The Future of Accounting in the Age of AI
November 30, 2022 will be remembered as a historic day. That’s the day OpenAI launched ChatGPT.
Today, you see AI all over the Internet. Microsoft implemented AI in almost all of its products, including Bing, Word, and PowerPoint. Google is completely changing its core products to implement AI capabilities. NVIDIA has become the fourth most valuable company in the world, over Amazon.com.
It’s not a bold statement to say that accounting will be transformed by AI in the next few years. According to research, 36% of accountants are already using AI to automate their workflows.
But what will this impact look like?
How AI Is Used in Accounting Today
AI is already shaking up accounting – especially at the “Big 4” firms (Deloitte, PwC, Ernst & Young, and KPMG. They use AI for things as a ‘predictive analyst,’ which helps clients make smarter financial decisions. AI forecasts trends, spots risks, and plans growth.
About 83% of accountants believe AI knowledge is becoming essential in the field, and auditing is another area where it is very interesting. By quickly analyzing large amounts of data, AI makes auditing more accurate, and especially less time-consuming.
Tax work, known for its complexity, is also getting easier because of AI. A survey by Ernst & Young found that 58% of finance teams use AI to keep up with changing tax codes and reduce errors.
Smaller firms are also using AI, though to a lesser extent. They're using it for bookkeeping, automating tasks like categorizing expenses and generating reports. This not only saves time but also reduces manual errors, leading to efficiency gains of up to 80%.
What Will Change Over the Next Decade?
Looking ahead at the next decade, the role of AI in accounting is expected to become much bigger. As AI evolves, it's going to be more powerful and user-friendly. This means we can expect the use of AI in accounting to skyrocket.
As accountants get more and more comfortable with AI, they're likely to use it even more frequently. It’s just like the iPhone – ten years ago almost no people over 70 years old were using it, because they didn’t understand it. Today? There are approximately 1.46 billion iPhones in active use around the world.
The numbers back up this trend, too. The AI in accounting market size is expected to reach $4.791 billion this year. And it's not stopping there – it's projected to grow at a CAGR of 48.4%.
Will AI Replace Accountants?
The billion-dollar question on everyone's mind is whether or not AI will replace accountants. But the answer, according to the big shots in the industry, is pretty clear: No, AI won't replace human accountants.
The leaders of the "Big 4" accounting firms are on the same page. Take Will Bible from Deloitte, for instance. He says that while AI is great at speeding things up, it can't be responsible for an audit opinion. That's a job for someone who's qualified and experienced.
Atkinson from PwC has a similar view. He's not a fan of letting a computer handle everything from start to finish. Why? Because even though AI is incredible at gathering info and making predictions, it just can't replace human judgment. It’s about trust and integrity.
So, what's the general consensus? Accountants aren't going anywhere. AI will take over the boring, repetitive tasks, leaving accountants free to focus on the deeper stuff like strategy, advice, and working with clients. This isn't the end of accountants – it's just a new step in the evolution.
Key Takeaways
Let’s recap:
AI is transforming accounting, currently especially within the "Big 4" firms.
Auditing becomes much faster and more accurate with the use of AI.
Over half of finance teams are already using AI for administrative work.
AI also comes in handy for efficient bookkeeping.
Will it replace accountants? Probably not. But it will certainly change the roles drastically.
With this information in mind, you have a better idea of what the future of accounting could look like, and how you can adapt accordingly to be well-prepared.
