Why AI is here to help accountants, not replace them

As artificial intelligence (AI) technology matures, many other roles and jobs are set to be replaced. For example, AI can detect patterns in massive datasets that a human would be unable to match.

So, are accountants going to be replaced by AI? (Hint: We don’t think so.)

The argument in a nutshell

Those who argue for replacing accountants with AI have misunderstood some key elements of both.

Their argument, in simple terms, is that as the world becomes digital, computers will take over all the manual work previously done by humans, including bookkeeping. In some ways this is already true: invoices are issued automatically, ERP systems handle all journal and general ledger entries, accounting packages prepare financial statements, and auditors have the full trail in front of their eyes. . Following this logic, auditors should also be replaced, since computer programs can easily validate transactions. Even assumptions and judgements, for example, the discount rate to be used in CSA 842can be calculated more accurately using AI.

However, what this argument misses are the limits of AI – and the true power of the accountant.

AI: knowing your limits

AI itself is only as powerful as entries it receives. “Garbage in, garbage out”, goes the famous saying. The AI ​​is also based on limit entries because not all information is available. Additionally, AI can provide data, make predictions and identify trends; but what is done with that information, and what business decisions are made, is a step beyond the capabilities of AI.

The AI ​​also has other weaknesses. For one thing, he doesn’t always see the full picture. For example, a human being can hear snippets of a conversation, read a report, understand body language, and then make a decision. Let’s say an AI model suggests that a certain asset class should be bought, based on historical data. A human being might consider this information, but they might also decide that, given the company’s current financial situation, this investment would not be prudent at this time.

Another weakness of the AI ​​is that it sometimes gets things wrong – very badly – ​​and a human hand has to make sure that doesn’t lead to disaster. A Example It’s when AI was used by a fashion retailer to predict which items certain customers would like. The algorithm ended up pushing specific ethnic modes to members of particular ethnic groups. This was a huge embarrassment for the retailer and the project was quickly shut down.

Accountants: a broad role

The role of the accountant within an organization is also misunderstood by many non-accountants. Accountants and finance team members have a massive contribution to make that goes far beyond traditional accounting and reporting.

Smart companies leverage their accountants – who are by definition highly skilled, well-educated, and able to handle complex transactions and calculations – to add tremendous value to their businesses.

For example, accountants have a “big picture” view of the business. Every department, every expense and every income item is reported to the accountant. Accountants can thus recommend courses of action, advise the CEO, add value to the board of directors and help create synergies between departments.

They are also able to assess the macroeconomic environment as well as the trajectory of the company, the long-term vision of the board of directors, potential opportunities and new markets, the interests of shareholders and other stakeholders, and to help chart the way forward, including providing valuable input into any major decisions that need to be made.

Accountants use all the inputs at their disposal: from financial information to company management directives to external data, as well as their own experience and intuition. AI is of course an essential input.

In fact, the value of an accountant who understands and harnesses the power of AI is nothing short of awesome.

AI is ready to help accountants

This means that AI cannot and will not replace accountants. Those who don’t believe this are misinformed about accountants, AI, or both.

What is about to happen, however, is that AI is going to help accountants tremendously. By leveraging AI, accountants will have a whole new arsenal to add value to their organization.

Written by Moshe Freedman, Chief Solutions Officer (CPA) at Trullion

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