“Without AI literacy, we’re all at risk.”
Click to subscribe anywhere: Apple, Google/Youtube, Spotify, iHeart, Deezer, Amazon Music and Audible, Player FM, Audacy, Gaana (India), Boomplay (Africa), or RSS.
Accounting ARC
With Liz Mason, Byron Patrick, and Donny Shimamoto
Center for Accounting Transformation
Artificial intelligence is revolutionizing accounting, automating everything from bookkeeping to tax preparation. But as AI advances, accountants must ask: Can we trust it?
In this Accounting ARC episode, Donny Shimamoto, CPA.CITP, CGMA; Byron Patrick, CPA.CITP, CGMA; and Liz Mason, CPA, explore the growing risks AI poses to the profession, including deepfake fraud, financial market manipulation, and the loss of data privacy.
MORE Accounting ARC: The Research Imperative: Why Data Drives Accounting Success | How Coaching Can Unlock Professional Success | Demystifying Accounting Governance | Top 10 Red Flags to Watch for in Accounting Offices | Jeremy Dubow: Private Equity as a Catalyst for Growth | Break the Burnout Cycle in Accounting | Accounting in Transition: 2024 Reflections & the Road Ahead | Ron Baker: Visions for the Accounting Profession | Angie Grissom: Next Gen Inspo for Accountants | Does Accounting Belong in STEM? | Rose Wang: Where Numbers Meet Strategy and Creativity | TikTok Fraud Exposes Gaps in Financial Literacy | How Accounting Pros Own the Stage in Public Speaking | Greg Kyte: Being a CPA Is Like Being the Marie Kondo of Numbers | Rachel Bashore: A Lawyer’s Case for Reinventing Accounting | Beyond the Basics in Ethics Education
Traditionally, software was designed and programmed by humans, making its logic transparent. Now, AI writes its own code, making its decisions harder to audit. As Patrick, CEO of VERIFYiQ and co-founder and educator for TB Academy, notes, “If we don’t know how AI arrives at conclusions, how can we verify its accuracy?”
Mason, CEO of High Rock Accounting, shares a chilling example: she created an AI-generated video avatar of herself for workplace updates. While useful, this same technology could be used to scam employees into approving fraudulent wire transfers while impersonating executives with startling accuracy.
“It’s no longer a Nigerian prince emailing you—it’s your boss, calling in their exact voice, asking you to wire money.”
Mason raises another concern: AI-powered misinformation could influence CFO decisions, leading to stock market crashes. If AI feeds executives biased or manipulated financial data, they may make unwarranted decisions—triggering panic selling or false optimism.
“It’s confirmation bias at scale. When AI feeds financial leaders misleading information, the stock market can collapse before we even realize what’s happening.”
SOC reports have long been used to vet financial software, but they fail to address the complexities of AI-driven decision-making. Patrick warns that many companies claim SOC compliance without full transparency, making it difficult for accountants to assess true security risks.
Shimamoto, founder and managing director of IntrapriseTechKnowlogies LLC and founder and inspiration architect for the Center for Accounting Transformation, agrees with Mason that true digital privacy may no longer exist. AI models are constantly analyzing user behavior, and even seemingly harmless data—such as social media activity—can be weaponized for influence and manipulation.
“If you’re seeing the same AI-curated news 7 times, your brain starts to believe it. That’s how AI can manipulate perceptions—without you even realizing it.”
Shimamoto reminds accountants that their role as risk managers has never been more important. CPAs must:
- Question data sources and analyze AI-driven outputs critically
- Push for more transparent AI regulations
- Educate themselves and their teams on AI risks
“If we don’t step up, who will?” Shimamoto concludes.
15 Key Takeaways
- AI now writes its own code, making its decision-making process difficult to audit and verify. This raises concerns for accountants who rely on transparency in financial reporting.
- Traditional risk management frameworks like SOC reports do not fully address AI’s capabilities or the cybersecurity threats it introduces.
- AI-generated voice and video deepfakes make it easier than ever to impersonate executives and trick employees into fraudulent transactions.
- AI models can analyze user behavior, interests, and biases at an unprecedented scale, raising concerns about how personal data is being used and manipulated.
- AI-driven content curation and predictive analytics can reinforce biases, potentially influencing financial markets, decision-making, and even political views.
- If CFOs and financial leaders base decisions on AI-influenced data, manipulated narratives could trigger economic downturns or stock market crashes.
- CPAs are in a unique position to provide oversight, ensure ethical AI use, and push for stronger regulatory frameworks.
- Understanding how AI works, its risks and its potential biases is critical for financial professionals, who must ensure they are using AI responsibly.
- With AI’s ability to generate fraudulent communications, businesses must implement new security measures, such as safe words and multi-step authentication, to protect against scams.
- AI tools are being banned in multiple countries due to security concerns, but international regulatory frameworks are still struggling to keep up.
- Just as auditors verify financial accuracy, accountants should apply their skepticism to AI-generated data and validate its integrity.
- Governments, corporations, or bad actors could use AI to control narratives, influence elections, or destabilize economies.
- With AI’s ability to analyze and track personal data at scale, true privacy may no longer be possible in the digital age.
- AI itself is a tool, but how it is used determines whether it creates value or risk. Proper governance and ethical considerations must be put in place.
- As AI evolves, accountants and business leaders must stay informed, adapt to new risks, and educate their teams on emerging threats.