The advent of Artificial Intelligence (AI) in industry and the surrounding speculation as to how it will affect our future is not a question of ‘if’, rather ‘when?’ and ‘to what extent?’. There are countless films and print depicting the rise of sentient AI, often apocalyptic narratives such as Blade Runner, Terminator, and I Robot, which usually prophesize a robot-coordinated end of mankind, but as far-fetched the premise of these narratives may be, one thing is certain; as AI evolves, our daily lives will become increasingly affected.
AI initiatives are already being utilized by global corporations such as Apple, Google, Cisco, Microsoft, and Amazon, efficiently taking on repetitive tasks such as ordering & purchasing, auditing functions, payment collection, and generating forecast simulations, but AI has barely ‘scratched the surface’ of its overwhelming unrealized potential especially in accounting and financial operations. As AI becomes more predominant in business applications it is important that decision makers prepare for the eventual integration of AI into almost every aspect of their business model, but they must also be prepared for the shift in trends towards employment; focusing on what human skills will still be necessary moving forward while certain accounting jobs will be lost to technology.
But when do we expect that to happen?
Citing a recent report from Deloitte, a representative explained how technological advances have historically eliminated some jobs and created others, “We cannot forecast the jobs of the future, but we believe that jobs will continue to be created, enhanced, and destroyed much as they have in the last 150 years.
There’s no reason to suppose that this trend will not continue.” Deloitte further estimated that around 35% of skills will be different in the ‘near’ future. (Griffin, 2016) Tom Davenport, a Babson college professor who studies business AI applications denotes, “What AI is doing is sort of a more sophisticated version of what spreadsheets do. The more analytic and decision-oriented computations, at least for the next 20 to 30 years, will still require humans.” He further goes on to explain that there might be marginal job losses but the work being offered requires more sophistication than browsing through documents. (Journal of Accountancy, 2007) Professional accountants do much more than collect and store receipts and provide basic reports. They act as consultants who advise on tax planning, operations, and client goals; they make decisions that may require solutions based on context. AI can accomplish a multitude of simple decisions in fractions of a second, but it has yet to be able to devise solutions that require a nuanced approach. Professional controller services understand the rules and regulations that clients must comply and communicate options and recommendations in a manner that is understandable for the client. (Najjar, 2109)
As a business owner, it is critically important to find a balanced approach when facing the dilemma of implementing an AI strategy ‘too soon’ while also realizing the perils of ‘being left behind’ if preparations were not made in a timely manner. The size of the company and type of industry are key factors in the decision as to how much implementation is necessary. Large global firms such as PricewaterhouseCoopers or KPMG generate tens of billions of dollars in annual revenues, have a sizable investment in R&D, and easily can ante up large amounts of capital for implementations as new technology innovations become available. These costs are immaterial to their financial statements unlike the tremendous costs of employing tens of thousands of people world-wide. Therefore, the cost benefits of utilizing AI at the risk of laying off several thousand accountants and providing reskilling incentives to those that remain on their payrolls is the logically-acceptable solution even if societally problematic. Business owners of smaller companies who do not possess the type of capital to stay current with AI technology should still be making investments in AI or setting aside funds for future implementations because complete domestic and global integration of AI applications is considered more than a possibility, but an eventuality.
Hiring and employee retention practices of companies must also evolve to address the future needs of employers as AI functionality becomes the new standard in business. The role of the accountant in the future will obviously change, as repetitive tasks such as audit sampling and payment processing have already been allocated to machines, therefore it is paramount that employees become proficient in several jobs instead of traditional specialization in any one field of accountancy. Even though the reduction in menial tasks allows for accountants to be able to focus on more value-oriented, higher end tasks such as strategic initiatives, process improvement, and cost control, speculation permits that even those tasks may eventually be taken over by the algorithms of newer generation AI. Therefore, it becomes more realizable that employers seek out new hires with IT skills relatable to AI such as coding and data management, as experts in those fields may one day replace accountants altogether. The employees with a solid foundation in data management, who are comfortable with newer technologies will have a distinct advantage as AI usage increases.
It would be beneficial to look at potential candidates who are adept in IT internal controls since it would seem more likely that opportunities to commit internal fraud and misrepresentation of financial statements will be greatly reduced for companies except through manipulation of the AI systems. New opportunities in IT security will surely arise as an offset to the many other accounting positions that will become obsolete. Companies that have not yet applied AI into their business models but plan to in the future should consider offering incentives to current employees to gain database and IT skills by attending classes & seminars and completing self-directed learning that may assist in those employees’ future retention.
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