Artificial intelligence (AI) can transform the business landscape for accountants and auditors. Given the fast-paced technological advancements in data mining; machine learning, which in turn fuels generative AI (GenAI); and quantum computing, which can speed up and enhance machine learning, the potential to transform the accounting and audit professions is immense.
As technology continues to evolve, so do accounting and audit professionals as they gain access to huge amounts of data and leverage AI to streamline workflows. Besides data analysis, AI can also be used to improve various accounting and audit processes to save time, reduce human error, and increase efficiency.
Despite AI's potential, fears persist that it could replace humans by performing tasks faster and more accurately. However, experts from the World Economic Forum (WEF) predict that automation will result in an increase of 58 million jobs, with two-thirds of which being highly skilled. While AI has the power to revolutionize accounting, its real strength lies in supporting the work of highly skilled professionals.
Technological advancements and applications
Following a technological lull, the past years saw an uptick of AI applications across various industries. This nascent period saw AI becoming more adept at handling, organizing, and analyzing large sets of both structured/quantitative and unstructured/qualitative data. The digital revolution, which is data-rich, has also sparked interesting AI use-cases in different fields.
For example, lease accounting analysis is usually performed by humans; although, some pilot programs show that AI tools could execute the same task more quickly. That is, AI can possibly review up to 80% of the contents of simple lease arrangements, thus allowing humans to focus on more challenging tasks or, in this case, more complex leases.
Nevertheless, AI cannot replace the judgment, experience, and creativity that humans bring to their work. Making value judgments and weighing opportunity costs are still out of the scope of AI.
Predictive capabilities
Overall, one of AI’s main strengths lies in its predictive capability. AI could help audit teams reasonably predict future risks and recalibrate their approaches. Additionally, AI presents interesting opportunities for accounting areas like fraud detection.
Another lucrative area for AI is anomaly detection, the predictive value of which underscores AI’s evolution and allows auditors to work more efficiently. Consequently, organizations must ensure that their AI algorithms are compatible with their current infrastructures and workflows, which requires a balance in planning, training, and monitoring.
Real-world interactions and implications
AI’s second developmental phase, shaped by its interactions with the world, can be seen in voice recognition and similar tools. Other technologies like the Internet of Things (IoT), the network of physical devices and objects connected to the Internet that collect and share data, could enable AI to synergize with the material world. This shift is often called the Fourth Industrial Revolution.
AI will impact not only audit work but also talent recruitment since it will demand new, diverse profiles, rather than replace existing talent. As such, the industry will need skilled individuals across a wide range of disciplines; moreover, they must understand accounting, its industry, and emerging technologies such as AI, blockchain, and machine learning. By keeping pace with technological advancements, organizations can continue to deliver high-value, high-quality audits.
Building confidence in AI adoption
Goldman Sachs forecasted that global AI investment could reach 200 billion USD by 2025. However, survey data from the International Data Corporation (IDC) — a global market intelligence firm — showed that only 22% of organizations are planning to adopt AI tools, with 52% citing a lack of specialized talent as the top blocker. Moreover, an EY survey showed that 65% of CEOs believe that more work is needed to address various AI-related risks like data privacy, misinformation, and intellectual property.
Building stakeholder trust takes time, and it requires a balanced approach that encourages innovation while minimizing risks. As such, EY has started shaping responsible AI guidelines and frameworks through the EY.ai Confidence Index, a tool that integrates ethical, societal, and public policy considerations.
Driving sustainable growth through AI
AI will reshape the global economy, which will come with new risks and opportunities. Organizations must identify opportunities, leverage AI, and create long-term value to gain a competitive advantage over their peers.
Leaders face the critical task of navigating change management, clarifying AI-related misconceptions, and establishing AI governance. With responsible and people-centered approaches to AI, organizations can drive sustainable growth, empower talent, and transform the accounting and audit professions.
Vivian C. Ruiz is the Vice Chair and Deputy Managing Partner of SGV & Co.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
