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IFRS Technical Update
Artificial Intelligence in Accounting – Pros and Cons
It has been predicted by Forbes that "by 2020, accounting tasks including tax, payroll, audits and banking will be fully automated using AI-based technologies, which will disrupt the accounting industry in a way it never was for the last 500 years, bringing both huge opportunities and serious challenges."
This poses a significant change to the accounting industry and one that many are following with open minds. The use of artificial intelligence (AI) across many industries is growing at a rapid rate but adoption in the accounting arena is still very much in early development. Some employees have concerns that this may lead to job losses, but these fears were also front of mind as the industrial revolution raced forward over 200 years ago.
We take a look at the pros and cons for AI and what the future could potentially hold.
- As AI learns as it develops, the outputs from AI can be extremely accurate and can improve on human efforts as human error can be eliminated
- Several software providers are developing AI applications that can automate and streamline bookkeeping tasks
- Data can be processed at lightning speed, one at which humans cannot compete with. Complex decisions can be made that humans may overlook and without human bias
- AI can never replicate the intricate nature of human intelligence
- Professional accountants do so much more than simply keeping track of receipts they are consultants who advise on numerous areas such as tax planning, operations etc. AI will not be able to take over that function in the near future
- Accountants regularly operate across multiple countries and jurisdictions; AI algorithms are not capable yet of sorting out these complex interactions that operate cross border
What does the future hold?
AI is still in its infancy and it will take time for it to become commonplace. Small steps are starting to be made where it can be integrated to deal with tasks that are simple and repetitive.
Complicated regulations reign in the accountancy space and are always expanding; AI is not yet up to the task of being able to ensure these compliance requirements are met and all controls in place are sound.
Many are worried about the loss of jobs, however it has been suggested that although some jobs will disappear, new roles will emerge. Instead of replacing accountants, AI will allow accountants to focus on higher-level tasks that require human instinct and insight. AI will work alongside them to increase productivity.
By understanding the practical challenges and the skills required, accountants and machines can work together in harmony and increase efficiency and effectiveness. Although AI can perform complicated work, they are not able to make decisions based on a wider context, unless that data can be codified. Professional accountants are able to work with their client to present solutions and options in a manner that is understandable. At this present time, the human touch is still a valuable tool for the accountant.
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