With the Industry 4.0 driving the advancements in information and communication technology (ICT), the speed of change within the industry and the type of jobs is accelerating, demanding a sea change in accounting education as well. Global accounting firms such as Deloitte, PwC Consulting, and KPMG have already introduced machine learning (ML) software for simple auditing tasks such as lease contracts. Dixon Hugh Goodman, a large US accounting firm, is investing hundreds of millions of dollars in artificial intelligence (AI) to deploy the technology starting this year. for use this year. In addition, the American Institute of Certified Public Accountants (AICPA) is developing an AI accounting platform, DAS, that all 15,000 member companies can use. Members, most of which are SMSs, are welcoming the move. As such, technological change affects the industry. Above all, AI is a type of technology that has the broadest and deepest impact in our lives, bringing about significant change in how we work. Drivers, marketers, construction workers, accountants, lawyers, doctors would face shift in how they go about their business when AI technology becomes a prevailing, everyday feature.
Then, what about the accounting sector? Accounting of tomorrow will look quite different from that of today and even more different from the past. Most in the accounting field, CPAs and accounting professors alike, agree that AI integrated with technologies like blockchain will completely transform these jobs over the next decade.
- AI automatically inputs financial reports while blockchain provides security
- AI speeds up data processing but needs to overcome hurdles in interpreting accounting information
- US to hire 10% more accountants every year by 2026
- University and accounting industry calling for a curriculum on new technologies including data analytics
Accounting is a field that is as long as human history. As such, there are many aspects in the field that is repetitive and require less analytical work. AI essentially helps accounting professionals automate repetitive tasks that have often been performed manually. A typical example is customer balance verification by an auditor. Previously, it was necessary to spend a great deal of time and manpower writing a letter or an e-mail to each customer. With AI, however, the auditor can make a software program and automatically generate an e-mail or a letter in reply to inquiries on their balance without zero manual input.
Today AI helps with accounting process by automating accounting report generation and providing real time information to boost production and sales. Auditors can test a large number of samples to identify shortcoming and issues within internal control system. The current accounting process is significant as it explores various business activities in the company and provide meaningful decisions through internal reporting and financial statements.
Oftentimes blockchain is mentioned when discussing the implication of AI in accounting. Blockchain encrypts a secure transaction ledger that is theoretically impossible to manipulate. It can be used as an accounting tool because it prevents tampering and provides real-time access to corporate financial transactions any time. When you integrate blockchain with advanced AI technology, you can review all financial records, blockchain is seen as a game changer in enterprise financial audit.
However, even if AI takes care of some financial tasks, it cannot replace human accountants altogether. Machines and relevant software can speed up data synchronization, but cannot interpret and provide meaningful information. Accountants leverage AI to generate insights from vast data within an enterprise. AI will not only enable accountants to focus on their advisory roles and digital transformation, but also gain control over the organization's sensitive information. In particular, they will review blockchain and some AI technologies to reinforce safety and security in audits.
Hence, it is not surprising that large accounting firms such as PwC Consulting and Deloitte are expanding their pool of accountants. The number of newly employed accounts is expected to grow 10% annually until 2026. This is considerably higher than the average growth rate. Nevertheless, you cannot deny the fact qualification requirements for future accounting professionals are definitely changing. Now it's time to think about how technology will lead genuine value improvement in the accounting sector.
Accounting professionals must embrace technology to ensure job continuity. Schools, students, and employers, on their part, must be proactive and accommodate market needs. Some big accounting firms are recruiting students who double major in information technology (IT) or business analysis. This means that accounting firms find it easier than hiring an account and train them the technology. Consequently, HR managers expect new employees to be familiar with the basics of AI applied in accounting.
In step with the new trend in hiring, numerous universities are modifying their accounting curriculum to increase the number of data science and analytics classes. They are also offering accounting analysis classes that combine new technologies, or include machine learning along with data and analytics in affiliating with a company. At George Mason University we received international accreditation for both our business and accounting curriculum from the Association to Advance Collegiate Schools of Business International (AACSB). In the past 15 years, the Accounting Department has been offering mandatory courses in accounting information system (accounting analysis). The department is constantly discussing with several accounting firms affiliated with the accounting advisory board such as PwC to include AI technology in the curriculum. We are also teaching our students the technology throughout our curriculum such as an advanced accounting analysis course to help students understand AI in-depth.
Accounting is the foundation of any business. Accounting plays an important role from the moment a company opens its doors until it closes for good. Therefore, it is only natural that we are seeing growing cases of AI application in accounting. Instead of clinging to old, outdated practices, we must think like a scientist. As technologies evolve, accountants must upgrade their skillset. It’s now become a norm to use big data in corporate decision making. The science of accounting must embrace technology, instead of neglecting technology and create value. AI and blockchain will enhance the strength of accounting. I look forward to seeing further changes take place.
* To read the Korean article on Maeil Business Newspaper, click here.
September 24, 2020