AI Solutions for CPA Firm Automation

A comprehensive AI-powered solution for automating finance, audit, and accounting tasks in CPA firm environments with enterprise-grade security controls.

🎯 Features

AI-Powered Automation

• Invoice Processing: Automatically extract and validate data from invoices using NLP and pattern recognition
• Expense Categorization: ML-powered expense classification with GL account suggestions
• Audit Trail Automation: Comprehensive audit logging with anomaly detection
• Financial Reconciliation: Fuzzy matching for bank and book transaction reconciliation
• Fraud Detection: Multi-layered anomaly detection including Benford's Law analysis

Security & Compliance

• Data Encryption: AES-256 encryption for sensitive financial data
• Access Control: Role-based permissions with JWT authentication
• Audit Logging: Comprehensive activity tracking for compliance
• Secure API: Rate-limited REST API with HTTPS support
• Input Sanitization: Protection against injection attacks
• Data Retention: Configurable retention policies for regulatory compliance

📋 Table of Contents

• Installation
• Configuration
• Usage
• API Documentation
• Security Best Practices
• Architecture
• Testing
• Contributing

🚀 Installation

Prerequisites

• Python 3.8 or higher
• pip package manager
• Virtual environment (recommended)

Step-by-Step Installation

1. Clone the repository

git clone https://github.com/HHR-CPA/vigilant-octo-engine.git
cd vigilant-octo-engine

2. Create and activate virtual environment

python -m venv venv
source venv/bin/activate  # On Windows: venv\Scripts\activate

3. Install dependencies

pip install -r requirements.txt

4. Configure environment variables

cp .env.example .env
# Edit .env with your configuration

5. Initialize secure storage directories

mkdir -p logs models secure_data
chmod 700 secure_data  # Restrict access on Unix systems

⚙️ Configuration

Environment Variables

Copy .env.example to .env and configure the following:

# Security Configuration
SECRET_KEY=your-secret-key-here-change-in-production
ENCRYPTION_KEY=your-encryption-key-here-change-in-production

# Database Configuration
DATABASE_URL=sqlite:///./cpa_finance.db

# Audit Logging
AUDIT_LOG_PATH=./logs/audit.log
AUDIT_LOG_RETENTION_DAYS=365

# API Configuration
API_HOST=0.0.0.0
API_PORT=8000
API_RATE_LIMIT=100/minute

⚠️ Important:

• Generate secure random keys for production
• Never commit .env to version control
• Use PostgreSQL for production environments
• Enable HTTPS with valid SSL certificates

📖 Usage

Starting the API Server

python src/api.py

The API will be available at http://localhost:8000

Using the AI Modules

Invoice Processing

from src.invoice_processing import InvoiceProcessor

processor = InvoiceProcessor()

invoice_text = """
ACME Corp
Invoice #INV-2024-001
Date: 01/15/2024
Total: $1,250.00
"""

invoice = processor.extract_invoice_data(invoice_text)
is_valid, errors = processor.validate_invoice(invoice)
category = processor.categorize_expense(invoice)

print(f"Category: {category}")
print(f"Valid: {is_valid}")

Expense Categorization

from src.expense_categorization import ExpenseCategorizer

categorizer = ExpenseCategorizer()

category, confidence = categorizer.categorize(
    description="Microsoft Office 365 Subscription",
    vendor="Microsoft",
    amount=150.00
)

gl_account = categorizer.suggest_gl_account(category)

print(f"Category: {category} (Confidence: {confidence:.2%})")
print(f"GL Account: {gl_account}")

Anomaly Detection

from src.anomaly_detection import AnomalyDetector
import pandas as pd

detector = AnomalyDetector()

transactions = pd.DataFrame({
    'amount': [100, 150, 120, 5000, 110],
    'vendor': ['A', 'B', 'A', 'C', 'B'],
    'date': ['2024-01-15', '2024-01-16', '2024-01-17', '2024-01-18', '2024-01-19']
})

results = detector.detect_transaction_anomalies(transactions)
anomalies = results[results['is_anomaly']]

print(f"Detected {len(anomalies)} anomalies")

Secure Data Handling

from src.security import EncryptionManager, AccessControl

# Encryption
encryption = EncryptionManager()
sensitive_data = {"account": "123456", "balance": 50000}
encrypted = encryption.encrypt_dict(sensitive_data)
decrypted = encryption.decrypt_dict(encrypted)

# Authentication
access_control = AccessControl()
token = access_control.create_access_token({"user": "john", "role": "accountant"})
user_data = access_control.verify_token(token)

🔌 API Documentation

Authentication

All API endpoints (except /api/health) require authentication using JWT tokens.

