AI to transform accountancy, ICAEW report warns
Accountants need to adapt to how artificial intelligence will change their profession
Artificial Intelligence will transform the accountancy profession, according to a new report from the ICAEW.
The industry body warns that, like it or not, accountancy will be changed by AI technology, and professionals need to understand how to adapt and gain the benefits of AI.
The report, Artificial Intelligence and the Future of Accountancy, notes that AI can help accountants to make better informed decisions and provide better advice, so accountants should work to better harness the power of AI and use it as a tool to complement their services.
In addition, in some instances, humans will need to understand that AI will be able to make better decisions than humans, such as in areas where AI can manage much larger sets of data than humans, detect complex patterns or weaker patterns in data sets. AI can also provide consistency in decision making.
Kirstin Gillon, ICAEW's IT Technical Manager said: "AI systems are already very powerful and they are improving quickly. They provide outputs that are extremely accurate and can replace - if not supersede - human efforts."
However, the report does not foresee wholesale replacement of humans by machines, stating that machine learning, whilst powerful, cannot yet replicate human intelligence and has significant limitations. Kirstin said: "Humans make decisions in two main ways - using intuition and reason - and both are important. Historically, AI development focussed on trying to replicate reason, but machine-learning based on rules, however sophisticated, will ultimately be defeated by the greater complexity of the real world. Recently developers have focussed on pattern-recognition instead, which allows greater flexibility. But it depends on data inputs, so it will always be limited by the data available. Volume and quality of data is critical, and there may be issues of availability or privacy.
"More significantly, decisions such machines make are really just mathematical projections. Not all problems can be solved this way. Other considerations, like ethics, will always be important."
ICAEW says that whilst the accounting profession is already adapting to this new technology, the profession needs to anticipate a paradigm shift. Kirstin said: "machines can already take over a lot of process and compliance work, for example, and they will start to offer insights, analysis and new services like fraud detection. This is good news for finance professionals, who will be able to focus on more valuable tasks like decision-making, problem solving, strategy development, and leadership. But it will require new roles and skills, and there will be institutional adjustments necessarily from regulators and standards setters.
"The message is: AI, like any other technology, can help add value, and will create opportunities. But finance professionals need to be agile and flexible to harness this potential."
Commenting on AI from a regional perspective, Michael Armstrong FCA, ICAEW Regional Director for the Middle East, Africa, and South Asia (MEASA): "The wave of change in the region will be similar to the global market but probably at a slower pace due to the maturity level of the industry. Financial professionals will have to work closely with AI experts and data scientists to create tailored intelligent algorithms and solutions that support Arabic language. Only those who are willing to innovate will be able to take advantage of the changing finance market."