The Future of AI Technologies in Accounting

May 14, 2024 | News

Merriam-Webster dictionary defines artificial intelligence (AI) as the capability of computer systems or algorithms to imitate intelligent human behavior.  A secondary definition is a branch of computer science dealing with the simulation of intelligent behavior in computers.

A 2018 Pew Research Center study asked experts to predict the positive impacts of AI and specific applications that might emerge in the next decade.  I thought it would be interesting to revisit these predictions in 2024 now that we are more than halfway there.  The experts who commented in 2018 who were AI optimists thought AI would be integrated into healthcare in the next decade and autonomous driving could be the norm.  The AI pessimists warned of lost jobs and privacy concerns.

ChatGPT is a form of AI.  GPT stands for generative pre-trained transformer.  It is trained on innumerable parameters to guess what can come next.  GPT cannot produce anything original or create new ideas.

I asked ChatGPT to tell me what experts predicted for AI over the next decade in 2018.  ChatGPT responded:

In 2018, experts made various predictions about the future of AI for the next decade. Some of the common themes included:

  1. Advancements in AI technologies: Experts predicted significant advancements in AI technologies, particularly in areas such as deep learning, natural language processing, computer vision, and robotics.
  2. Integration of AI into various industries: There was anticipation that AI would become increasingly integrated into various industries, including healthcare, finance, transportation, manufacturing, and retail, transforming processes and creating new opportunities.
  3. Ethical and societal implications: There was recognition of the need to address ethical and societal implications of AI, including concerns about job displacement, biases in algorithms, privacy issues, and the impact on socioeconomic inequality.
  4. AI-driven automation: Predictions were made about the widespread adoption of AI-driven automation, leading to changes in the nature of work and the skill sets required in the workforce.
  5. AI governance and regulation: There were calls for the development of regulations and governance frameworks to ensure the responsible and ethical development and deployment of AI technologies.
  6. AI in healthcare: Experts anticipated significant advancements in AI applications in healthcare, including personalized medicine, disease diagnosis, drug discovery, and healthcare delivery.
  7. AI in transportation: Predictions were made about the impact of AI on transportation, including the development of autonomous vehicles and AI-driven optimization of transportation networks.

I can definitively say that ChatGPT spit that answer out much faster and more thoroughly than I could read and process the 123 pages of the Pew Research Center study and craft a coherent summary.

AI in Accounting: One Possible Future

What can you expect from AI in accounting in the coming years?[1]  AI-powered algorithms in tax research will provide data from human-edited, tax-specific content.  AI Chatbots will handle routine client inquiries.  AI-powered software will reduce manual errors and save time by automatically reconciling accounts and generating financial reports.  AI will enable auditors to analyze large data sets and identify patterns in real time.

AI is not good at adjusting to unseen situations and providing clear and tailored guidance and advice.  ChatGPT itself says it can make mistakes and consider checking important information.  Two New York lawyers who included in a brief false citations ChatGPT generated when they asked ChatGPT to assist with research did not heed that caution and ended up sanctioned when this came to light.

AI also cannot nurture client relationships so we at Capaldi Reynolds & Pelosi anticipate continuing to serve you with the help of AI for many years to come.

The future of AI in accounting holds significant promise and is likely to bring about transformative changes in the profession. Here are some key aspects of what the future might hold:

  1. Automation of Routine Tasks: AI technologies, such as machine learning algorithms and natural language processing, will continue to automate repetitive and mundane tasks in accounting, such as data entry, transaction categorization, and reconciliation. This automation will free up accountants’ time to focus on more strategic and value-added activities.
  2. Enhanced Data Analysis: AI will enable accountants to perform more advanced data analysis and predictive modeling. By leveraging large volumes of financial data, AI algorithms can identify patterns, detect anomalies, and provide valuable insights to support decision-making processes.
  3. Improved Accuracy and Compliance: AI-driven accounting systems can help improve the accuracy of financial reporting and ensure compliance with regulatory requirements. These systems can detect errors or inconsistencies in financial data more effectively than traditional methods, reducing the risk of inaccuracies and compliance violations.
  4. Personalized Financial Advice: AI-powered accounting software can provide personalized financial advice to businesses and individuals based on their unique financial situations and goals. By analyzing financial data and trends, AI algorithms can offer recommendations for optimizing tax strategies, managing cash flow, and improving financial performance.
  5. Integration with Emerging Technologies: AI in accounting is likely to be integrated with other emerging technologies, such as blockchain and robotic process automation (RPA). These synergies can streamline processes, enhance data security, and improve the efficiency of accounting operations.
  6. Focus on Soft Skills: As AI automates routine tasks, accountants will need to develop and emphasize soft skills such as critical thinking, problem-solving, communication, and strategic decision-making. These skills will become increasingly valuable in interpreting AI-generated insights and providing actionable recommendations to clients.
  7. Ethical and Regulatory Considerations: As AI becomes more prevalent in accounting, there will be a growing need to address ethical and regulatory considerations, such as data privacy, transparency, fairness, and accountability. Accountants and AI developers will need to adhere to ethical guidelines and regulatory requirements to ensure the responsible and ethical use of AI technologies.

Overall, the future of AI in accounting is likely to revolutionize the profession, empowering accountants with advanced analytical capabilities, improving efficiency and accuracy, and enabling them to provide more valuable insights and services to clients.

Article submitted by Allison Fried.

[1] ChatGPT’s answer to the question of what is the future of AI in accounting?

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