In the current era, the technology advancement is increasing due to which the many industries and professionals are affected. The major changes in technology are creating an impact on accounting and the ways the accountant performs their jobs. The aim of the paper is to critically analyse the threat or an opportunity for the accounting profession due to the change in technology. The major technologies that are discussed in the paper include Artificial intelligence and blockchain technology and their likely uses in accounting. In addition, there is decision-related to the use of these technologies in accounting in the near future. The details are explained with the help of the one case of each for the use of AI and Blockchain in accounting.
Artificial intelligence is a range of computer science which mainly focuses on the formation of the intelligent equipment that performs the effort and act in response like human being. On other hand, the blockchain technology is an undeniable ingenious development. This technology formed the backbone of an innovative kind of internet by permitting the digital facts to be dispersed but not to be copied. In other words, blockchain technology is an incorruptible digital book of the economic connections that can be programmed to best ever not only the transaction related to finance but also the virtually everything that has value (Nofer, Gomber, Hinz & Schiereck, 2017). AI and blockchain technology is widely used in accounting.
The effective use of the computer technology in the process of accounting is not new but AI technology implementation makes the accounting process much powerful and improvements in the system are visible. AI allows the professional to get the extremely accurate outcomes which are not possible with the help of humans (Omoteso, 2012). AI technology is widespread due to which its adoption in business and accounting is growing. This technology allows the accountant to better prediction and effective intelligent automation which is essential to deliver more value, focus on forward-looking analysis and offer the great leadership to businesses (Kokina & Davenport, 2017). Though, the implementation of the Artificial intelligence is difficult for the professional of the accountant as they have to become handy with the use of AI.
On the other hand, Blockchain technology is a book-keeping technology. This technology is disturbed with the transfer of ownership of assets and also contribute in maintain a ledger of financial information accurately. This technology contributes in enhancing the book-keeping professions by decreasing the cost of continuing ledgers (Tapscott & Tapscott, 2017). This technology is known as the replacement for reconciliation and bookkeeping work. Blockchain technology could threaten the work done by the accountants by adding the strength to the focused on providing value elsewhere (Li, 2016). Though on the other hand, the accountants get many opportunities as an expert can keep the records, application of complex rules with the business logic and setting the standards. The accountants face some of the issues at the time of implementing the blockchain technology in the accounting system.
In the near future, it is expected that the Artificial intelligence system will provide the assistance and help to accountants so that they can provide more insight and further up the value chain. This technology will allow the accountants to take the decision for the complex task. Institute of Chartered Accountants in England and Wales build a positive vision for the future in which they progress a deep understanding for how AI can resolve the problems related to accounting and business (Bolinger, 2017). Blockchain in the near future will increase the use of cloud computing technology by clients or the accounting organisations. In the near future, the accountant will get the detailed knowledge of concept how the blockchain perform the working (Alarcon & Ng, 2018). This system will be used by almost every accountant in the near future for monitoring the financial performance.
One of the big four tax and accounting company, Ernst & Young (EV) makes use of AI for their processes. The company make use of this technology to review the lease accounting standard when the International Financial Reporting Standards (IRS) issues a new lease regulation. Generally, this has been found that large organisations have to manually re-examine tens of thousands of leases to obey with the new law. Along with this, the global clients of the company processes millions of invoices on yearly basis and for this, they make use of this technology so that they can identify the faults. This is found that the fraud detection system is 97% accurate than the other companies (Zhou, 2017). This shows that the ways through which the company make use of AI in accounting.
Blockchain technology is used by big four for their accounting practices. This technology was initially accepted by EY Company for their accounting practice. The adaptation of this technology helps EY for performing the audit for the companies who are making use of cryptocurrencies. In this kind of audits, the company have to make use of the basis of testing of Blockchain assets, liabilities, equity and smart contacts. In addition, the EY Blockchain Analyzer is designed to facilitate EY audit teams while meeting an company’s entire transactions facts from different numerous blockchain ledgers (EY, 2018). The auditors can question the data and this technology allows them to perform the examination of transactions, reconciling and recognizing the transaction outliers. This technology is formed with the motive to assist the multiple cryptocurrencies which include Bitcoin, Ether, Litecoin and Bitcoin Cash (Accounting for cryptocurrency, 2018).
