Artificial intelligence and the future of accountancy

Today, we are launching our report Artificial Intelligence and the Future of Accountancy. The report says technology is more powerful and the pace of change quicker than ever – and that AI has the capability to replace, if not supersede, humans in many areas. But I would argue there is more of a case for our reaction being ‘Don’t panic!’ than ‘We’re all doomed!’

There is understandable concern over the effect that emerging technology in general, and machine learning in particular, will have on the profession. It is highly likely that we will see some aspects of accountancy, like book-keeping and compliance, become almost entirely the preserve of computers. But, as our report says, we are a very long way from machines replacing humans.

Humans make decisions using two discrete styles of thinking – reason and intuition. Both are powerful, but very different. Intuition is flexible and fast, but liable to a number of biases and inconsistencies. So when developers first started to create machines that could ‘think’ like humans, they focussed on the rational side of decision-making, according to rules and logic. But they swiftly discovered that intuition, whilst flawed, is a vital component of how we perceive the world. In other words, no matter how complex your system of rules, the greater complexity of life will defeat it.

More recently, rather than this ‘top down’ system of artificial intelligence, developers started to focus on a ‘bottom up’ system, founded on pattern recognition and machine learning. These systems have been far more successful, and evidence from areas like medical diagnostics show that machines are capable of far more accurate results than humans. But there are drawbacks. Firstly, the system depends on data. What data are available – or, in an age of concern over privacy, made available – will have a profound effect on the ability of the machines to learn.

Secondly, it means the outcomes are only mathematical projections. There are other aspects of decision making that are just as important, like ethics, or deeper root cause analysis.

This is why I believe that artificial intelligence is not a terrifying threat to the profession – instead it should help chartered accountants to shift their focus away from data capture and processing onto areas where they can add more value, like decision-making, problem solving and strategy.

This will require adaptability. Some roles are likely to change, and there will be new skills to learn. There is likely to be a change in focus towards soft skills like communication, and critical thinking. It may even be that the qualification needs to change to reflect the new reality.

But this is hardly the first time the profession has encountered step-change in the form of technology. One can only imagine what ICAEW’s founders would have made of Microsoft Excel, for example. What is vital is that we remain agile and adaptable, and harness the power of new developments. No matter how the process changes, chartered accountants will still be in the business of delivering trust.

  • AI is a powerful, positive force. However, we will need to work out how the young accountants of the future will be trained and get experience when AI and automation is doing most of their traditional work.

  • AI is a powerful, positive force. However, we will need to work out how the young accountants of the future will be trained and get experience when AI and automation is doing most of their traditional work.

  • Viewing AI as an opportunity to change the way we work instead of fearing what it may take from us is definitely the best way to go in relation to this emerging technology. As a consumer of accounting services I would much rather my personal accountant spent her time thinking about and giving advice on how to arrange my finances than doing tasks that a computer can be programmed to, or can learn, to do. Similarly, in other fields of technology innovations that have taken out the grunt work by taking on more of the repetitive 'thinking' tasks have meant that those working in this field can focus on more user-centric issues like good design and user experience. It does seem that those who are first to see and seize the opportunities that AI will bring will be those who benefit most from it. Kind of like Brexit really.