Why AI can’t fully automate accountancy
17 January 2020: the term "automation" strikes fear into the hearts of many professionals, but Head of the ICAEW Tech Faculty Richard Anning explains why the limitations of technology mean accountants will always have a role to play in optimising their clients’ financial position.
Artificial intelligence (AI) is impacting every aspect of our lives. Alexa has moved on from a novelty gadget to an intelligent assistant, while Siri can be used to pull up corporate financial data in an instant. The development of these devices and applications – coupled with the use of Cortana on automated helpdesks – suggests that many businesses might be perfectly happy to accept an automated message from their accounting system rather than a call from their accountant. So what role can AI play in accountancy?
One of the stand-out qualities of AI is its ability to identify patterns from large volumes of data. In doing so it can also “highlight fraudulent activity that a person viewing the data may not recognise,” says Anning. Accountants can explain these patterns to their clients to help them increase the efficiency of their business. “Additionally, technology can help accountants deliver higher quality audits by analysing every transaction undertaken by the client rather than just a sample.”
But this does not mean human interaction is on its way out. People are inclined to trust computers, so when a client receives a number from a spreadsheet they will often assume it is accurate rather than standing back and asking whether it makes sense. Therefore, there remains a need for accountants (who, let’s remember, are trained to be sceptical) to provide this critical view.
“Accountants are moving from being tax preparers to tax assurers,” says Anning. “We see software making honest mistakes in returns, even in the age of Making Tax Digital, so the accountant has a vital role to play in checking that any claims made in these returns are comprehensive and accurate.”
The good news for businesses is that a wave of vendors are bringing AI to the masses. While clients will expect the cost of standard services to fall if they are increasingly interacting with machines rather than people, Anning says accountants can charge a premium for value added work.
“The challenge for accountants is to reposition their practices away from low value activities that can be easily automated,” he concludes.