Accountants are taking their first tentative steps into the Metaverse to find that, right now, there’s not much to do there. But over time, according to some professionals in the field, the Metaverse could evolve into something as impactful as the World Wide Web itself, meaning that establishing a presence now could pay great dividends in the future. How this will happen exactly remains an open question, but firm leaders planting their flag in this new digital world are confident there will soon be answers.
The term “Metaverse” comes from science fiction author Neil Stephenson in his 1992 book “Snowcrash,” which was then used by the CEO of Meta (no Facebook) Mark Zuckerberg last year to describe his view of where the Internet is headed. A precise definition — especially one with broad agreement — is hard to pin down, but it generally seems to describe an immersive virtual world and the places where it intersects with the physical one. Such an understanding encompasses a wide range of things, from online roleplaying games like World of Warcraft to simply video conferencing over Zoom, Teams or Meet.
What they seem to have in common is having a persistent or semi-persistent virtual “space” that is separate from the physical world. The Metaverse is actually composed of a growing number of such spaces or platforms, distinct from each other, all of which have different focuses, whether art, technology or just social interaction. Some of the biggest ones right now that are explicitly pitching themselves as Metaverse platforms include Decentraland, Illuvium, Sandbox, Axie Infinity and Cryptovoxels.
Regardless of the Metaverse’s precise nature, the business world has become very interested in it. a recent poll from Big Four firm PwC found that 67% of executives are actively engaged in Metaverse projects and a further 20% report they are “looking into it.” There seems to be a great deal of optimism around the Metaverse as well: The poll found 82% believe it will become “business as usual” either next year or within the next two to three years. This is despite the fact that, according to the poll, only about 9% of currently use any of the existing environments.
Top 50 Firm Prager Metis is counting on that 9% to grow over the years, which is why it is one of the few CPA firms to have already set up there. Chief Metaverse officer Jerry Eitel said that accountants in general go where the business is, hence his own firm’s presence. It is especially relevant for Prager Metis because, said Eitel, they specialize in the entertainment industry; since this industry has been particularly active in the Metaverse, it made sense for the firm to be there as well.
This is part of what he says is the long-term plan for the firm’s Metaverse presence, which is for its brand to be associated with the virtual world so that when tax issues inevitably start cropping up there, they will be the ones people think about . “There will be tax stuff throughout this Metaverse thing. We’ll say, ‘Come to us for your tax issues, we know tax, we know crypto.’ [These issues] will be there throughout all the stuff we do,” he said.
Another firm that has established a presence in the Metaverse is Big Four firm KPMG. National leader of enterprise innovation Cliff Justice made similar points, saying that the Metaverse eventually will create entirely new business models around the way products and services are delivered in the market, which in turn will necessitate new rules in response. Consequently, there will likely be a lot of people looking for a good accountant, and KPMG hopes they will turn to them.
Justice noted that, in the 1990s, not a lot of people really understood what the Internet was and how it could be used for serious business purposes. A CPA firm setting up a website back then may have been greeted with skepticism from peers, who might wonder why such a thing is necessary at all. But flash forward just a few years and there’s suddenly what he described as a “land grab” for favorable domain names to place a website, which suddenly became obligatory for a serious business. Justice said that the Metaverse is headed to a similar place.
“It’s very similar with [virtual] land in my view. We needed to secure a good place,” he said.
Both Prager Metis and KPMG entered the Metaverse in similar ways. They entered a Metaverse environment (in this case, both are in “Decentraland”) and went to a marketplace where users were buying and selling “plots” of “land” that could be developed in that area. Prices for this virtual property vary widely; some plots can be acquired for as little as $15,000; others can cost in the hundreds of thousands or even millions of dollars.
The process didn’t end with the purchase of land — indeed, at this stage it has only begun. The next step was hiring someone who could design and build their Metaverse spaces, the virtual buildings that sit on the virtual land. Eitel said his firm turned to a designer who goes by the username Tangpoko, who had extensive experience in designing Metaverse buildings.
Once a designer was engaged, Prager Metis transferred programming rights to Tangpoko, who then not only built the facility but filled it with things like non-fungible token paintings, virtual furniture, and other interior design. She also advised the firm generally on how to navigate the Metaverse. Eitel conceded there was more to this process than he at first thought.
Justice, whose firm spent a considerable amount of money setting up, said that, like web development, there is a certain “get what you pay for” quality to Metaverse spaces. This is why there is such a broad range of possible financial commitments. “You could just buy the land and build something very simple for very little money, and you see a lot of startups doing that. Or you could build a functioning facility with content that has avatars and access and you could bring people in and build on much like a website, the more functionality, the more content, the richer and deeper the website gets, the more resources it takes to build, which drives the cost,” he said.
To do… what, exactly?
Despite these efforts, things in the Metaverse are relatively quiet right now for accountants. Eitel said that Prager Metis, at the moment, is working on making connections within the community through hosting and sponsoring events. Most recently, he said, they held a fashion show where they ran an ad for their services. He said they also used their own experience setting up in the Metaverse to help Absolut Vodka establish a presence as well.
Eitel said cultural events like the fashion show represent the immediate short-term goals of their space. He said the firm plans to host a monthly “Prager Metis Presents in the Metaverse” where they will showcase artists, musicians and other creative professionals, and added that they may possibly have fireside chats as well.
KPMG’s Justice said he views the Metaverse as a place for client collaboration, saying there are things that can be done in virtual reality that are impossible in the physical world. He said his firm already has demos where they can develop conceptual supply chains, conceptual factory models, conceptual hospital rooms and more. He believes that the Metaverse, as it matures, can dramatically improve these services.
“You can visualize that, bring customers into that, without having to build an actual physical room to demonstrate those types of things and collaborate,” he said.
He also sees potential for recruitment and training, especially for tech-savvy younger accountants. He said this latest generation of accountants are already familiar with building virtual worlds in things like Roblox, and as the Metaverse improves, these will be the professionals who will truly understand the space. For the future, Justice envisioned the firm one day advertising jobs, recruiting talent, and training people in an immersive and possibly gamified way that he hopes could be “more fun than just the regular type program that’s been around for 25 years.” “There are exciting opportunities, and if you talk to the younger generation coming in, there’s a digital divide … . Though my generation was the first to grow up with technology, the younger generation sees it in an entirely different fashion. They ask, ‘ why aren’t we building more businesses in this more immersive [way]?'” he said.
While there is much talk about what firms will do inside the Metaverse, professionals don’t necessarily have to be in it to generate business from it. Peter Camuso, who leads Camuso CPAs, noted that while his firm specializes in matters relating to the Metaverse (alongside blockchain and cryptocurrencies), it does not itself have a presence there. This does not mean, however, that they cannot provide value to their clients in this area.
He noted that about 90% of his clients are in the crypto, blockchain and NFT space, all at different levels of development. Due to the significant overlaps of interest in these areas, many of these people are already interested in, or directly involved with, the Metaverse and need guidance for this as much as they would for other matters. He pointed out that, as young as the Metaverse may be, significant transactions are already taking place there.
“All these new transactions are taking place, and that is where everyone participating in this needs leadership from the tax and accounting industry to help them get into compliance … . Just aggregating this data and dealing with the overall volume of transactions taking place right now becomes very burdensome and on top of that it’s such a new space, and taxes are overall complex, so most people don’t understand the nature of the transactions they participate in that regard,” he said. “So in some regard I’d say we’re already working in the Metaverse. Anyone transacting online, whether cryptos or NFTs, already have very large tax and accounting needs.”