Undergraduates studying on BU’s Accounting and Finance programme were treated to a fascinating insight into the world of Artificial Intelligence (AI) in accounting and financial reporting given by global expert Ruth Preedy who is Director, AI and IFRS Accounting at PwC. Dr Alan Kirkpatrick, Head of Education and Professional Practice for AFE introduced the session by referring to the research question posed by Alan Turing back in 1950: “Can machines think?”, and he asked if recent technological advances have put questions such as “how well can machines learn?”, “when should we allow machines to take decisions?” and “how will AI affect the roles and required skill sets of future accountants?”, into the frame. There is a deepening discussion in financial services, the professions and wider business community about the expected impact of AI on accounting and financial reporting.
Ruth Preedy explained how AI will have an impact on all sectors. In particular, healthcare, automotive and financial services sectors “..exhibit huge potential for high touch, high frequency and high value products and services enabled by AI”. Analyses carried out using PwC’s Computational General Equilibrium Model for AI in 2017 estimate a potential GDP gain of US$15.7 trillion by 2030 with China and North America expected to see the biggest AI gains. A wide definition of AI as “the theory and development of computer systems able to perform tasks normally requiring human intelligence” really includes activities such as natural language processing, machine learning, deep learning, speech recognition and machine vision. Ruth Preedy pointed out how AI might be presented at three levels described as: Assisted Intelligence, Augmented Intelligence and Autonomous Intelligence. AI today is more likely to be seen in the form of Assisted Intelligence that is associated with “..automating repetitive, standardised or time-consuming tasks” and is resulting in increased demand for STEM skills to build a ‘new tech ecosystem’. The emerging form of AI is Augmented Intelligence that involves collaboration between humans and machines to make decisions and Ruth Preedy said that “uniquely human traits such as emotional intelligence, creativity, persuasion and innovation will become more valuable”. The highest form of AI is Autonomous Intelligence and this vision of a possible future involves what Ruth Preedy described as “adaptive continuous intelligent systems taking over decision making” that “may question the future of humans at work”. Examples of discussions in the automotive sector for example indicate the sensitivities of Autonomous Intelligence systems.
AI is often discussed in the context of employment. Ruth Preedy referred to estimates by PwC that around 30 per cent of jobs overall (across all sectors) could be automated in the early 2020s but the proportion of jobs usually performed by individuals with higher education (graduates) that could be automated is estimated at the much lower figure of 11 per cent. This pattern is expected to be reflected in the accounting profession with more automation of more routine functions such as basic book-keeping and a continuing or increasing need for activities requiring higher levels of analysis. AI is being seen in accounting and financial reporting in the form of accounting packages (XBRL), IFRS modelling, auditing, contract review and ‘chatbots’.
Overall the message is that contrary to some of the more hysterical reports there will still be a need in the future for skilled accountants exhibiting knowledge of how to get the best out of AI in performing their critical analysis and decision making functions.
Dr Alan Kirkpatrick