When you hear the word “AI,” you might well expect robots to take over your job, but according to the Institute of Financial Accountants (IFA), the future of accounting is clearly human. We reached out to IFA Technical Manager Matt Burton for some insight.
Matt, should we be afraid of AI?
In my opinion no. AI presents great opportunities for accountants and the industry, and the knowledgeable among us will upskill as quickly as possible. Personally, I suspect this fear comes from the sci-fi world. In science fiction, we’ve all read or seen stories about computers taking over as human creators. There is also a general fear of the unknown, which is understandable but must be approached critically. It’s a far cry from the accounting industry, or the robot rebellion in the real world, so it’s hard to imagine that’s something we should be afraid of. The opposite is actually true.
Will AI take our jobs?
It’s like science fiction, but not scary. AI is an incredibly diverse research field. There are many individual specialties and many different ways to streamline and improve work and job functions. When we think of autonomous robots and computer systems, we are actually thinking of a subdivision of AI called “neuromorphic.” This refers to AI with the ability to mimic the human brain. Theoretically, it can “learn” on input to provide agile responses and become autonomous from its author. This type of AI cannot actually run programs or provide repeatable functionality. AI is also a very complex and expensive field, and future applications will focus on the best interests, such as healthcare, rather than accounting. When people discuss their fear of job security, this neuromorphic AI is usually the kind of threat they envision. I wonder if that’s the reality we’ll see for most of our lifetimes, or if we’ll be a high priority area for neuromorphic AI.
At the other end of the spectrum is algorithmic AI, which focuses on AI that performs repeatable functions according to a set of well-established rules. We’re all familiar with algorithms, and they power everything from social media networks to search engines to GPS applications to suggestions for what to buy and what to watch. They all rely on predictive algorithms to make suggestions or present information based on previous interactions. It is this area of AI that will fundamentally impact the way we work, and for me, the more basic, repeatable functions are streamlined and there is more time to share and leverage core expertise. I’m excited about the industry prospects we’re getting. .
So what does the future of accounting look like?
There are two areas that will be, and are already being, impacted by AI. The first is what we do every day, what tools we use, and how we run our business. AI, or perhaps automation, would be more appropriate, but most commercial capabilities are becoming more prevalent. For example, Microsoft is one of his major investors in ChatGPT, so he’s adopted that feature into his Microsoft365 software. This will give you all sorts of new features like predictive suggestions for email replies, analysis and summaries of customer interactions, even scheduling tasks and transcribing meetings. Essentially, it automates and predicts some of the most repetitive and tedious tasks, freeing up time to focus on business and expertise rather than administrative tasks.
The second is an accounting-specific feature that works through popular cloud-based accounting software. These software already have the capabilities to perform and streamline many of the day-to-day accounting tasks such as data entry tasks and complex reporting. In fact, tax digitization and iXBRL filing are both driving much of the demand for this improved automation. For some, this can feel intimidating, but I see this as an unprecedented opportunity to respond with client-first practices that not only benefit your clients, but your own business. I feel that It also helps increase productivity, increase profit margins, and address skills shortages.
Another important benefit of digitization is the opportunity to better examine data. Digital systems are typically cloud-based and provide real-time insights into business performance that can be shared between accountants and clients. Accountants can take advantage of this recently accessible data pool by offering client-focused services such as data analysis, consolidated reporting, and flexible business modeling. It’s about being a true strategic partner to our clients, helping them drive their business, not just do the work.
Are there any disadvantages to AI?
absolutely. The biggest and only downside of AI is that it’s supposed to be infallible when in fact it’s error prone. Coming back to neuromorphic AI, many of us believe that AI can “think” as well as we can, but potentially “better”, or at least spot mistakes. You have a false expectation of being good at it. The reality is that AI is both the product of human thought and used by humans, and humans often take different approaches than algorithmic AI. As the National Cyber Security Center underscores in his recommendations on Large Language Models (LLMs) such as ChatGPT and Bard, they are arguably fallible. Because LLMs rely on the data they receive, they can get things wrong, can be “hallucinating” false facts, can be biased, can be gullible, and their responses can be irrelevant to the question being asked. Not only directly related, but the way the question is asked. From an applied point of view, this poses a serious limitation for current purposes, especially areas such as accounting, which require at least some black-and-white thinking. Moreover, these more futuristic applications require as much training for humans as for AI.
More: Chat GPT: UK Accountants Fight Over Hiring Schedule
Any final thoughts?
Another aspect that determines the adoption of AI in the accounting space is regulatory requirements. We are a compliance-focused department and due to our fiduciary duty, we cannot automatically switch to automated operations. Just as AI brings benefits in overcoming human and data errors, at least in the immediate must be met. For the hesitant among us, this is good news in that it slows down the pace of early adoption and gives us time to catch up.
In conclusion, I believe our future success will depend on our ability to innovate. These tools offer great opportunities, and the knowledgeable among us must implement continuous improvement practices to ensure they are trained, prepared, and have the latest technology to their advantage. are willing to use I’m excited too.
