The Governmental Accounting Standards Board has placed more focus on utilizing technology to improve internal operations and research and help public accountants, Joel Black, the organization’s chairman, said this week. .
Prior to 2020, the organization “deferred maintenance” to new technologies, Black said during a discussion Monday at the American Institute of Certified Public Accountants’ Governmental and Not-for-profit Industry Conference in Dallas.
Since then, the organization has started using new technologies internally, including in its publishing system, website, and search function within its Governmental Accounting Research System, he said. The system provides local and state governments access to generally accepted accounting principles, according to its website.
The rapid evolution of technology will ultimately have the biggest impact on GASB’s standard setting, and impact how the organization functions internally and the things it works on, Black said.
As artificial intelligence tools improve at preparing GAAP reports, there could be an H&R Block or TurboTax-like program for creating government financial reports, especially for smaller, less complex governments, said Black. Such a program, for example, could scan invoices, make accrual entries,and convert cash basis ledgers into a GAAP report, he said.
Today, GASB is working on a project that would largely automate its research efforts, said Black. Currently, research is constrained and time-consuming as it's conducted manually, he said.
The organization is “pretty close” to completing a system that provides a structured relational database using certain information about a government that they provide, he said. The system would go through a government report found on a website, the taxonomy they provide and organize the data into the report, he said.
“We're going to have much better and faster research information for all the archival research we ever wanted to do,” said Black, “which used to be way harder and therefore limited the amount we could do and when we could do it.”
GASB is also challenged by the fact that it tries to be all things to different users of financial reports, said Black. Those in the municipal bond community or an investor, for example, are knowledgeable and sophisticated and want a lot of information that citizens and legislative officials reading the report may not need, he said.
“Because the report is, by nature, hard to accumulate and time-consuming, we kind of have to be all things to all people in one place,” said Black.
As reporting becomes more efficient due to technology, GASB, down the road could require governments to file two reports — one that’s simpler and another that’s more detailed, he said.
“We're not going to require that now, because now you're producing two reports when it's hard for governments to even produce one,” said Black. “But as it gets more efficient, I see things like that as being opportunities and places at least governmental accounting standards setting could go in the future.”
It’s going to be particularly important for the organization to convince local governments to utilize new technologies more, especially as they continue to operate with less and less funding as has been the case in recent years, said Black.
“We are always a little bit late to the party, it feels like in the government sector, to use technology,” said Black. “I think we've got to get more and more advanced to take some of that manual effort out of our process because we don't have the manual people to do the process.”
