Some people fear artificial intelligence or AI. They might envision situations depicted in various movies and some episodes of Black Mirror, where AIs have sentience and take over the world. But most of us actually use AI in our daily lives, like Netflix recommending shows to watch or Grab connecting us to nearby drivers. With the rapid development of AI, businesses must be able to adapt and leverage its benefits to stay relevant. Companies that have not adopted AI may face the risk of being replaced by others in the future.
Use of AI in accounting and auditing
So, how do we introduce AI into the fields of accounting and auditing? One of the main tasks of a Certified Public Accountant (CPA) is data entry. We spend a lot of time encoding financial data into accounting systems and creating audit reports. Using AI technologies such as Optical Character Recognition (OCR) and Robotic Process Automation, you can automate certain accounting and auditing processes, so you can focus on tasks that require professional judgment and deliver more business to your clients. provide insight into the above. Additionally, the use of automation helps address the labor shortages facing most businesses and accounting firms. One example is using OCR to automatically capture key details needed to prepare journals and audit reports simply by scanning or taking pictures of supporting documents. increase.
AI can also help CPAs perform better and more efficient audits and other duties for their clients. The use of AI, such as data analytics, can help CPAs better identify areas at higher risk of material misstatement. CPAs can therefore focus on these areas in conducting audits. Additionally, CPA can use AI to analyze entire populations of data, rather than just testing samples of data, thus reducing audit risk to a sufficiently low level to perform highly effective audits. can.
The use of AI in data analytics also enables companies and their auditors to anticipate potential problems and prepare solutions to those problems using predictive data analytics. The use of AI can help predict price trends and enable organizations to hedge to reduce the risk of price increases. The use of AI can also help identify internal control weaknesses that could lead to future fraud.
Confidentiality of information when using AI
Recently, OpenAI, creators of ChatGPT, were sued for stealing personal information to train AI models. We often hear stories of Facebook accounts being hacked and money stolen from online bank accounts. The use of technology is not without risk, and one of the major risks we face when using AI is the risk of security breaches. As part of our job, we are granted access to sensitive information.
When using AI in business, it is necessary to pay attention to the protection of confidential information. Before purchasing or using any third-party software, you should ensure that your information is secure and will not be compromised. For example, if you use OCR to automatically capture data from supporting documents, you should check whether that data will be stored and used by another organization.
If confidential customer information is leaked due to inappropriate use of AI in the performance of CPA duties, it will be extremely difficult to rebuild customer trust in the CPA profession.
Will AI replace CPA?
AI is a powerful tool that we can leverage, and while it may take over many of the tasks that CPAs do, it cannot replace them at this time. Professional judgment is a big part of an accountant’s role, but current AI technology lacks the ability to make such professional judgment. CPAs continue to need to interpret and explain information to their clients, provide valuable business and practical insights, understand and empathize with their clients’ needs.
Alger Tang is co-president of Acpapp Academy, partner of EJM and Associates, and faculty member of Chiang Kai-shek University. Views and opinions within the article are those of the author and do not represent the views or opinions of these institutions.