Login

curl -X POST http://localhost:8000/api/auth/login \
  -H "Content-Type: application/json" \
  -d '{"username": "demo", "password": "Demo123!"}'

Use Token

curl -X POST http://localhost:8000/api/invoice/process \
  -H "Authorization: Bearer YOUR_TOKEN" \
  -H "Content-Type: application/json" \
  -d '{"invoice_text": "..."}'

Main Endpoints

Endpoint	Method	Description	Auth Required
/api/auth/login	POST	Authenticate and get token	No
/api/invoice/process	POST	Process invoice	Yes
/api/expense/categorize	POST	Categorize expense	Yes
/api/audit/detect-anomalies	POST	Detect anomalies	Yes (Auditor)
/api/audit/generate-report	POST	Generate audit report	Yes (Auditor)
/api/reconcile/transactions	POST	Reconcile transactions	Yes
/api/health	GET	Health check	No

Full API documentation available at http://localhost:8000/docs when server is running.

🔒 Security Best Practices

For Production Deployment

1. Environment Security

   • Use strong, randomly generated keys
   • Store secrets in secure vault (e.g., AWS Secrets Manager, HashiCorp Vault)
   • Enable HTTPS with valid SSL certificates
   • Use PostgreSQL instead of SQLite

2. Access Control

   • Implement multi-factor authentication (MFA)
   • Use role-based access control (RBAC)
   • Regularly rotate API keys and tokens
   • Monitor failed authentication attempts

3. Data Protection

   • Encrypt data at rest and in transit
   • Implement data retention policies
   • Regular security audits
   • Secure file upload validation

4. Network Security

   • Use firewall rules to restrict access
   • Implement rate limiting
   • Enable CORS only for trusted domains
   • Use VPN or private network for sensitive operations

5. Audit & Compliance

   • Enable comprehensive audit logging
   • Regular review of audit logs
   • Maintain logs for required retention period
   • Implement automated alerting for suspicious activities

Recommended Tools & Libraries

Security & Encryption

• cryptography: Industry-standard encryption library
• python-jose: JWT implementation
• passlib: Password hashing with bcrypt

AI/ML for Finance

• scikit-learn: Machine learning algorithms
• pandas: Data manipulation and analysis
• numpy: Numerical computing

API & Web

• FastAPI: Modern, fast web framework
• uvicorn: ASGI server
• slowapi: Rate limiting

Audit & Logging

• python-json-logger: Structured logging
• SQLAlchemy: Database ORM with security features

Data Validation

• pydantic: Data validation using Python type annotations
• cerberus: Lightweight data validation

🏗️ Architecture

vigilant-octo-engine/
├── src/
│   ├── __init__.py
│   ├── api.py                      # REST API with security
│   ├── security.py                 # Encryption, access control
│   ├── audit_logging.py            # Audit trail management
│   ├── invoice_processing.py       # AI invoice automation
│   ├── expense_categorization.py   # ML expense categorization
│   └── anomaly_detection.py        # Fraud detection
├── tests/
│   ├── test_security.py
│   ├── test_invoice_processing.py
│   ├── test_expense_categorization.py
│   └── test_anomaly_detection.py
├── logs/                           # Audit logs
├── models/                         # AI models cache
├── secure_data/                    # Encrypted data storage
├── requirements.txt                # Dependencies
├── .env.example                    # Configuration template
└── README.md

🖥️ Frontend (React + Vite)

An accompanying frontend lives in frontend/ for interactive use of the secured API.

Development Setup

cd frontend
npm install
npm run dev

Served at http://localhost:5173 with proxying of /api/* to the backend (configured in vite.config.ts).

Key Frontend Files

• frontend/package.json – scripts (dev, build, test) and dependencies.
• frontend/src/types.ts – Typed interfaces mirroring backend responses.
• frontend/src/apiClient.ts – Thin fetch wrapper; always sends Content-Type: application/json and attaches JWT via Authorization header.
• frontend/src/AuthContext.tsx – In‑memory auth state (token not persisted to localStorage for security).
• frontend/src/ProtectedRoute.tsx – Redirects unauthenticated users to /login.
• Pages: Invoice, Expense, Anomaly, Audit, Dashboard, Login under frontend/src/pages/.
• Components: Reusable UI in frontend/src/components/ (Navbar, LoadingSpinner, ErrorBoundary).
• Hooks: frontend/src/hooks/ (useAuth, useApi, usePolling) abstract auth & polling logic.
• Services: Thin domain wrappers in frontend/src/services/ (e.g. invoiceService.ts).
• Utils: Formatting helpers in frontend/src/utils/ (formatCurrency, parseDate).
• Configuration: ESLint (.eslintrc.cjs), Prettier (.prettierrc), EditorConfig (.editorconfig) and env files (.env.development, .env.production).

Security Considerations

• Tokens are kept only in React state (avoid XSS/localStorage persistence).
• CORS updated to allow http://localhost:5173 for development only (see src/api.py).
• Do not add arbitrary origins—review before deployment.

Testing (Frontend)

Vitest + Testing Library for component and client tests:

npm run test

Example tests in frontend/src/__tests__/ validate API client request structure and protected routing. Additional test environment uses jsdom (configured in vite.config.ts).

Building

npm run build

Outputs production assets to frontend/dist/ (serve behind HTTPS; ensure secure headers).

