By Hitendra R. Patil and Eli Fathi
You are already riding the AI wave to some extent because, most likely, your car has some AI built into it. You ride it to work. How about riding artificial intelligence at and in your work?
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In today’s economic environment, it’s not enough to offer services in the same way that it’s always been done and hope that business will thrive. Many accounting firms are embracing new technology, such as robotic process automation, cloud-based analytics and dashboards to offer a competitive edge but the industry has come to a crossroads. While these computer-assisted and rules-based tools are considered the norm, AI and machine learning solutions are driving the leading edge.
Rather than simple “rules-based accounting,” in which tools analyze and report on anticipated scenarios as developed by a human- or industry-accepted practice, AI-based solutions go beyond the rigid boxes of what we know to provide insights on what’s unknown. This could be reports on anomalous financial transactions that traditional audit sampling techniques likely never would expose, or it could be insights into risky behavior that fall outside the industry-accepted detection techniques that only cover anticipated scenarios.
In other words, AI-based solutions behave like human intuition except they operate on vast amounts of data without getting tired, not being prone to usual human errors or falling under the influence of a potentially malicious entity.
The question is, what are the practical applications of this technology for accountants? By understanding the implications of AI, we can better understand how it will help accountants transcend the outcomes and benefits that we help clients achieve so far.
AI Eliminates the Tedious, Labor-Intensive Work
In a 2017 KPMG survey report, “Audit 2025: The Future is Now,” nearly 80 percent of respondents said that “auditors should use bigger samples and more sophisticated technologies for data gathering and analysis in their day-to-day work.” They surveyed CFOs, chief audit officers, chief tax officers and audit committee members, who spoke about a common and contentious problem. While clients look for a broader scope in navigating risks, opportunities, regulations and increasing public scrutiny, the explosion in the amount and nature of data sources has surpassed the ability of people to work with them.
Thanks to artificial intelligence and the related technology of machine learning, it’s now possible to achieve these goals with rapid data gathering and 100 percent data analysis. From a business perspective, this allows professionals to focus on more value-added work and, equally important, keep job satisfaction high and attract fresh talent into firms.
Consider the trend of accounting firms finding themselves with managers and partners bearing the brunt of the legwork previously undertaken by junior staff. As colleges and universities experience a higher number of applicants and graduates in accounting degrees, many are eschewing working for firms that haven’t adopted the technologies they want to use, resulting in a gap in entry-level labor. With this lack of junior-level horsepower, managers are starting to dominate the demographics of the firm, spending more time on high-volume but lower-value work that affects both the quality of client services and profitability. AI offers opportunities to restore firms to an optimal staffing spread, attracting new talent with the latest technologies and relieving senior staff to focus on consultative, advisory and insight-driven roles to deliver more profitable value to clients.
AI Helps Enrich Value-Added Services
By allowing the machine to do the labor-intensive work, professionals are freed up to focus on the most valuable parts of engagements – the in-depth analysis, evidence gathering and reporting that clients (would rather) pay for.
In a recent $2.8 million fraud investigation case, Gursey Scheider LLP used an AI-based platform to process millions of transaction records and analyze the resultant data to provide insights and evidence to a consumer products manufacturing client. As the Association of Certified Fraud Examiners (ACFE) “Report to the Nations” estimates the potential global loss caused by fraud is approaching $4 trillion, AI will become a critical part of fraud mitigation efforts.
Gary Krausz, CPA, CFF and partner at Gursey Schneider, explained, “We were contacted to write an expert report on fraud they had discovered, and while we have the investigative expertise, there was no way any team could go through millions of transactions in any reasonable amount of time. AI gave us the ability to take very big things and make them small, as it takes all the data and knows how to put different thoughts together and infer relationships between items.”
As AI removes the laborious tasks of data ingestion and identifying samples, it frees up the human professionals to perform the deeper investigation and prepare the reports that are in context for the client. This offloading of the manual work means firms are better prepared to handle the growing explosion of data and increasing demands by clients for more scrutiny and diligence in reporting.
By reducing or eliminating the time-consuming and complex aspects of professional work, AI is poised to redefine the future of job tasks. Firms adopting AI will be better able to deliver value-added services and report on much larger data sets than ever before, with little change to service charges and upfront costs.
AI in accounting is neither the beginning nor the end. It is a faster, powerful, more reliable and more profitable means to get to a better outcome for accounting firms and their clients. Artificial intelligence only augments and supports human intelligence, in ways that were hitherto not economically feasible and practically possible.
Your journey to AI-augmented profitability and increased value delivery begins with AI awareness. Taking an experimental drive simply as a learning objective to begin with can get you quickly started with experiencing the benefits that AI gives.