What accountants need to know about the metaverse

What accountants need to know about the metaverse

See how this new environment could affect accountants and auditors.

Imagine being able to leap into the air and fly to an audit at your client’s office in the morning, then teleport to a business lunch on the other side of the country. When that was done, you would then cap the day off with a gondola ride through Venice in the evening.

It sounds like the stuff of science fiction, but it could become reality if the metaverse — a virtual world that’s been attracting big firms and budgets in recent months — continues to evolve the way many observers believe it will.

The metaverse is currently more theory than actuality, but experts believe that will change in the next few years as businesses establish more virtual storefronts to sell new products and services. Global banker Citigroup predicts the market value of the metaverse could be between $8 trillion and $13 trillion by 2030, while investment bank Goldman Sachs says that as much as 33 percent of global spending on digital transactions could ultimately be tied to the metaverse.

As businesses, including some accounting firms, begin shifting to this new environment, accountants and auditors should begin familiarising themselves with the technologies and processes that will underpin it. Doing so will help them — and their clients — adapt to the virtual metaverse economy.

The metaverse defined

“There is no agreed consensus about what the definition of metaverse is,” explained Garrett Wasny, a Vancouver-based digital skills advisor to accountants. “When you hear the word you automatically think of some Hollywood blockbuster like The Matrix and you imagine this immersive world and this alternate reality. That actually wouldn’t be too far off, because ultimately, that’s the end game.”

The metaverse will include different technologies that enable augmented and virtual reality, allowing users to interact with businesses and one another in virtual worlds. Metaverse participants could enjoy virtual concerts, play virtual games and attend virtual conferences without leaving their homes. They could also buy virtual digital items, virtual trips and even invest in virtual real estate.

It’s important to note the metaverse isn’t a single platform or technology. There are multiple virtual worlds, catering to different user needs. The list encompasses dozens of platforms including: Decentraland, a virtual reality space where users can create content and interact with one another; The Sandbox, a 3D, virtual-world game; Roblox, an online gaming and game-creation platform; and Fortnite, an online game that also hosts virtual concerts and shows.

Businesses have already made significant investments in bringing the metaverse to life. The best known example is Meta Platforms, formerly known as Facebook. As its name suggests, Meta is dedicated to building technologies that create immersive experiences and allow people to participate in a virtual world. Other technology companies with metaverse ambitions include Microsoft, Alphabet and Nvidia.

Plenty of non-technology companies are already dipping their toes into the metaverse. Nike built a space on Roblox where participants can meet one another, take part in promotions and engage with the Nike brand. Coca-Cola designed unique wearables that can be worn in the Decentraland virtual world. And luxury fashion house Balenciaga teamed up with Fortnite to offer a series of in-game outfits players could use to dress their virtual characters.

Early accounting entrants

Some accounting firms have already begun experimenting with the metaverse. Earlier this year, international advisory and accounting firm Prager Metis opened its metaverse virtual headquarters on the Decentraland platform. The company said the office will provide potential clients with the financial expertise needed to navigate the metaverse.

“The opening of a metaverse office reflects Prager Metis’s belief that the metaverse will be the future and technology will continue to influence the way the world operates,” said Glenn Friedman, CEO of Prager Metis. “Our new metaverse headquarters will serve as a bridge between traditional and digital and offer valuable real-world financial services to the metaverse.”

Similarly, professional services firm PwC Hong Kong recently purchased virtual land in The Sandbox.

“The metaverse offers new possibilities for organisations to create value through innovative business models, as well as introducing new ways to engage with their customers and communities,” said PwC Hong Kong Partner William Gee. “We will leverage our expertise to advise clients who wish to embrace the metaverse on the full range of challenges presented by this emerging global digital phenomenon.”

Recently, the U.S. and Canadian firms of KPMG launched a metaverse collaboration hub where employees, clients and communities will be able to connect and work together. The hub will include a virtual office where the digital avatars of clients and employees will be able to interact with one another. 

The two firms have also built dedicated teams to provide strategic and technical metaverse support to clients, including design, use cases for non-fungible tokens (NFTs), cryptoassets, community engagement and broader Web 3.0 integrations. 

The impact on accountants and auditors

The metaverse will mark a new era for accountants and auditors, just as the internet did, Wasny believes. It will allow people to do things virtually that they can’t do in real life — such as teleport and fly. But the virtual world will still rely on traditional business principles, he said.

“There will be some reality that will remain in the metaverse no matter what it looks like, and part of that will be the reality of business,” he explained. “The reality of accounting with debit and credit is not going away. So I think accountants will play a huge role in this new reality.”

Possessing some technical knowledge will be important for accountants and auditors working in the metaverse. They should have a basic understanding of how key metaverse technologies such as blockchain and non-fungible tokens (NFTs) work.

But they’ll also need good social skills to help sell their services to the entrepreneurs setting up shop in the metaverse, Wasny believes.

“The human side of accounting will become more important than ever,” he said. “Robotic process automation, artificial intelligence and machine learning are taking over some of the more manual tasks accountants have done in the past. This frees up accountants to be much more creative and forward-thinking than in the past.”

No matter what form the metaverse ultimately takes, there will be an important place for accountants and auditors in it, Wasny said.

“Accountants need to focus on what they do best, which is to apply the rigour, independence and objectivity that no other profession has,” he explained. “Certified Public Accountant — it’s all in the name. They have a higher calling to investors, to shareholders and to stakeholders.”