Diving briefs:
- Accountants deploying generative artificial intelligence can upgrade the level of detail in their financial reporting by 12%, shifting 8.5% of time from routine, back-office processing to higher value tasks, reducing the time required to complete the monthly end by 7.5 days, the researchers said.
- By using generator AI, accountants can Spend more time on analytical workquality assurance and client communication, researchers at Massachusetts Institute of Technology Sloan School of Management and Stanford University Business School said in the survey.
- “On average, accountants using AI support 55% more clients per week compared to non-users, allowing them to broaden their client services,” the researcher said. “These accountants also record more billable times, indicating that AI can help convert previous unproductive hours into client-oriented work.”
Dive Insights:
Recent research shows that the last decade of advances in AI have improved accounting efficiency and accuracy, while machine learning has improved fraud detection, revenue forecasts, market trend forecasts and risk management forecasts.
At the same time, many companies use robotic process automation to streamline work-away tasks such as data entry and tuning, error reduction, and upgrade efficiency.
Beyond previous findings, MIT/Stanford's research “uniquely captures the complete perspective of how generative AI fundamentally transforms financial reporting and professional accounting practices,” says researchers Jung Ho Choi and Chloe Xie.
Researchers worked with accounting-focused AI software providers to analyze hundreds of thousands of transactions from 79 small businesses.
Choi and Xie also looked into 277 accountants, investigating how AI was adopted, and seeing the benefits and dangers of the technology.
When used as a collaborative tool by accountants, AI specifically complemented the professional judgment of the most seasoned accountants, Choi and Xie said.
“We see that more experienced accountants tend to use AI systems more strategically and enjoy greater performance improvements from there,” the researchers said.
Veteran accountants are skilled at interpreting AI metrics that measure the reliability of AI recommendations, and when scores are low, they tend to intervene more frequently than experienced colleagues, the researchers said.
“A experienced accountants can rely on AI even when they have low confidence.
“These dynamics suggest that AI will expand rather than replace human judgment,” they say, “the role of accountants remains crucial in overseeing AI and is essential to dealing with new or complex cases.”
The industry's view on AI is not completely clear. While most accountants acknowledge the value from AI that streamlines their work, there are 62% of voice concerns about potential errors and inaccuracies, the researchers said.
Overall, “generating AI can effectively enhance accounting tasks without chasing away the experts who perform it,” Choi and Xie said. Accounting firms employing technology can bring “significant improvements in productivity, task allocation, and reporting quality.”
