Artificial Intelligence (AI) will transform accountancy and the profession needs to prepare, according to ICAEW.
In a report Artificial Intelligence and the Future of Accountancy, the accountancy and finance body highlighted that the profession needs to accept that machines will take over more and more decision-making tasks from humans, and work out how to harness this.
The report says whilst accountants have used technology for decades to enhance the value they can deliver, the pace of change and the power of AI means a paradigm shift is coming.
Kirstin Gillon, IT technical manager, ICAEW, said, “AI systems are already very powerful and they are improving quickly. They provide outputs that are extremely accurate and can replace – if not supersede – human efforts.”
However, the report does not foresee wholesale replacement of humans by machines, stating that machine learning, whilst powerful, cannot yet replicate human intelligence and has significant limitations.
Gillon said, “Humans make decisions in two main ways – using intuition and reason – and both are important. Historically, AI development focussed on trying to replicate reason, but machine-learning based on rules, however sophisticated, will ultimately be defeated by the greater complexity of the real world. Recently developers have focused on pattern-recognition instead, which allows greater flexibility. But it depends on data inputs, so it will always be limited by the data available. Volume and quality of data is critical, and there may be issues of availability or privacy.
“More significantly, decisions such machines make are really just mathematical projections. Not all problems can be solved this way. Other considerations, like ethics, will always be important.”
ICAEW underlined that while the accounting profession is already adapting to this new technology, the profession needs to anticipate a paradigm shift. “Machines can already take over a lot of process and compliance work, for example, and they will start to offer insights, analysis and new services like fraud detection,” said Gillon. “This is good news for finance professionals, who will be able to focus on more valuable tasks like decision-making, problem solving, strategy development, and leadership. But it will require new roles and skills, and there will be institutional adjustments necessarily from regulators and standards setters.
She added that the message is: AI, like any other technology, can help add value, and will create opportunities. But finance professionals need to be agile and flexible to harness this potential.
Michael Armstrong FCA, ICAEW Regional Director for the Middle East, Africa, and South Asia (MEASA), said, “The wave of change in the region will be similar to the global market but probably at a slower pace due to the maturity level of the industry. Financial professionals will have to work closely with AI experts and data scientists to create tailored intelligent algorithms and solutions that support Arabic language. Only those who are willing to innovate will be able to take advantage of the changing finance market.”