manipulator, a data analyst as opposed to a technical tax
person. [P-13]
Other occupations within the public accounting industry will similarly have to find ways
to evolve to survive. Accordingly, one of the expected consequences of implementing RPA
software and more advanced digital workforce tools in the public accounting industry is that it is
forcing the profession to change.
48

Governance surrounding the Use of RPA
The use of automation in the public accounting industry also raises questions relating to
the required governance and internal controls needed to protect accounting firms as well as their
clients. One participant described this governance concern as follows:
These bots do what they’re told to do. If you tell them to do bad things, they will do bad
things 100 percent of the time. [P-4]
Another participant noted a major consideration with the implementation of RPA is the
maintenance of the technology. Instead of an individual whose work is reviewed and monitored
by a manager or partner, bots are set up to function independently. However, it is still possible
that something could go wrong. This concern is highlighted in the following quote:
There are very few people dealing with the question of ‘How do you manage the virtual
workforce that runs in the thousands?’ Now most clients if you have five, ten, fifteen bots
you can have them on a spreadsheet, you can sort of control what they do on your laptop.
That's easy. Once you get close to a thousand bots you can't do that anymore. What we had
to do was to create a 24/7 manned bot control room [in a location] where every single bot
that is running on our infrastructure is monitored 24/7 by a group of people. [Redacted]
In a similar vein, accounting firms must continually take steps to ensure that access to the
programming interface of bots is restricted to authorized personnel and that internal as well as
client data is protected from breaches. As another participant stated:
Internally, there is a huge focus on what I’ll call the cyber risk, the cyber security risk, in
that if somebody got a hold of this could they program it in a way that would be nefarious.
[P-8]
The profession also needs to consider the appropriateness of traditional internal control
mechanisms in the evolving public accounting industry or whether new internal controls are
required to support the digital workforce tools being utilized. For instance, accounting firms
must consider the business processes, or combination of processes, that are appropriate for a
single bot to complete. This point is highlighted with the following quote:
49

Right now there’s policy and procedures to drive and incentivize the behavior of us in the
physical workforce. In bringing in the bots it is a rethinking of policy and procedures on
these new digital labor capabilities. So in bringing in the bots, do you need segregation of
duties like you had before? [P-4]
Hence, interview responses highlight the necessity of firms to seriously consider the
proper governance and internal controls that need to surround automation in this new era of the
public accounting profession.
Regulation of RPA
In addition to internal factors, there are many external influences that could impact the
extent to which RPA is used in the accounting profession. Regulatory agencies, such as the
Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight
Board (PCAOB), will likely implement standards surrounding the use of RPA in accounting.
Participants note that while there may be some processes for which the use of RPA is easily
accepted, there are many other procedures that may pose a concerns for regulators. The
following quote provides insight related to regulatory concerns surrounding the use of RPA in
accounting:
At this point where [RPA] is only implemented with routine processes, I would imagine
that it is pretty non-controversial. It is basically preventing a lot of mistakes since it is a
robot. As long as it is a pretty routine process where if it’s done right then it’s done right.
And since you are excluding the human mistake then they are rather non-controversial.
Where the regulators will become much more involved is when we start talking about
solutions with artificial intelligence in them and where we are introducing a lot of analytics
in our audit. Part of the problem is that regulators don’t want to take some of the analytics
results and decide this is now substantive evidence so you don’t have to do as much work.
For example, what a lot of analytics does is highlight anomalies. So we are really
highlighting what the riskiest population is from a statistical standpoint. You can imagine
if I am going to highlight the riskiest population, the remaining population should be a lot
less risky and I should be able to do a lot less work on it. But the regulators don’t view it
that way yet. So I think that’s where they are definitely pushing back and that it will be a
long way to convincing regulators. [P-10]
50

Along these same lines, another participant highlighted the regulatory issues that will
arise as accounting firms move toward automating more complex situations. This discussion is
illustrated in the following quote:
For [the firms] to say we're going to just replace people with this, I don't see how a regulator
or an auditing standard where they say ‘Oh well did you consider this contradictory
evidence?’ ‘Well, no. We didn't program the computer to do that.’ We would get roasted
if they found out that we were handing it over to computers. People would just annihilate
us and our industry would be in trouble. Because it really does take so much professional
judgment and so much discussion. [P-11]
With all of these potential regulatory concerns in mind, participants report that the Big 4
accounting firms have continued to advance the use of technology in the accounting profession.
The firms have even taken steps to communicate with regulators throughout the process of
implementing digital workforce tools in their professional service lines. One participant
commented on their efforts to help the PCAOB understand RPA in the following quote:
Throughout all of our innovations that we work with in the audit innovations group we try
and take the PCAOB along the journey with us a little bit to keep them up to speed with
what's out there as far as what's available and what's out there from a technology
perspective and how we're applying that to the audits. [P-1]
While this approach may currently require more time and effort, accounting firms hope it
will make the transition to using more technology in their work easier in the long run.
CONCLUSION
The use of RPA is increasing dramatically. The purpose of this study is to gain a greater
understanding of the current and potential future use of RPA in the public accounting industry.
To do so, we conducted interviews with highly qualified individuals to learn more about the
opportunities and challenges of using RPA in accounting settings. Our interviewees provide
valuable insight into why firms have adopted RPA, how RPA is being used in the accounting
profession, and how RPA affects accounting personnel.
51