Linting & Formatting

npm run lint     # ESLint (zero warnings policy for CI)
npm run type-check  # TypeScript compile check without emit
npm run format   # Prettier format all changed files

Environment Variables

Frontend uses Vite prefixed vars:

VITE_API_BASE_URL=http://localhost:8000/api   # dev
VITE_API_BASE_URL=/api                        # production (reverse proxy)
VITE_APP_ENV=development|production

Never expose secrets—only non-sensitive config belongs in Vite prefixed variables.

Recommended Hardening (Production)

• Enable HTTPS & HSTS at reverse proxy layer.
• Add Content Security Policy (CSP) disallowing inline scripts; move any inline styles to CSS.
• Use Subresource Integrity (SRI) for third‑party scripts (if any).
• Prefer ephemeral memory token storage (already implemented) and short JWT lifetimes with silent refresh.
• Implement backend rate limiting (already via slowapi) and enforce per‑origin CORS.

SharePoint / M365 Integration (Optional Roadmap)

If embedding in SharePoint, wrap built assets in SPFx web part or host as Teams tab:

• Acquire Azure AD token via MSAL and pass through to backend.
• Use Graph for user profile enrichment while keeping financial data strictly backend-bound.
• Store only minimal invoice metadata in SharePoint Lists; keep sensitive payloads encrypted server-side.

Folder Summary

frontend/
├── .eslintrc.cjs
├── .prettierrc
├── .editorconfig
├── .env.development
├── .env.production
├── package.json
├── vite.config.ts
├── src/
│   ├── apiClient.ts
│   ├── AuthContext.tsx
│   ├── components/
│   │   ├── Navbar.tsx
│   │   ├── LoadingSpinner.tsx
│   │   └── ErrorBoundary.tsx
│   ├── hooks/
│   │   ├── useAuth.ts
│   │   ├── useApi.ts
│   │   └── usePolling.ts
│   ├── services/
│   │   ├── invoiceService.ts
│   │   ├── expenseService.ts
│   │   ├── anomalyService.ts
│   │   ├── reconciliationService.ts
│   │   └── auditService.ts
│   ├── utils/
│   │   ├── formatCurrency.ts
│   │   └── parseDate.ts
│   ├── pages/
│   │   ├── Invoice.tsx
│   │   ├── Expense.tsx
│   │   ├── Anomaly.tsx
│   │   ├── Audit.tsx
│   │   ├── Dashboard.tsx
│   │   └── Login.tsx
│   ├── __tests__/
│   │   ├── apiClient.test.ts
│   │   ├── ProtectedRoute.test.tsx
│   │   └── services.test.ts
│   ├── types.ts
│   ├── ProtectedRoute.tsx
│   ├── setupTests.ts
│   ├── App.tsx
│   └── main.tsx
└── index.html

Extending

• Add new API endpoint: implement backend route, then create typed wrapper in apiClient.ts and interface in types.ts.
• Keep mappings 1:1 with backend response fields; prefer explicit interfaces over any.

---

🧪 Testing

Run all tests:

pytest tests/ -v

Run specific test file:

pytest tests/test_security.py -v

Run with coverage:

pytest tests/ --cov=src --cov-report=html

📊 Use Cases

1. Automated Invoice Processing

• Extract data from PDF/image invoices
• Validate invoice information
• Categorize expenses automatically
• Suggest GL accounts for posting

2. Expense Management

• Categorize expenses using AI
• Identify tax-deductible expenses
• Detect policy violations
• Generate spending reports

3. Audit & Compliance

• Detect duplicate transactions
• Identify unusual patterns
• Benford's Law analysis for fraud detection
• Comprehensive audit trail

4. Financial Reconciliation

• Match bank transactions with books
• Identify discrepancies
• Automated reconciliation suggestions
• Exception reporting

🤝 Contributing

We welcome contributions! Please follow these guidelines:

1. Fork the repository
2. Create a feature branch (git checkout -b feature/amazing-feature)
3. Commit your changes (git commit -m 'Add amazing feature')
4. Push to the branch (git push origin feature/amazing-feature)
5. Open a Pull Request

📝 License

This project is licensed under the Apache License 2.0 - see the LICENSE file for details.

⚠️ Disclaimer

This software is provided as-is for CPA firms to automate financial processes. Users are responsible for:

• Ensuring compliance with applicable regulations
• Implementing appropriate security measures
• Regular security audits and updates
• Data backup and disaster recovery
• Consulting with legal and compliance teams

📞 Support

For questions, issues, or feature requests:

• Open an issue on GitHub
• Contact: support@cpafirm.com
• Documentation: GitHub Wiki

🔄 Roadmap

• Integration with QuickBooks/Xero
• OCR for invoice scanning
• Advanced ML models (deep learning)
• Mobile app for expense submission
• Real-time anomaly alerts
• Multi-currency support
• Blockchain audit trail
• Automated tax form generation

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Built with ❤️ for CPA firms seeking to automate and secure their financial operations.