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Cover story: How is artificial intelligence changing business and practice?

What does the rapidly developing area of artificial intelligence hold in store for the accountant in business or practice? A range of professionals give their sense of how things look on the ground – including insights from Richard Kemp of Kemp IT Law, Kabir Dhawan of Grant Thornton and Kevin Salter of Glover Stanbury and Jessica Pillow of Pillow May.

In February, the Future of Humanity Institute at the University of Oxford released a report into the threats that society faced due to heavy reliance AI in business and practiceon artificial intelligence (AI), giving the media more fuel to stoke the flames of a dystopian nightmare. The Electronic Frontier Foundation’s report, The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation, seized upon the potential for using speech synthesis to mount hacks, the deployment of malicious drones and subversive control of autonomous vehicles.

What was missing from the headlines was the rationale behind highlighting the potential threats and high-level recommendations for averting danger. The main objective of the report was to “prevent delays in the realisation of the beneficial applications of AI”.

Last year, an ICAEW report – Artificial Intelligence and the future of accountancy – pointed out that while widespread adoption of AI and machine learning in business and accounting was still in its early stages, the pace of change would force a need for people to develop a deeper understanding of what’s to come. The report stated: “In the short to medium term, AI brings many opportunities for accountants to improve their efficiency, provide more insight and deliver more value to businesses.”

From the lawyer’s point of view

Richard Kemp, Kemp IT Law

Right now, legal AI is at the “frothy” part of the hype cycle, and we’re just at the start of the machine learning era. Frothy AI today calls to mind the dot-com bubble. Today, it’s easy to forget that. In March 2000 – at the height of the bubble – only 5% of the world’s population was connected to the internet. Looking back at that time gives us insight about where we are now with AI: it’s only change at huge scale that really moves the dial. We’re not there yet with AI; and it’s difficult to see what that change will be at the height of a bubble.

While all the great changes of industrialisation have disrupted work, you must be optimistic about the future. Currently you can predict what work types may be disrupted by AI, but you can’t predict how all those changes will interact and produce new jobs. You could have been forgiven for thinking John Maynard Keynes had lost it in the 1930s when he said that we would be eight times better off in 100 years’ time, but he wasn’t exactly wrong! It’s easy to underestimate capacity for progress.

Data law is also in its early stages; the law doesn’t clearly recognise yet whether data is an asset to be owned or a utility to be used. AI has a big part to play here, as it means becoming more structured around permissioning for training, input and output datasets, and this is likely to lead to developments in how far IP law protects data.

Professional services perspective

Kabir Dhawan, associate director, business consulting, Grant Thornton

Things such as invoice processing, sales order processing and payroll processing have already hit a point where many finance system vendors offer automation as standard. Businesses that don’t do this today are below what we think the median position should be. However, robotic process automation (see the Tech Essentials guide) is an emerging area spanning two broad areas – AI and automation. The AI element will result in changes in how forecasting happens – algorithms should be picking up the challenging parts.

Most of the clients we see benefiting from automation tend to have large teams carrying out high volumes of manual activities. Small businesses will not be able to leverage economies of scale, and lots of automation and AI work is focused on replacing scale economy opportunities via process efficiency.

Smaller firms that don’t have the benefit of drawing upon a long-term technology roadmap will find their change in systems more event-driven rather than strategy-driven (eg, a finance system going out of support with a vendor); larger firms will invest to maintain their competitive edge.

There is inevitably always going to be a gap between small and large companies and how much they can leverage advancements in technology. As ever, the advantage small companies have over large is the ability to be agile around the solutions they choose, and the speed of implementation.

The accountants in practice

Kevin Salter, Glover Stanbury

I find the idea of AI exciting. The fact it creates the ability to eliminate highly repetitive and mindless office work is a real bonus. AI will also enable computers to perform decision-based tasks previously undertaken by people – we all know that human error can creep in. Large firms will have huge resources dedicated to AI development, but in smaller practices we will probably be using tools provided by the software houses that get built into their products.

We’ll see extensive use of automated voice processing as it’s much quicker to ask a chatbot than to open software and drill down for information.

When it comes to security, I hope AI will be able to detect compromises or attempts at compromise much sooner. However, caution will be needed to detect more sophisticated threats.

AI already plays a role for accounting clients who are prepared to adopt software, for example in speeding up the input of receipts. As software continues to evolve, the smallest businesses will see more benefits – although they may not recognise it as AI. Coding is one aspect, and data mining is another. The accountant in the future will need to be aware of the technologies and the tools that can make life easier for those in business.

Jessica Pillow, Pillow May

I’m excited about AI but also a bit nervous. It’s such a large topic and I’m struggling to understand how to apply the different elements that fit together.

I can see AI changing the workflow at Pillow May. We are already trying to systemise our processes so that when AI comes in with a vengeance, we are hopefully one step ahead. Certainly, having everything paperless will be important so that a computer has access to all your practice data. A central database would also probably help.

I try to keep up with developments in AI and tech by attending events. The last one I went to was jointly with the legal profession, and it was interesting to see how AI may make it easier for accountants to offer certain legal services, like contract review – likewise solicitors might potentially offer services such as book-keeping in future.

There will be a big role for accountants to play with AI. They will need to become more general business advisers. We need to be advising on improvements to financial systems within a client’s business, but this invariably leads to advising a bit on other systems too, as they also have an effect. I’m lucky that anything I learn for my own business internally can also be used as a service line for my customers, such as systems consultancy. A lot of the software houses now offer good content, training courses and conferences, for example on using Xero. You can really improve your continuing professional development and knowledge this way. 

However, some accountants will prefer to remain more focused on tax and accounts, in which case they may need to become very specialist!