Taking over the world: Is AI coming for your job?

With the launches of Microsoft-backed ChatGPT and Google-owned Bard, the industry is awash with the buzz of AI. While some lament its dawn, arguing a loss of control, lack of regulation and threat to jobs, supporters rejoice in the innovation, potential and pure excitement of the AI age. So, should accountants be concerned? Matt Barton, technical manager at the Institute of Financial Accountants, writes

In the short and even mid term, it is unlikely that AI will have an impact on the finance functions of businesses, or on the role of the accountant.

It will definitely affect productivity and working practices, but this will be through AI-enhanced software programmes such as Microsoft 365, rather than a dedicated AI accountancy replacement.

Both Microsoft and Google are integrating their respective AI systems into their wider products, meaning initial adoption of these systems will be quite restricted. There is also a limit, currently, to what they can do strategically for businesses, particularly when it comes to financial reporting.

They certainly are not geared up to regulatory compliance currently. In the long term AI definitely offers potential for accountants, with scope for delivering expert analysis, identifying trends and patterns, and conducting risk-assessments, but in the short term, we are far from AI maturity. As a sector, we are not so much in the AI revolution, as the era of digitisation.

AI: the reality

As explored by the National Cyber Security Centre (NCSC) in its blog, ChatGPT and Bard are “large language models” (LLM) which means algorithms are trained using publicly available, text-based data.

This gives them the capability of producing human-like text by analysing the relationships between different words and creating a probability model. Users can then ask text-based prompts to output an appropriate answer.

Current publicly available iterations of AI all utilise this LLM, making them inappropriate for more complex, data-led analysis within business. As the NCSC also highlights, they still lack maturity, getting things wrong, “hallucinating” facts, demonstrating bias.

They are also gullible to leading questions, and require a huge amount of computing resource. This makes them unsuitable candidates for the realities of accountancy practice, making their threat to the profession very distant.

Digitisation: friend or foe?

Perhaps where accountants should focus their more immediate attention is digitisation. Where AI may in future handle much of the automation and trend watch for financial figures, digitisation refers to the process of adapting any system for use on computers and the internet. This is already having a very real effect on client services.

Apps and automation are cutting into the traditional roles of small accountants in practice. A potential client who wants a simple tax return submitted has options they did not have historically. They can get access to one of the many apps out there making self-assessment easier, or they can use a cut-price bookkeeping firm which typically relies on these apps to do the job for them. The standard small practice accountant is at risk of being pushed out of the market by these options, or otherwise being forced to adapt and become a cut-down, cut-price option themselves.

That said, while there is an inevitable risk posed by digitisation and change, in reality that is only for the accountant who does not embrace digitisation as an opportunity for differentiation. Ultimately, new technology means accountants can significantly boost productivity by spending less time on data entry and old-school bookkeeping and more on the services that make them a trusted business adviser.

Assuming comprehensive and effective use of the tools to maximise efficiency gains, accountants can use the time wisely to push margins, as well as developing new added value for their clients. This provides significant scope for differentiation from the competition.

The other important advantage of digitisation is the opportunity to better interrogate data. Digital systems are typically cloud-based, offering real-time insights into business performance. Accountants can embrace this newly accessible pool of data by offering client-focused services including data analysis, integrated reporting and flexible business modelling for example.

It is about becoming a genuine strategic partner to clients, not just doing their books and ensuring regulatory compliance, but helping drive the business forward.

Ultimately, what will always differentiate accountants from AI is their position as trusted advisers, offering the human touch. Becoming an indispensable strategic partner offers both short-term gain and long-term security. If accountants in practice do not make the most of the opportunities offered now by digitisation and later by AI, they will be overshadowed by the accountants who do. It is being left behind by the competition that presents the biggest threat.