Cloud Computing and the Paperless Office for CPAs

By Alex Vuchnich, CPA, CFE -

Cloud computing has slowly been gaining acceptance on the traditional desktop computing model over the past few years. Web based applications are nothing new but the idea of moving close to 100% of your applications to the web is likely a frightening concept for many of us. Cloud computing is an evolution of the application service provider model. In the cloud model, theoretically all applications and even the operating system can be offloaded to services provided over the Internet. Google Apps is well known as a cloud based business and productivity app and Windows Live Mesh is an example of one foray into a web-based desktop operating and file system. This computing model has many implications to how CPA firms will adopt this technology and how it will impact workflow. One possible benefit is the synergy that can be achieved between cloud computing and paperless office environments.
Many paperless office implementations provide for remote access to electronic content using remote desktop, Citrix, file synchronization and document checkout or various internet portals. This solution works well for many firms but still has the disadvantage of being tied to particular desktops or laptops depending on licensing requirements of the software being used. One change coming down the line that is being driven by the proliferation of cloud computing will be an increase in the number and types of Mobile Internet Devices. Many manufacturers have plans to announce these devices in the next 6-18 months and just as we saw an explosion in netbooks over the past year we will likely begin to see more and more manufacturers jump on board with their own devices. These devices will act as windows into the cloud and will provide more convenient points of access to electronic content without being tethered to desktops or tied to lengthy laptop boot up times. With advances in ultrathin display technology and the smaller processing and hardware requirements of cloud computing these devices may literally become the new “paper”.

There are several pitfalls that still must be overcome before this transition can really progress though. First this entire model is based on constant internet connectivity. Although this is a current reality with the wide spread availability of cellular broadband and a vast array of Wi-Fi access points available, the price points for these services are still a little steep for many business users. Secondly and maybe the biggest deterrent will be concerns over privacy and security of confidential data. Most hosting providers have far superior security at their facilities than individual CPA firms can obtain but the real concern is over the user controls in place at the firm itself. Weaknesses in the firm’s user controls could possible circumvent the physical and logical access controls in place at the hosting facility. Also even though data used in cloud computing is typically encrypted for transmission, it would seem that under many regulations and standards, this might be deemed a disclosure of client data. Finally, there are some applications that for any number of reasons may not be a good fit for the cloud computing model. It is quite likely that firms will need to have a mix of cloud and remote desktop to access all the applications they will need.

The transition to cloud computing is steadily moving forward but a complete transition is a long way off. Firms can begin understanding the transition by looking at the web-based applications they currently use. From there firms should start to develop a strategy on how they will address the issues above and create synergy with their existing workflows.

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by Alex Vuchnich, CPA, CFE - Alex Vuchnich is the developer of Controlzkit an internal controls anaylsis tool and shares his perspective on how audit and accounting theory, technology and professional ethics interrelate to create forward thinking profitable firms.

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