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Bloomberg Advantage: Rizai on Transparency in Accounting
Matt Rizai, CEO of Workiva (NYSE:WK) is interviewed by Cory Johnson and Carol Massar on Bloomberg Advantage Radio. Rizai discusses the success companies have achieved by adopting cloud-based reporting solutions as well as how the SEC monitors the accuracy of reporting procedures.
Cory Johnson: Workiva, it is. It’s based in Ames Iowa, that technology center. It is a very interesting accounting software. Interesting because the way that audits are done in accounting is going through a significant change right now.
Matt Rizai: Yes, that’s true. Actually the whole notion of trying to deal with financial information for companies is becoming more and more important in order to make sure that there is a lot of transparency for the corporations to be able to make sense out of the numbers so they can make decisions. So with that, as you’re doing so many different things with so much data. As a matter of fact, businesses today experience their data doubling every 18-24 months, so with that, to be able to make sense and figure out that the proper numbers are being placed in the right places really creates quite a bit of a focus on making sure the accounting is being done correctly and focused on auditing and so forth. So it’s been a very dynamic market with the technology evolvement.
Carol Massar: Matt, who are your typical customers?
Matt Rizai: We have over 2,500 customers in every single industry that you can think of including over 65 percent of the Fortune 500 companies. We focus on being able to provide transparency to businesses as they look at and create their numbers and data to make sure that they can make sense, they can collaborate and they can create a lot more efficiency, and really to reduce a lot of their cost because they’ve been doing it by hand.
Carol Massarr: So the bulk of your customers are the bigger companies, or smaller?
Matt Rizai: We have probably 60% plus of our customers that are smaller than fortune 1000.
Carol Massar: Based on the business flow between small and mid-sized businesses, small being the backbone of our economy, I’m always curious to see whether or not you’re seeing more activity along that front which tells you that that businesses community is doing pretty well.
Matt Rizai: I think that one of the things that small to mid-sized companies are more apt to do is embrace technology because they can move quickly and their processes are not as cumbersome as opposed to large companies. So you do see quite a bit of activities with more dynamics in the mid-sized and smaller companies versus the big companies where technology is very important but it takes a while to adopt.
Cory Johnson: Really exciting reading is the PCAOB (Public Company Accounting Oversight Board) reports that they have about firms, and they will take a sample audit and look at them. I don’t think anyone ever looks at these reports, but sometimes, particularly with some of the smaller firms, they can be fascinating because some of the accounting practices are pretty crummy at some of these very small accountants. I wonder if the SEC is paying attention to theses things or the quality of audits and how that may have changed over time?
Matt Rizai: I think the SEC is, from my point of view, paying attention to all the details to make sure the markets are properly functioning and that proper information is coming into the picture. So I think from an SEC point of view, they pay a lot of attention to that regardless of whether they are a small or large company.
Cory Johnson: Paying attention to the audits themselves? Or are they paying attention to the numbers as reported, and not going as far as looking at the audits? Because the audits exist separately from the 10-k or any of the other information the company puts out.
Matt Rizai: True, I think they are paying more and more attention to that recently. I think that the whole notion of this technology started creating a lot more data and a lot more information. The other thing is that today the financial information is being prepared more quickly, more dynamically than it was because of technology. To be able to make sure that all the moving parts are being connected correctly and reported correctly, the SCC has to pay attention to make sure the market is as rational as possible as time goes on. Obviously they have to pay a lot of attention to big companies and I’m only assuming, since I don’t have a first-hand knowledge on that, but I’m assuming that they are making sure that the markets are as rational and perfect as possible.
Cory Johnson: Interesting stuff. Well Workiva, very interesting stuff from Matt Rizai Chief executive officer, glad to have you here, in from Iowa. For the latest information and news, visit The Workiva Press Page .