TechnologyMan vs The Machine: AI in accountancy

Man vs The Machine: AI in accountancy

How will artificial intelligence change accountancy practice, and how is it likely to affect job security in the future?

Whether it’s Rosie the Robot serving as a live-in maid to the Jetsons, Skynet using terminators to start wars rather than ending them, or Dolores Abernathy regaining her memories and becoming self-aware in Westworld, the idea of robots serving humans or destroying them has been a reoccurring theme across generations of science fiction novels and films. But now, in the age of technology where Siri can manage your diary or Alexa can compose emails, we are getting closer to the worlds we used to only imagine.

But how close are we really? What is the likelihood that you might lose your job because a machine can now make the decisions you were once paid for? Will the continued introduction of AI into our working lives create evolving employment opportunities for humans? In the world of accountancy this is especially relevant, as more firms are adopting AI to do mundane administrative tasks, and increasingly venturing into the more complex duties as well.

But before we get into the application of AI in accountancy, let us first distinguish the different forms of AI, and what they are currently capable of.

AI: Strong vs Weak

AI is the simulation of human intelligence within machines, as they try to replicate human rationalisation and reasoning. Much of the sci-fi world revolves around the idea of strong AI, machines which have a level of intellect that is equivalent to (or far greater than) humans, being able to learn, communicate and even become self-aware. In comparison, the AIs of our reality are closer to weak A.I machines, only simulating human consciousness rather than having their own. An interesting thought experiment entitled The Chinese Room set out by philosopher John Searle helps to highlight the difference between the two types of AI.

Searle postulated that he was trapped in a locked room, with nothing but boxes full of Chinese characters, which he cannot understand, and a book of instructions, written in his native tongue. A Chinese speaker stands on the other side of the door and passes him a note in Chinese. He then follows the instructions in the book to write the correct corresponding response and passes the note back under the door. After a few notes are passed back and forth it appears, to the Chinese speaker outside the room, that they are communicating with someone who can also speak Chinese, despite the person trapped in the room having no understanding of the language and simply simulating this knowledge. This replicates the way in which a machine may simply be programmed to simulate a level of human intellect (weak AI) rather than having any real intelligence of its own.

The weak AI machines of today can automate time-consuming tasks and can analyse data significantly faster and more accurately than their human counterparts. Common examples of this include computers that play chess or, in more recent years, self-driving cars. But now these machines are becoming more common in the workplace, including a growing presence within accountancy practice.

How is AI being used in accountancy practice?

Earlier this year, several of the largest accountancy firms in the country received hefty fines from the Financial Reporting Council (FRC) for drastic malpractice with regard to audit. Several top firms were at the focus of this fiasco in addition to a number of corporations, including BT and Rolls-Royce.  In light of this, it is the audit sector that has seen the largest introduction of AI within accountancy practice. The idea behind this is that weak AI can assess large volumes of data and generate new insights into anomalies swifter and more efficiently than conventional auditors, saving large firms from further embarrassment in the future.

Another area within accountancy practice that has seen an increase in the use of AI to consolidate procedures is administration. Compliance and data categorisation is becoming increasingly automated. Machines are now able to organise data from the same source into different categories, and with the ability to learn from human input, they are becoming increasingly effective at making their own decisions.

But does this mean that auditors and those in administrative roles are likely to lose their jobs in the near future?

Will AI destroy jobs or create them? 

While there is a lot of hype surround the use of AI in accountancy with more firms taking steps to increase their use, it is unlikely that accountants – even auditors – will be out of a job anytime soon.  With large firms already starting to invest in AI technology, they are also preparing for how this will affect their staff and recruitment process. This has involved changing their in-house training to be more rigorous and detail orientated, as well as hiring new technophile auditors, with in-depth knowledge of data analytics and cybernetics, from large telecommunication companies and small tech start-ups. It is predicted that the rate of hiring might slow down at first, but it will pick up again as there will be a vast number of new machines to operate.

It is likely that most of the administration process will be the first sector to be introduced to largescale AI. However, it is these administrative tasks that often enable junior staff to learn the ropes and figure out how the business is run. As these seemingly mundane tasks disappear from the workload of new staff it is a worry that they will fail to have the core understanding that will enable them to be highly successful in their chosen field.

However, not all hope is lost. In fact, according to the FRC, it is more likely that firms hyperbolise how often they use AI within their business in order to appear more attractive to potential clientele. There are other factors that also inhibit the future of AI in accountancy practice, such as the sheer cost of such technology, and concerns over whether it will be able to keep up to date with changing regulations and provide a uniform manner of gathering data.

While the era of iRobot may be some time away, when we are faced with largescale automated systems doing much of the work for us, it seems we are likely to still have a place amongst the machines – most obviously in areas that require human interaction and a level of emotional understanding that machines are currently unable to provide.

AJ Chambers is the UK’s leading Public Practice employment consultancy.

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