As your accounting firm builds for the future, it’s likely facing four critical challenges:
- handling the increased risks that come from firm growth
- monitoring evolving risks
- choosing clients that align with your vision
- demonstrating to regulators your commitment to risk management
Your accounting firm can respond more quickly and effectively to these challenges with AI-powered accounting risk and compliance software. Below we look at how this software helps your firm address each of these concerns.
Handling the increased risks from firm growth
As your firm grows and your client base diversifies, it’s important that you have a standardized risk process across your enterprise to ensure all new business is viewed through the appropriate evaluation lens. This does not mean all new business is treated equally. Instead, it means your firm evaluates each new piece of business based upon the risk it poses to the firm. Regulators refer to this approach as being “risk based.”
For example, evaluating new tax work for an existing tax client likely presents a low-level risk to your firm. Looking at new consulting work for an existing attest client, on the other hand, would involve a high amount of risk and therefore demand a higher level of scrutiny before accepting.
Does your firm have the proper processes in place to distinguish between these types of evaluations, and then to apply the correct risk process based on that risk evaluation? Top firms are rightly asking themselves these questions.
Intapp Risk & Compliance software for accounting firms helps you create and implement these processes. Our purpose-built accounting risk management software streamlines due diligence and conflicts checks and assigns a risk score to each new client and engagement as part of your firm’s acceptance process.
The solution’s AI identifies the conflicts that pose the most critical issues for your firm and excludes those conflict hits that do not present actual conflicts. With this comprehensive evaluation, you’ll understand your potential client’s risk profile, align client and engagement selection with firm strategy, and ultimately be able to make business-acceptance decisions quickly and confidently.
Monitoring evolving risks
A client’s structure, ownership, and financial stability can change over time — and these changes can negatively impact the client’s profile and your firm’s evolving risk. Your firm must implement multiple measures to ensure you’re continually monitoring key risk metrics and alerting key players when these changes occur.
Intapp Risk & Compliance software includes the ability to track changes in many of these areas. For example, thanks to third-party data integrations, the software can provide notifications of changes to the corporate family tree, sanctions list considerations, and other critical changes with the client. This monitoring process is vital because a change in your client’s corporate family tree could create a conflict between that client and another existing client. Likewise, other material changes in your client’s risk profile could mean that the client no longer aligns with your firm’s business objectives.
The client changes you should monitor include not only changes to the client itself but also changes in how the client is using your firm. The longer your firm engages with a given client, the more likely that client will request services within other areas of the firm, which can cause red flags and lead to major risk factors for independence.
For instance, such an independence risk could arise if a current client of your firm’s consulting service line asks your firm to do attest/audit work. It’s imperative to capture these client interactions early on in a transparent way so that everyone involved understands the situation. Intapp Risk & Compliance software monitors and surfaces these types of client changes.
Choosing clients that align with your vision
Once you gain visibility into a potential client’s corporate makeup and other risk factors, you can then decide whether that client aligns with your firm’s business strategy. For example, if your potential client is shifting its focus to an industry in which your firm has decided to not do business, you may choose not to onboard the client since its industry isn’t aligned with your firm’s long-term direction.
Intapp Risk & Compliance software helps accounting risk and compliance teams make these decisions in two key ways. First, the platform integrates with the world’s largest third-party data providers to ingest corporate family tree data as well as proprietary and industry-recognized risk scores. These data help you gain insight into your clients’ credit history and inform your acceptance decisions. Second, you can configure the software to assign risk scores based on the metrics your firm deems important.
Demonstrating your commitment to risk management
As all accounting firm leaders know, regulators are continually drafting new regulations and advisory materials to ensure firms establish systems of quality management. Regulators value integrated, holistic approaches to risk management versus processes that are seen as perfunctory or “check-the-box” exercises.
Risk management processes play a critical role within a firm’s overall system of quality control — so much so that regulators of the accounting market have appropriately cited Acceptance and Independence as major components within a firm’s overall system of quality control. Intapp Risk & Compliance software provides the only holistic risk platform designed to meet firms’ risk management needs within their overall system of quality control.
In addition to calling for holistic systems, regulators require firm leadership to mandate quality management and make it a part of a firm’s culture. By investing in purpose-built accounting risk and compliance software like the Intapp Risk & Compliance solution as part of your quality management program, you’re sending a message throughout your firm — and to regulators — that you take systemic quality management seriously.
Managing risks in accounting with Intapp
In the accounting industry, new risks can emerge as client conditions change, financial ratings fluctuate, corporate trees grow, business terms shift, and global regulations evolve. In other words, new risks can arise every week.
Intapp Risk & Compliance software helps you monitor these changing conditions and manage the risks they present. Please contact us to learn more about how Intapp’s AI-powered software helps you chart a path to strategic growth.