Interview responses suggest that tax services have more experience with RPA than
advisory or assurance services, though RPA use is increasing in all segments of the public
accounting industry due to the impressive gains in both effectiveness and efficiency resulting
from RPA. Our respondents indicate that RPA is not reducing head count as some are concerned
that it will, but rather has shifted labor to more value-adding tasks. As a result, employee
satisfaction and retention reportedly have increased. Participants note that the change in labor
tasks will require a different skill set for accountants in the future, though the use of third-party
software programs allows accountants to create bots without extensive knowledge of and
experience in coding.
Our interviewees indicate that the use of RPA will continue and increase as firms
discover new ways to incorporate RPA in their business practices. RPA implementation may be
further bolstered as it incorporates artificial intelligence. The changing technological
environment provides academic researchers with an opportunity to contribute to practice. By
collaborating with practitioners, academic researchers can assist the public accounting industry
by identifying challenges and solutions for RPA implementation in order to help firms more fully
realize the gains from RPA.
In particular, the insights provided by our interview participants open the door to a series
of directions for future research. One such area relates to how accounting firms use RPA
software. For instance, the Big 4 accounting firms have adopted a strategy of having accountants,
primarily at the staff and senior level, identify use cases for automation and code individual bots.
This approach raises the question whether it is a more efficient to allow all firm employees to
program bots or to rely on RPA specialists. Research is also needed to determine the most
effective way to train employees to work with RPA software, given that the firms are currently
52

utilizing a variety of training methods. Additionally, responses from participants indicate that
well-defined guidelines for determining which tasks to automate do not currently exist. Future
research could examine the specific tasks that should be performed by bots as opposed to
humans. We note that our study focuses on the use of RPA software within the Big 4 accounting
firms. However, research is needed to understand how RPA affects regional and local accounting
firms currently as well as in the future as this technology continues to evolve.
Another area of future research could examine the various effects that the implementation
of RPA is having on accounting firms as well as their clients. Our participants as well as various
marketing materials discuss the cost savings and efficiency gains that accounting firms achieve
from the use of bots. However, can we test and quantify these costs savings and efficiency gains?
It is also unclear what the market effect, if any, will be to the use of bots to prepare tax returns
and perform audit tests for publicly traded clients. Does the market trust the information
provided by bots? And how can market perceptions be improved?
The effect of RPA on employees of accounting firms also raises several research
questions. Although participants indicate that firms are not currently reducing their hiring efforts,
the question still remains whether hiring will decline in the future as employees become more
productive or if attrition remains low. Research is also needed to identify the characteristics of
employees that are better able to adapt to the technological changes that are occurring and will
continue to occur in the accounting profession. Similarly, will the pyramid structure typically
used by accounting firms continue to exist as the use of automation expands? And how should
accountants be retooled at every level of public accounting firms to take advantage of the time
saved as a result of bots performing the repetitive, rule-based, and mundane tasks that they were
previously required to complete?
53

The expectation that digital workforce tools will be used at an accelerated pace within the
accounting industry also raises questions about the future of the profession. In particular, some
parties have raised concerns whether the profession will become obsolete. Future research is
needed to identify the specific roles within each professional service line that are most
susceptible to complete automation as well as how each line needs to evolve to protect itself
from complete automation. The technological changes in the accounting industry also lead to
questions regarding how students should be taught at universities to succeed in this new work
environment and how accounting programs should balance teaching the technical knowledge that
is still required with the technology and soft skills that our respondents emphasized new hirers
need to be successful. Finally, how will the need for computer programming knowledge as a
staff accountant impact the material covered on or format of the CPA exam?
As with all research, this paper is subject to certain limitations. The primary limitation of
this paper is that RPA technology is changing at such a quick rate, the firms have to adapt very
quickly. Thus, reported results may change as firms gain experience with RPAs. Second, the use
of RPAs is still in its infancy. Thus, statements about possible benefits and costs are still largely
conjecture. For example, the human resource costs and benefits may differ from what is reported
here as the firms scale RPA within their service lines. This is a particularly important area for
future research as the implications for the accounting workforce are potentially quite dramatic.
Third, we limited our investigation to the large accounting firms. We look forward to future
research that further expands our understanding of the impact of RPA on the public accounting
industry.
54

