Experts have predicted for years that the growth of artificial intelligence will transform the accounting industry. For some, it already has.
The technology is enabling certified public accountants, financial advisers and risk analysts to move beyond acting simply as number crunchers and data processors. And it’s freeing time for the fostering of relationships with clients.
Melissa Travis, CEO and president of the Rhode Island Society of Certified Public Accountants and vice chair of the Rhode Island Business Coalition, says many firms are using AI to streamline and automate repetitive and mundane tasks, such as mining financial records, predicting and identifying trends, and auditing large data sets.
“It’s incredible how fast this is happening. And what will be possible is very exciting. But we need to be careful. It’s important to address the guardrails,” she said.
A 2023 Thompson-Reuters report found close to two-thirds of firms were concerned about the risks of using AI such as the chatbot ChatGPT, the biggest worries being data security and privacy.
“You never want proprietary information ending up on the internet or in the wrong hands,” Travis said.
Still, 11% of firms nationally now use AI in some form, and 51% plan to within the next six to 12 months, according to the report. Companies have been investing heavily to keep up with the rush of innovation. A report by Moore Global and the Centre for Economics and Business Research found accountancy firms outspent other professional service companies four-fold to implement AI systems in the past year, averaging $1.6 million.
The “big four” accounting firms – Deloitte Touche Tohmatsu Ltd., PricewaterhouseCoopers International Ltd., Ernst & Young Global Ltd. and KPMG International Ltd. – have long been implementing AI into their practices, Travis says. In 2019, she joined a team led by KPMG that met with former Gov. Gina M. Raimondo to “discuss the possibilities of AI.”
“KPMG has been ahead of the curve for ages,” she said. “But overall, the industry is way behind.”
Travis notes how some financial institutions have banned employees from using technology such as ChatGPT, which she called short-sighted. “Don’t kid yourself,” Travis said. “Every employee uses this whether the company wants to admit it or not.”
There are other ironies at play. The accounting industry is still facing a worker shortage. But some would-be accountants entering university programs – and their parents – are skeptical there is long-term job security, afraid they will spend time and money to enter an industry being replaced by machine-learning computers.
“We are hearing from parents that they feel it will take jobs away. If anything, it will create more jobs,” Travis said. “It gives you more tools and makes much of the work easier to do. I remember when people thought the calculator would replace the CPA.”
Bonnie Kennedy, assistant chair of the Department of Business and Economics at Salve Regina University, researches how smaller and regional firms are using this technology and has witnessed how it is changing the higher education curriculum.
Automated software can identify trends in behavior and vastly improve the ability to flag risky transactions. Traditionally, firms would pull a smaller sample for analyses and say, well the rest are probably good,” Kennedy said.
Her students will be expected to understand and use an increasing number of high-tech tools and incorporate newer and complex software that will allow them “to work at a higher level.”
And just as AI has disrupted the private sector, it also shows the need to retain the humanities in education. Communication and critical reasoning will be more important than ever, Kennedy says.
“This is already baked into our models,” she said. “But you still need to learn how to think. You can’t lose the human touch. Which is why some smaller companies have been slower to adopt. There is a concern that less-experienced staff will just take the output and not think about it. AI is a guess. We should think positively about AI while understanding we need to have control over what we are doing.”
Facing criticism for moving too slow in adopting regulations, the federal government has moved recently to address the concern.
On Oct. 30, Raimondo, now the U.S. secretary of commerce, released a statement after President Joe Biden signed an executive order directing agencies to evaluate the risks of artificial intelligence systems “to ensure safety, security, and trust while promoting an innovative, competitive AI ecosystem that supports workers and protects consumers.”
But state lawmakers have been slower to craft legislation to build a framework around AI, according to Travis.
“That is the biggest challenge right now,” she said. “Nobody has addressed this.”
Lawmakers should be embracing this technology, too, she says, but they should remember to have a human double-check the language.
“You can write legislation using ChatGPT,” she said.
