Never-mind Making Tax Digital – What about Making Accounting Digital using AI?
Is machine learning (ML) and artificial intelligence (AI) likely to take local accounting functions deep into the digital wave and if so, what might that mean for our local accounting firms?
Accountancy firms are under pressure from many angles ranging from changing regulations, which impact on the service mix they can offer, to the looming, massive impact that artificial intelligence is likely to have. Drawing on the recent report by ACCA ‘Machine learning: More science than fiction’ I take a look at some of the implications of making accounting digital using AI.
Of course we already have fantastic cloud based accounting software which at its best can provide busy directors and accounting staff with accurate data and information at the click of a button, anytime, anywhere. Accounting functions and accounting software is built on managing detailed datasets, so it should be no surprise that the logical next threshold is making accounting digital using AI.
“One way to describe AI is the ability of machines to exhibit human-like capabilities in areas related to thinking, understanding, reasoning, learning or perception. ML is a sub-set of AI that is generally understood as the ability of the system to make predictions or decisions based on the analysis of a large historical dataset.
Essentially, ML involves the machine, over time, being able to learn the characteristics of data sets and identify the characteristics of individual data points. In doing so, it ‘learns’ in the sense that the outcomes are not explicitly programmed in advance. They are arrived at by the ML algorithm as it is exposed to more data and determines correlations therein.”
The world of AI and ML throws up huge ethical challenges, but leaving those aside the big question is what will the role of accountants be with AI automatically churning out the reports and ‘intelligence’ that has hitherto been their core domain? As in other fields, the answer seems to be that their role will be to ‘be-human’. This might sound a bit flippant, but the case is made that successful accountants will be those that are most able to draw on (uniquely - at least as far as we can see) human characteristics of applying knowledge, interpretation, leadership, judgement, insight and decision making skills. A key part of this is having a high level of ‘emotional intelligence’ – i.e. being good at relationship building, exercising empathy, self-awareness, self-regulation and motivation – in a nutshell - good social skills.
“Looking ahead, professional accountants have an opportunity to develop a core understanding of emerging technologies, while continually building their interpretative, contextual and relationship led skills. They can then truly benefit from the ability of technologies such as ML to support them in the intelligent analysis of vast amounts of data.”
“The large accountancy firms are all investing in ML to explore possibilities, for instance in audit and compliance. And in time the base of published evidence supporting the benefits of ML is likely to increase.”
Going forward then, accountancy firms will need to ensure they mix excellent social skills with the more traditional accountancy skills that any practice needs. The best and most successful firms are most likely those that have always done this. But the stereo-type, that still persists (whether accurate or not, I leave you to judge) is one of a more insular, introvert personality type.
All above quotes are from the ACCA report ‘Machine learning: More science than fiction’ – it’s a very interesting read, especially if ML and AI are still relatively new terms for you.
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