The evolving landscape of work is being reshaped by technological advancements, particularly artificial intelligence (AI), which has and will continue to revolutionize job roles, worker skill sets, and future career trajectories. In September, a panel of subject matter experts will explore the profound impact AI has already had on the accounting field, and discuss the anticipated transformation and preparation needed for the next two to five years. Dr. Jodie Lobana CPA, CA, CIA, CISA, an accomplished business professional and AI governance expert, shares invaluable insights into effectively navigating the AI wave within the realm of accounting. Additionally, she offers practical guidance on integrating AI into accounting firms while highlighting the potential associated risks.
AI is bringing transformative shifts to numerous industries, and the accounting profession is not exempt from this wave of change. Especially noteworthy are large language models (LLMs) like GPT-4, which have been steadily mastering tasks in the accounting domain that were once thought to be uniquely human. These models can swiftly generate journal entries from an organization’s data, compile financial statements, draft managerial reports, and even delve into financial planning and analysis. In a recent astonishing feat, AI even conquered the CPA exams with exemplary results (Eulerich et al., 2023). And now, with the increasing competence to process tax-related data, AI is on the cusp of authoring comprehensive tax returns.Navigating the AI wave: Ten essentials for modern accountants
With AI gradually seeping into accounting departments across organizations, there’s an anticipated decline in demand for junior accountants (Boritz & Stratopoulos, 2022). These organizations are shifting their focus towards recruiting individuals proficient in collaborating with AI to yield desired accounting results. To seamlessly transition into this new role of an AI-assisted accountant, professionals should consider the following:
- Start with experimentation: Begin by using LLMs for accounting tasks, starting with sample data. Get hands-on to truly understand how it works. Remember, the type of algorithm chosen matters. For example, GPT-4 is more accurate than GPT-3.5.
- Prompt engineering: At its core, prompt engineering is the technique of crafting specific questions or commands for AI models. To effectively engage with AI models, mastering this art is key. This empowers CPAs to craft precise prompts within LLMs, ensuring the needed information is extracted.
- Understanding AI basics: CPAs should have a foundational grasp of AI concepts to comprehend how models function. A deeper understanding allows them to provide input on potential improvements. Gaining this insight is possible without heavy math, as highlighted by McCarl et al. (2019).
- Python basics: While deep expertise isn’t required, a basic understanding of Python aids in reviewing and refining the code and addressing potential errors. This knowledge serves as a safeguard, preventing that uneasy feeling of running blind.
- Review competency: With the advancement of AI, particularly in generating polished initial drafts for various tasks, the role of humans is transitioning more towards oversight and validation. Therefore, sharpening one’s abilities to meticulously review and assess outputs from LLMs is paramount. Just as the mantra in real estate emphasizes “location, location, location,” when collaborating with LLMs the mantra should be “review, review, review.”
- Data governance: In the realm of AI, where data serves as the backbone, its integrity is paramount. When harnessing data to train or refine AI models, it’s imperative to validate its accuracy, relevance, and comprehensiveness. Moreover, adherence to current data-related regulations is non-negotiable, underpinning the need for data to be both robust and ethically sourced and handled.
- Regulatory acumen: Being informed of regulations is essential, as ignorance can lead to substantial fines and penalties. Staying updated with emerging regulations provides ample time to adapt and ensures compliance.
- Awareness of AI’s risks and ethics: It’s imperative for professionals to be attuned to both the immediate and the long-haul challenges posed by AI integrations. Beyond just operational concerns, a keen sense of the ethical dimensions tied to AI, as detailed further in this article, is crucial for responsible and informed usage.
- Team collaboration: AI is a team sport. No one person has all the AI-related skills. When CPAs are working with AI models, they must collaborate with data scientists, data engineers, subject matter experts, and management personnel of their internal organization as well as their clients.
- Redesign processes: Embracing AI necessitates a reimagining of traditional accounting methods. From month-end closes to budgeting and forecasting, processes must be reshaped to seamlessly integrate AI’s capabilities (Lobana, 2021), ensuring it becomes an essential cog in the accounting machinery.
Think AI is only for the big players? It’s time for a rethink! From large firms forging partnerships with tech leaders like Microsoft to agile medium-sized enterprises, AI is the new norm. But how can these firms tap into the power of AI? Here’s a straightforward breakdown:
- Access GPT through a web browser: Ideal for those taking their first AI steps.
- Access through an API: Suited for businesses with pre-existing tech personnel with required knowledge.
- Set up enterprise agreement with leading companies like OpenAI or Microsoft: For those seeking customized solutions.
- Craft a proprietary GPT using unique data: For entities aiming for a stronger control on their GPT inputs and outputs.
In essence, there’s a bespoke AI route for every firm, regardless of size. The next chapter of accounting is AI-driven, and professionals need to stay agile and informed.Risks tied to AI in accounting
When talking about AI’s integration into accounting, risk must also be addressed. The immediate concerns surround privacy and confidentiality, given the sensitive nature of financial data. There’s also the overarching question of accountability, potential biases, and the need for transparency in AI’s decision-making. Ethical considerations and human rights, too, play a pivotal role, to ensure AI respects and upholds these fundamental principles. Meanwhile, cybersecurity remains an ever-present challenge, as does upholding professional responsibility.
Long-term concerns are no less pressing. There’s a genuine worry about the potential skill erosion within the profession, and an over-reliance on AI could be a double-edged sword, leading to reduced human oversight and an increased risk of AI dominance.Conclusion
The incorporation of AI into accounting isn’t just a speculative future scenario; it’s happening here and now. AI’s capabilities range from handling rudimentary tasks to dissecting intricate financial statements. As this technology evolves, CPAs must arm themselves with the right skills and knowledge to navigate the evolving terrain. Ignoring AI is no longer an option. Strategic adaptation and lifelong learning are essential to maximizing AI’s advantages in their future.
For more information on the influence of AI on the accounting profession register to attend CPA Alberta’s The Future of CPA Careers in the World Of Artificial Intelligence, a live virtual event scheduled for September 13, 2023.
Acknowledgement: In a true testament to human-AI synergy, the initial draft was rooted in the AI-related insights and technical expertise of Dr. Jodie Lobana. Subsequently, she collaborated with GPT-4 to finesse the article’s language, ensuring optimal audience engagement.References
Boritz, J. E., & Stratopoulos, T. C. (2022, December). JIS Workshop on AI and the Accounting Profession: Views from Industry and Academia. In JIS Workshop on AI and the Accounting Profession: Views from Industry and Academia (December 6, 2022).
McCarl, R., Lobana, J., von Stackelberg, H., Schell, K., Leschchinskiy, B., Humaidan, D., & Singh, G. (2019). AI Without Math: Making AI and ML Comprehensible.
Lobana, J. (2021). The governance of AI-based information technologies within corporate environments (Doctoral dissertation).
Eulerich, M., Sanatizadeh, A., Vakilzadeh, H., & Wood, D. A. (2023). Can Artificial Intelligence Pass Accounting Certification Exams? ChatGPT: CPA, CMA, CIA, and EA?. ChatGPT: CPA, CMA, CIA, and EA.