In this report, JULIANA AJAYI looks at the significance of Artificial Intelligence and technology in the Accounting profession
Over the years, accounting has moved from summarising, analysing, interpreting and recording financial statements for its users to an advanced but simple approach involving Artificial Intelligence and technology.
The significance of AI and tech to the accounting profession is yet another phase to watch out for.
According to the Institute of Chartered Accountants in England and Wales, in the coming decades, intelligent systems will take over more and more decision-making tasks from humans.
The ICAEW says 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 re-imagine and radically improve the quality of business and investment decisions, which is the ultimate purpose of the profession.
While this may seem a threatening situation for some, the accounting profession needs to focus on the fundamental business problems it aims to solve, and imagine how new technologies can transform its approach to them.
Deploying AI capabilities
Highlighting AI and the future of accounting, the ICAEW report explains how accountants are using AI capabilities. Acknowledging that machine learning in business and accounting is still at the early stage, a call for deep understanding of how AI can solve accounting and business problems was made to develop a positive vision of the future.
Having said that, it is important to note that AI systems do not replicate human intelligence. They are powerful and improving at a fast pace, providing outputs that are extremely accurate, which sometimes supersede human efforts.
The aim of accountants is to help organisations and economies work positively by giving out financial and professional advice, which, in the long run, helps people to make good decisions about the allocation of resources and hold others to account for their decisions.
To achieve these objectives, the power of new technologies must first be recognised and exploited effectively. And for this to happen, the ICAEW report states that debates, interaction and learning between tech experts, business and the profession to re-imagine the way fundamental business problems, with the help of new technologies, are solved, must be encouraged.
Accountants, as expert decision-makers, use both ways of thinking, applying knowledge to specific situations to make informed decisions, as well as intuitive decisions based on extensive experience in their field.
Tech and accounting problems
Accounting problems can range from tax filing, financial statements, bank reconciliation and stocks to other financial aspects. However, accountants apply their technical knowledge in accounting and finance to help businesses and stakeholders make better decisions.
To support their decision-making and advice, accountants need high quality financial and non-financial information and analysis.
Accountants have deployed tech for many years to help provide better advice and make informed decisions. In embracing tech, some of the accounting problems can be solved.
Tech can help accountants provide better and cheaper data to support decision-making, generate new insights from the analysis of data and free up time to focus on more valuable tasks, including problem solving, advising and strategy development.
Machine learning techniques provide substantial improvements across all areas of accounting and can equip accountants with powerful new capabilities, as well as automate many tasks and decisions.
The ICAEW says it is important to identify accounting and business problems where machine learning is likely to be particularly fruitful and where problems may be less suitable for these techniques. This will ensure that adoption efforts are driven by business need, rather than mere tech capabilities.
It noted that, to date, there had been limited use in real world accounting, but early research and implementation (project include using machine learning to code accounting entries and improve on the accuracy of rules-based approaches, enabling greater automation of processes).
In addition, it has improved fraud detection through more sophisticated, machine learning models of ‘normal’ activities and better prediction of fraudulent activities.
Though challenges could vary based on standards applied in different countries, data volumes and quality are important and crucial to AI systems. This means that without good data models, they will not be able to learn.
“Transactional accounting data is well-structured and high quality, and therefore should be a promising starting point for developing models,” says ICAEW.
Impact and prediction
Speaking on the impact of tech in the accounting profession, Ovie Ogidiaka, a chartered accountant and doctoral candidate at the Nigeria Defence Academy, Kaduna, said: “The impact of technology on the accounting profession has been magnificent. Gone are the days when files were arranged in companies; nowadays, it is a must for a company to store information in the cloud. Importantly, preparation of financial statements, reporting and analysis of accounting information have been made easy and possible by technology.
“The future is AI where robots will man the affairs of many companies. Though this will lead to efficiency and higher productivity, on the contrary, it will lead to loss of jobs because of redundancy.”
Okorie Maxwell, another chartered accountant in Nigeria, explained his predictions for the future as well as the impact of tech on accounting.
He noted that accuracy in preparing and presenting financial statements had been enhanced through technology.
His words, “Technology is impacting accounting practices by the use of computerised systems by companies in tracking and keeping financial records with softwares like Sage, QuickBooks, Tally among others, each with various versions that can be used to fit different companies’ accounting systems.
“It has also shortened the time taken to prepare statements, as it can be accessed from the various accounting softwares. Not only that, technology has also helped in improving accuracy in financial reports; meaning that errors have reduced drastically over time. This has helped business owners to avoid tax penalties and other issues that may reduce the income of a business or them being seen as violators of the law.
“Technology has enhanced efficient payroll management in reducing the uncertainty of staff as regards their net pay. As a matter of fact, there has been a surge in companies that specialise in payroll like Bento among others.”
According to Okorie, tech has helped the accounting profession in many ways, including diversifying the role of accountants, reducing waste and making records easily accessible.
He added, “Technology has helped in diversifying the role of an accountant, as they can analyse data with ease to aid better business decisions and strategic plans for clients. Now, most companies file their documents using cloud-based technology. That has helped in reducing waste in the form of papers and creating space in companies’ buildings. It has also improved easy access to records, as one does not have to be in the office to work.
“Concerning the future, every accountant will be involved in massive continuous learning; the profession will be broadened, there will be frequent changes in the financial framework as regards reporting standards, auditing standards and a whole lot of improvement on electronic filing of tax matters.
“The International Financial Reporting Standards would also be introduced into secondary schools’ accounting syllabus.”
