The AI Revolution: Transforming Accountants’ Roles
Despite having an historical reputation as a relatively conservative profession, accounting has been steadily shifting to embrace technological advancements, the most relevant of which is artificial intelligence (AI).
Specific to the accounting industry, AI is used to automate repetitive, high-volume and time-consuming tasks traditionally performed by humans. These tasks include data entry, reconciliation, classification and analysis of financial transactions. Functions such as tax preparation automation and financial statement audit testing have also become targets of AI implementors. If implemented the right way, AI has the potential to significantly improve efficiency and reduce costs for the accounting industry while freeing up professionals’ time to focus on higher-level, value-added engagements.
The impact of machine learning on the steady evolution of AI cannot be overstated. As algorithms created to learn from provided data, the process of machine learning has enabled the automation of repetitive tasks that have historically taken up a great deal of an accountant’s billable time. With such processes in place, accounting firms are able to speed up decision-making processes while simultaneously lowering associated costs.
While the financial ability to invest in higher levels of machine learning is generally restricted to the major firms, smaller firms can use pre-built machine learning software to implement the same processes on a smaller scale. Machine learning will have a direct, positive impact on the future importance of advisory services. With time requirements within both auditing and tax compliance processes significantly reduced, advisory services has seen and will continue to see a significant rise.
How AI Can Help
While there may be an overarching concern about AI’s potential to replace or eliminate many human aspects of the accounting industry, it offers a more-intuitive approach to data analysis that can eliminate the impact of human error and provide accurate, precise and consistent results. The use of AI can also help companies comply with laws and regulations as it can recognize patterns and detect anomalies that suggest noncompliance. This will be seen most prominently within the audit industry in the overall reduction of fraud risk.
By automating compliance processes, AI helps accountants save valuable time and effort, prompting the exploration of new specialties. With lower-level tasks and processes now automated, job functions will change, and accountants will find ways to add higher levels of value in other practice areas. They will be able to focus on the human element, allowing them to stand out from their peers.
The Impact on Accounting Jobs
This is the big question people have when it comes to the development of AI within the accounting industry: What will happen to the jobs? One significant impact of AI on the accounting profession is the perception of inevitable job displacement. This notion has gained some steam over the last several years as the accounting profession has experienced the steady automation of previously manual, time-intensive tasks.
For example, before the emergence of AI, individual bookkeepers were relied upon to classify transactional information leading to the formulation of an organization’s books and records. They have also historically been counted on to reconcile individual accounts on a monthly basis. These processes are (and have been) time intensive, delaying an organization’s monthly close by days or even weeks. With AI and machine learning in place, these tasks have been automated, freeing up accountants and bookkeepers to focus on higher-value tasks. This technology has also been implemented in processes such as accounts receivable and payable, as well as the generation of routine financial reporting.
In the world of auditing, AI programs are currently being used to test audit samples. With the efficiency that AI creates in this process, auditors are able to test larger samples (if not 100%) of applicable transactional information. This allows them to focus on higher-risk audit areas, raising audit quality while simultaneously reducing audit-related costs.
Success in this evolving industry can and will be found by those professionals who are willing to buy in to developing AI technology in addition to being able to adapt and leverage the opportunities that will arise. With the understanding that current and future accountants will need to develop skills that go beyond those considered to be traditional accounting, early adopters of new technology such as AI will give accountants the ability to make themselves stand out, becoming an irreplaceable talent within the industry.
The Bottom Line: Should We Be Worried?
The short answer is “no.” Of course, the longer answer comes with a caveat. AI will inevitably continue to leave its mark on the accounting industry and its professionals in the coming years. The generation of precise, transparent financial data will be critical to both the integrity and reliability of financial reporting, and, with AI, it can be achieved consistently — creating a new purpose for roles within the profession.
It is only natural that current (and future) accountants are concerned about the establishment of AI within the accounting industry. However, it’s important for them to recognize that it is not necessarily a direct threat to their livelihood. It is an opportunity for them to evolve, improve, advance and differentiate.
Current and future AI tools, for the most part, will take over the “low-hanging fruit” — basic tasks and processes that do not require a human element. This will allow those accountants to focus on higher-level tasks that rely upon human expertise. With innovation comes change, and accounting professionals desiring to be at the forefront of this movement need to be willing to stay abreast of the latest AI advancements and work collaboratively with technology to stand out amongst their peers and establish themselves as true irreplaceable assets.