Artificial intelligence (AI) and the future of accountancy

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By CPA Charles Ndyabahika, Senior Principal Auditor,

Bank of Uganda

You have probably heard of Sofia, the humanoid. Many would have had the opportunity to meet her at the 2nd Africa Blockchain Conference held in Kampala recently but recent Ebola reports scared her handlers into cancelling their appearance. Eventually, they settled for a video conference, leaving many attendees disappointed.

Sophia is a big deal. She is the epitome of Artificial Intelligence (AI) that is increasingly playing a key role in our lives today and will become increasingly important in the future.

In basic terms, AI technology is intelligent machines that are able to complete repetitive, routine tasks at a fraction of the time it takes humans and with greater accuracy. This now allows AI platforms to observe, analyze and self-learn data and processes to improve its performance and accuracy over time.

AI – Long-Term Vision

In the coming decades, intelligent systems will take over more and more decision-making tasks from humans. This being driven by the fact that decision making is becoming more and more Data based as opposed to subjectivity and emotion.  While accountants have been using technology for many years to improve what they do and deliver more value to businesses, this is an opportunity to reimagine and radically improve the quality of business and investment decisions – which is the ultimate purpose of the accounting profession.

AI Technology

Artificial intelligence (AI) systems can be very powerful and are improving quickly. They provide outputs that can be extremely accurate, replacing and, in some cases, far superseding human efforts. However, they do not replicate human intelligence. We need to recognize the strengths and limits of this different form of intelligence, and build understanding of the best ways for humans and computers to work together.

AI and accountancy

Although AI techniques such as machine learning are not new, and the pace of change is fast, widespread adoption in business and accounting is still in early stages. In order to build a positive vision of the future, we need to develop a deep understanding of how AI can solve accounting and business problems, the practical challenges and the skills accountants need to work alongside intelligent systems.

Focus on Purpose

Accountants want to help organisations and economies work better by giving good advice and making good decisions. After all, accounting is not an end in itself. All the activities associated with accounting ultimately aim to help people make good decisions about the allocation of resources, and hold others to account for their decisions.

Exploiting Powerful Technologies

Other areas of technology will interact with AI and have a significant impact on business in the future, like blockchain or quantum computing. In addition, the pace of change in capabilities can be very fast, and the nature of learning-based and data-driven systems enable continual improvement.

Thinking Radically

In doing this, the accounting profession also needs to be open to more profound change and avoid just defending or incrementally improving the status quo. Where AI enables greater insight from data, it helps human experts make better decisions and provide better advice.

Be Adaptable

It is impossible to predict the extent to which computers will replace human decision-making over the next 20 to 30 years. There is a much broader context and the long-term future of accountancy will ultimately reflect how we, as humans, see and shape our relationship with powerful systems.

Roles and Skills

Accounting roles are already changing in response to new capabilities in data analytics. Indeed, accountants are well placed to work effectively with data analytics, as they combine high levels of numeracy with strong business awareness. Some roles will continue to emphasise technical accounting expertise and human judgement to deal with difficult and new cases.

Institutional Issues

Accounting has a wider institutional context, and regulators and standard setters also need to build their understanding of the application of AI and be comfortable with any associated risks. Without this institutional support, it is not possible to achieve change in areas such as audit or financial reporting.

Why Accountants Need To Embrace Artificial Intelligence

There is a high potential for AI to provide augmented analyses to auditors. Note that I did not say that it would replace auditors – AI is just another tool in the auditor’s belt of Computer Assisted Auditing Tools and Techniques (CAATTs). Instead of sampling data, auditors can push an entity’s entire ledger through automated analysis.

AI Implications for Management Accountants

The implications of AI for management accountants and other professional accountants working in business and government is even greater than it is for auditors. In addition to AI being applied within finance, it may also be applied in other parts of the organization and management accountants must ensure that there are proper governance and internal controls applied to machine learning throughout the organization.

Is Artificial Intelligence Set To Replace Accountants In The Future?

This AI revolution is not expected to slow down anytime soon. In fact, experts anticipate that as many as 800 million jobs could be replaced with AI technology by the year 2030. Initially, AI technology and automation in the workplace seemed to only affect pink and blue-collar workers. As this technology advances and becomes more powerful, professional, white-collar workers, including accountants, are starting to worry about what the future holds for their career and if AI will make their job obsolete.

AI in Accounting

AI technology is already able to handle many accounting functions, such as tax preparation, payroll, and audits. Many of the leading accounting software providers, including Xero, Intuit and Sage have incorporated AI technology into their software to handle basic accounting tasks, such as bank reconciliations, invoice categorization, risk assessment, and audit processes, like expense submissions and invoice payments. Many of the traditional bookkeeping tasks such as Accounts payable and receivable are already being performed by AI. AI handles much of the work involved in initiating payments and matching purchase orders. The Automated data entry and categorization done by AI can help accountants more quickly analyze broad financial trends.

AI Will transform not Replace Accountants

While there is no doubt that AI technology is capable of handling many standard accounting tasks faster and more efficiently or that these capabilities will only increase over time, it does not mean the end for accountants. There always will be a need for that human element – human intelligence – at the other end of AI technology. In fact, AI is set to create more jobs than it will replace, leaving workers, including accountants with options.

Preparing for the Future

There is no way to escape the use of AI technology, at least not if you hope to remain competitive in the upcoming years. Accountants will have to leave behind long-held traditions. The speed, efficiency and accuracy of AI technology just cannot be beaten. The only thing accountants can do is to embrace this new technology and learn how to maximize its use. The better equipped you are to help your clients integrate and utilize AI technology in their accounting processes, the more valuable you will be. An Accountant’s role as an advisor is much more important than the role of a super computer.  This can allow accountants to spend more time in business-management roles strengthening client relationships and supporting the business strategy.

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