This reflects that the company believes in making use of the advanced technology. This is the reason company EY makes use of Artificial intelligence and Blockchain technology in their accounting practices. Though, the company educated the employees on the use of this technology in their accounting practice.
Considering the real case, I believe that the argument made by the author is fact. According to my point of view, these technologies help the accounting company to meet the standards introduced by the International Financial Reporting Standards (IFRSs) and Australian Accounting Standards (AASs). The accounting standards are fulfilled by the company with the help of this technology. This is clear because the companies are adopting these technologies because they are willing to fulfil the standards. The company who are following the same include KPMG, EY and many others.
It is expected that in the near future there will be major changes in the regulations of financial reporting considering the advancement in the accounting. The accounting standards will include the use of the technology for conducting the practice of accounting. Australian Accounting Standards can upgrade the style of presenting the accounting data which is possible with the use of technology. In addition, there might be the inclusion of some modified accounting treatments which is essential to conduct by companies (Bizarro & Dorian, 2017). The companies who perform the accounting practice will surely make use of technology for implementing the modified accounting treatments. Considering the viewpoint of Erik Asgeirsson, president and CEO of CPA.com believes that Blockchain is considered as just the next in the long line of transformation within the world of accounting.
In addition, The International Financial Reporting Standards (IFRSs) and Australian Accounting Standards (AASs) can bring the regulation in which it will be mandatory for the companies to adopt a particular software and technology for making the treatment of tax and other transactions. Moreover, this is expected in the near future that there will be the scope of the appropriate use of AI and Blockchain technology in accounting practices. Though, these technologies are used by big four accounting but with the time the other small companies will also make use of these technologies.
Conclusion
The analysis reflects that this is the fact that the technology changes are bringing the changes in the accounting practices that are conducted by the company. AI and blockchain technology is used by the companies for their accounting practices. The companies who mainly use this technology include the big four companies. Along with this, this has been found that technology supports the companies by providing them with numerous benefits which help them in performing their business practices effectively. This is the major reason that these technologies are adopted by the well-known accounting companies. The use of accounting practices is explained with the help of taking one case for the AI and blockchain uses. In the end, there is discussion related to the future changes in the accounting considering the use of technology in accounting practice.
References
Accounting for cryptocurrency. (2018). Professional Accountant, 2018(32), 10-12.
Alarcon, J., & Ng, C. (2018). Blockchain and the future of accounting. Pennsylvania Cpa Journal, 88(4), 26-29.
Bizarro, P., & Dorian, M. (2017). Artificial Intelligence: The Future Of Auditing. Internal Auditing, 32(5), 21-26.
Bolinger, G. (2017). Artificial intelligence and the future of the accounting profession. Cpa Practice Advisor, 27(8), 17-17.(2018). EY announces blockchain audit technology. Retrieved from: https://www.ey.com/gl/en/newsroom/news-releases/news-ey-announces-blockchain-audit-technology
Kokina, J., & Davenport, T. (2017). The emergence of artificial intelligence: How automation is changing auditing. Journal of Emerging Technologies in Accounting, 14(1), 115-115.
Li, V. (2016). Bitcoin’s useful backbone: Blockchain technology gains use in business, finance and contracts. Aba Journal, 102(3), 31.
Nofer, M., Gomber, P., Hinz, O., & Schiereck, D. (2017). Blockchain. Business & Information Systems Engineering: The International Journal of Wirtschaftsinformatik,59(3), 183-187. doi:10.1007/s12599-017-0467-3
Omoteso, K. (2012). The application of artificial intelligence in auditing: Looking back to the future. Expert Systems with Applications, 39(9), 8490-8495. doi:10.1016/j.eswa.2012.01.098
Tapscott, D., & Tapscott, A. (2017). How blockchain will change organizations. Mit Sloan Management Review, 58(2), 10-13.
Zhou, A. (2017). EY, Deloitte And PwC Embrace Artificial Intelligence For Tax And Accounting. Retrieved from: https://www.forbes.com/sites/adelynzhou/2017/11/14/ey-deloitte-and-pwc-embrace-artificial-intelligence-for-tax-and-accounting/#1119e5143498
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