Friday, August 03, 2018

How AI is Affecting Accountants

The accounting industry is gearing itself for a major upheaval because of the implementation of artificial intelligence. The massive changes on the way - and already happening - are truly impressive. A recent report by PWC makes this clear.

In a global sense the report states that GDP will be up by 14% by 2030 as a result of AI. A high portion of this growth will come the replacement of workers in routine jobs by AI, something which is not new for technology but will be speeded up and enhanced with AI. And there will be new jobs for those who must manage and supervise the AI applications.

The impact of AI by augmenting or replacing humans is well known. The PWC study goes a lot further. To illustrate, it includes the following example of an AI application:

"An online insurer has leveraged an AI bot to automate the claims process from beginning to end. Instead of the days or even months it traditionally took to settle a claim, the bot is able to complete the entire pipeline from claims receipt, policy reference, fraud detection, payout and notification to customers in just three seconds."

Both accountants and auditors are deeply affected by this kind of application. Both are required to have a knowledge of the control system. Since this control system has been placed entirely under the actions of an AI bot, the accountants and auditors need to have a good understanding of how that bot works - in principle and in practice. They need to know how to test the effectiveness of that bot.

Multiply this by thousands to AI bots and you have an appreciation of why people are calling the AI revolution transformative.

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