Artificial intelligence (AI) has shown that it is far from just a buzzword. Over the years, AI in accounting has gained more and more strength and will continue to transform the accounting and tax profession in the future. Is your company ready?

Like many industries, the accounting profession is exploring how AI can improve efficiency and help tense companies serve customers better. Underlining this point, the most recent and AICPA PCPS CAS Comparative Survey found that 24 percent of CAS best practices are leveraging AI.

Furthermore, the “VSCPA Future of Work Survey 2022” found that the top five technologies respondents were looking to add in 2023, in order of importance, were:

  • Advanced cybersecurity measures (21 percent)
  • Workflow software (13 percent)
  • Robotic process automation (RPA) (10 percent)
  • Enterprise Resource Planning (ERP) (10 percent)

Within the profession, AI is a technology that generates excitement and curiosity, but also anxiety. How will AI shape the future of accounting? Will it replace CPAs? What are the challenges? This article seeks to address these questions and more.

How is artificial intelligence used in accounting?

AI in accounting is not new, but recent developments are marking seismic changes in the application of AI. We’ll take a closer look at some of these changes later, but first let’s explore some ways AI is currently being used in accounting.

One of the significant advantages of AI is its ability to identify patterns in large data sets in a way that no human can. This is one of the key reasons why AI plays an important role in auditing.

In audit, AI enables auditors to analyze large data sets and quickly identify anomalies and patterns. This means that auditors can step away from sampling and review all of a client’s transactions in real time. This translates into better results, as auditors can better identify risky transactions and provide higher quality audits to clients.

AI also plays an important role in tax investigation. Tax investigation can be challenging because there is simply too much information from too many sources. Sifting through the myriad online resources for answers is not only time-consuming and highly inefficient, but also creates a higher risk of errors and misinterpretations.

To address this issue, Thomson Reuters developed its AI-powered accounting and tax research platform. Control Point Edge®. It has the industry’s most sophisticated AI-powered algorithm built with larger sources of human-curated data and more diverse sets of features within its machine learning. This helps accountants find the best possible answers in the shortest amount of time based on natural language questions.

There is also an increase in electronic invoice automationin which key data is extracted from invoices to help automate invoice processing.

Domingo Huh, Lead UX Designer at Thomson Reuters Labs, commented: “When invoices are accurate, it becomes a source of truth. That gives us additional opportunities to take advantage of additional benefits.”

What are the challenges of AI in accounting?

AI is changing the way accounting professionals work and serve their clients. One of the biggest challenges can be access to customer data.

“When you don’t have access to that data, you become much more reactive and that limits the movement of typical accounting disciplines away from accounting to a more desirable advisory role,” Huh said.

Also, there are things that AI is not good for. For example, artificial intelligence struggles with:

  • Adapt to invisible/uncertain situations
  • Get semantic understanding of the text
  • Interpret nuanced language (eg, legal documents)
  • Provide clear and personalized guidance and advice.

In the future, expect to see increased demand for standards and specifications in the tax industry.

“Broadly speaking, I think the industry as a whole really sees the value in having this bridge for custom taxonomies and ontologies to map to a standard so that we can split and compare things much more effectively and logically,” Huh said. .

Will CPAs be replaced by AI?

One of the commonly cited questions involving AI is: will it replace CPAs? The short answer is no. AI is not designed to replace humans in the profession, rather it augments workflows and increases efficiency.

However, Huh acknowledges that some jobs may be lost, especially among those who don’t adapt or look for ways to elevate their work with the use of AI. This means focusing on higher value work instead of mundane and routine tasks.

“While the fears are arguably valid, I think we also know that we can go much further with that technology. And so there are different ways that we can look at the future,” Huh said. “In some ways AI will be an autonomous agent, but in others it will augment us beyond our current capabilities, and right now we are still scratching the surface of the possibilities.”

It is also important to note that there are abilities that cannot be replicated by the AIas Maintain and foster customer relationships.

How has the landscape of AI in accounting changed in the last six months?

Perhaps the most profound change in the AI ​​landscape in recent months is the rise of generative AI. generative AI is a subfield of artificial intelligence that focuses on creating content from scratch, such as text, music, images, or video.

In November 2022, Generative AI made headlines with the debut of ChatGPT, a next-generation chatbot developed by the OpenAI research lab.

as pointed out KPMG“ChatGPT attracted over a million users in just five days, making it one of the fastest adopted new technology platforms in history.”

Huh thinks the challenge for accountants is dealing with two different states. “One is in the past where we have all this legacy technology which was built in a certain era of AI, and now we’re entering a new era of artificial general intelligence (AGI) where you can actually communicate, have conversations, and do things autonomously. The bottom line is that we now have many more opportunities to help users streamline their tasks and get more done.”

How will AI shape the future of the accounting profession?

In the future, AI will enable accounting professionals to move from being reactive to being more proactive in serving clients. Clients expect and want more from their accountantand AI-powered solutions will enable accountants to better meet those expectations.

“[Accountants] they want to be able to start thinking in the theoretical space to do more modeling scenarios and come up with more subtle types of solutions for their clients,” Huh said.

Huh also believes that accountants will need to collaborate more with AI and hybrid teams.

“We’re going to see an increase in the number of interactions with AI, autonomous agents, and hybrid teams where it’s a mix of humans and their digital peers working collaboratively, so the whole picture of how we operate and how we collaborate is really gonna changeHuh said. “I think we’ve only just begun to scratch the surface in the last six months. I think in the next year or two, we’re going to see seismic changes.”

What are the benefits of implementing AI-powered tax software?

The future is here. AI has transformed and will continue to transform the tax and accounting landscape. Those companies that adopt the technology will be able to reap the benefits. AI-powered tax software It enables accountants to work smarter and faster, and more easily shift from a compliance foundation to higher value, strategic services.

Are you interested in knowing more about the state of AI in tax and accounting? Take a look at our free guide designed to help answer your questions.

To learn more about other issues in the accounting industry, read “Main accounting issues in 2023”.

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