The proliferation of Al technologies combined with the current boom of cloud computing and the convergence of other new technologies are placing mounting pressure on the accounting profession to engage in one of the most significant transformations in its history. Some believe that Al will lead to the end of accountants. Others believe that Al will not replace accountants but augment their skills. Who is right?
In this chapter, we provide an overview of the impact of Al on the work of accountants.
We discuss the implications of adopting Al for current and future hiring of accounting professionals and new skills required to survive the upcoming transformation of the profession. From there, we examine its implications for educators and strategies to incorporate Al in the classroom to best prepare students for the new world of hyper-automation.
Finally, we conclude with our last thoughts and takeaways for the accounting profession.
Future of the Accounting Profession
Technology Changing the Landscape of the Accounting Profession
The accounting profession faces the most significant disruption of its existence since the emergence of computerized accounting in the 1960s. Al and new digital technologies (e.g., big data analytics, blockchain, internet of things, and related devices, such as sensors, drones, and virtual assistants) drive a digital revolution.
In the new digital world, business is moving smarter and faster than ever before. To stay relevant, the discipline of accounting must shift its focus from backward-looking measures of business performance to a more forward-looking approach. As we discussed in our recent article
(Alarcon & Ng, 2020), producing financial statements to becoming a strategic partner to the business represents a significant shift for the profession. The transformation includes becoming well-versed in designing and monitoring enterprise performance management (EPM) metrics and systems using the latest technology.
As we discussed in earlier chapters, several tasks traditionally performed by accountants, such as collecting, validating, reconciling, and reporting information, will become automated in the coming years with the generalization of Al and the continuous progress made with these technologies. These innovative technologies should free up considerable time for accountants and enable them to redeploy resources to accomplish this significant shift.
A similar shift is expected for auditors. In a recent white paper published by the Chartered Professional Accountants of Canada and the American Institute of Certified Public Accountants (CPA Canada & AICPA, 2020), the organizations explained that the increased adoption of Al means that auditors will spend less time gathering, correlating, formatting, and summarizing information. Instead, auditors will spend their time analyzing and evaluating the results or implications of the data. In other words, the auditor’s role will move toward providing more insight. They added, “It is important to see automation, analytics, and Al for what they are: enablers, the same as computers. They will not replace the auditor; rather, they will transform the audit and the auditor’s role” (p. 4).
Current research on the impact of Al on accounting jobs predicts that traditional accounting jobs will be destroyed, but new jobs will be created. Accounting systems are now able to connect directly with bank accounts and generate journal entries automatically. Manual tasks involving data entry and reconciliations, will be eliminated by leveraging Al and machine learning, combined with other technologies such as RPA. Besides, accountants and auditors currently spend a significant amount of their time collecting and reviewing information (contracts and other documents) to determine proper accounting entries or auditing accounting records. The automation of these tasks with Al-enabled RPA and document analysis tasks with text mining and natural language processing applications will enable accountants and auditors to turn to more value-added tasks.
Furthermore, as illustrated in our earlier case studies (Chapter 5), auditors will be able to increase the quality of their audits. Quality will improve with more accurate and timely results based on larger data sets and more sources of data than they were able to access and process using traditional audit methods. Additionally, auditors will perform continuous audits to streamline the audit process and provide more timely and predictive insights into the business.
Similarly, and as illustrated in our earlier case studies, Al is expected to change the role of tax accountants. Al will enable tax professionals to save time on low-value-added activities. Further, professionals can improve the quality of their services with more accurate and timelier assessments and spend more time in tax planning and advisory activities with their clients.
In addition to transforming accounting jobs as we know them, Al technologies will create new opportunities and new jobs for accountants. These include increased demand for accountants who can help design and maintain bots, algorithms, and other automation applications within the organization or service providers. The growing adoption of low-code/no-code Al platforms should also create new jobs for accountants in designing new systems in the future. Finally, as we discussed earlier, there will also be increased demand for accountants to review and audit Al systems and the internal controls around them. These system reviews will ensure compliance with accounting standards, ethics standards, laws, and regulations, including tax laws, laws related to security and privacy, industry-specific regulatory requirements, environmental laws, etc.
In summary, Al does not mean the end of accountants, but an evolution of their role. Accountants will move from being a producer of financial information to an enterprise performance advisory role, powered by Al.
As Paul Lin, Ph.D., and Tom Hazelbaker, CPA stated in their recent article (2019), “The modern technology-driven business approach drives accountants to evolve from information providers to business enhancers” (p. 51).