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58

TABLE 1
Demographic Data of Participants
Interview
Years of
Participant # Job Position Length
Experience
(minutes)
1 Assurance Senior Manager 12 28
2 Tax Director 14 22
4 Advisory Senior Manager 25 44
5 Advisory Partner 23 29
6 Assurance Partner 18 41
8 Tax Partner 31 67
10 Advisory Director 18 42
12 Tax Partner 20 24
13 Tax Director 17 41
59

TABLE 2
Automation Potential of Various Functions and Sub-Processes
Function Sub-process Automation Savings

potential (%) Potential
Order To Cash 1. Customer Master data Management 25-30% 40% - 60%
2. Credit Management 25-30%
3. Customer Service Support 25-30%
4. Account Receivables Management 25-30%
5. Incoming Payments 0-5%
6. Deductions and disputes management 25-30%
Human Resources 1. HR General Services 25-30% 60% - 80%
2. Expat Management 10-15%
Source to Pay 1. Source-to-Purchase 25-30% 50% - 70%
2. Purchase-to-Pay 25-30%
3. Projects Support 10-15%
Supply Chain 1. Supply Chain Planning 10-15% 10% - 15%
2. Transport Planning 10-15%
3. Supply Planning 10-15%
4. Project Management 10-15%
5. General Supply Chain Services 10-15%
General Accounting 1. Fixed Assets / FMM / Closing & Reporting 25-30% 10% - 15%
2. Local Tax Accounting 10-15%
Controlling 1. Product Costing 5-10% 15% - 20%
2. CO Operation/Reporting 10-15%
3. Business Controlling Support 5-10%
4. BI & Systems 10-15%
5. Group Financial Controlling 5-10%
Finance Other 1. Intercompany 25-30% 30% - 50%
2. Account and Bank Reconciliations 15-20%
3. Financial Planning & Analysis 25-50%
4. Tax 40-60%
Table shows one Big 4 firm’s estimates of the amount of processes that can be automated in each
sub-process of each function and the potential financial savings associated with the amount of
automation.
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Robotic Process Automation in Public Accounting

D. Kip Holderness, Jr.

Electronic copy available at: https://ssrn.com/abstract=3193222

Keywords: robotic process automation (RPA), automation, accounting efficiency, accounting

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the accounting profession.

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influences human-resource decisions such as hiring, training, and offshoring decisions.

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firms are just beginning to implement this technology.

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This study makes an important contribution in examining how RPA is unfolding in an

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VALUE OF DESCRIPTIVE RESEARCH

anatomy, archaeology, astronomy, embryology, morphology, paleontology, taxonomy, botany,

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struggle to accept descriptive research as a legitimate methodology—often requiring authors to

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understood generally by researchers. It is also valuable when gathering information would

We view using a descriptive methodology as appropriate in our setting because RPA is a

implementing RPA in the accounting workplace. We conducted semi-structured interviews with

future empirical research.

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key categories of information.6

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public accounting industry.7

software. Subsequently, we asked our prepared interview questions in a non-leading manner to

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In conducting the interviews, we guaranteed participants’ anonymity. Several participants

DEFINING RPA AND THE DEMAND FOR RPA IN PUBLIC ACCOUNTING

Technological advances are leading to the development of a spectrum of digital

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following quotes further explain the capabilities of this technology.

in the IT function) much greater ability to develop solutions.

Demand for RPA in Public Accounting

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internal operations were discussed by our participants:

employees to focus on activities that add more value to the firm.

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incorporating them in work performed for clients in the following way:

projects are illustrated in the following quote:

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RPA by tax and advisory clients with the following quotes:

Implementation of RPA in Public Accounting

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third-party software as follows:

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determine whether a possible use case is suitable for automation.

coding is performed by a combination of accountants and/or software programmers. Several

programmers to code bots is illustrated in the following quote:

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regulatory environment in which accountants operate. Additionally, an understanding of RPA

with better services. In particular, one participant stated:

benefits of RPA to their clients.

THE CURRENT USE OF RPA IN EACH PROFESSIONAL SERVICE PRACTICE

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are considered when determining whether to utilize a bot:

[We have] developed a standardized way that we look at automation… It is a process

determining the processes that should be automated.

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bot is not likely to exist:

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