Robots on the Rise: Automation in the Accounting Profession
Accounting, like many professions, is on the cusp of sweeping transformation due to automation. This has led to speculation that CPAs and management accountants are at risk of being replaced entirely by robots. That’s not our view, by any means, but it’s true that accountants’ skillsets must and will evolve.
We’ve seen automation in accounting processes for decades, of course, from the punch-card computer era to the latest advances in data analytics and the cloud. What’s different now, however, is the digitization of financial data is vastly accelerating the adoption of artificial intelligence and spurring emerging technologies such as blockchain. Deloitte, for one, estimates robotics could automate 40 percent of basic accounting work by 2020.
The advantages of these changes are obvious: greater speed and accuracy in data entry and calculations, an increase in efficiency and quality for compliance work, and more time freed up for professionals to concentrate on higher value advisory services.
There are benefits to specific practice areas too, particularly the audit. Under current practice, auditors sample subsets of financial statement information to ensure its overall integrity. But the development of blockchain–a distributed, digital ledger that provides an immutable record of transactions over a peer-to-peer network–makes it theoretically possible to do full dataset checks. Pairing that with deep analytical capabilities means anomalies and inconsistencies would be easier to catch, a boon for the public interest.
There are still questions to be answered about blockchain’s functionality on an enterprise footing, and on a host of other related issues. To that end, the American Institute of CPAs and its technology arm, CPA.com, have been exploring the implications of the technology on accounting with the Wall Street Blockchain Alliance, a nonprofit trade association for financial market professionals. We’re also looking into broader audit solutions with CaseWare International, a leading audit software company.
One thing’s clear, though: no matter how automated accounting and auditing become, CPAs still have a critical role to play in ensuring that financial information is reliable. The tools and methods they use to perform those tasks will likely change, but machines can’t replace the critical thinking, judgment and professional skepticism that CPAs and management accountants bring to their work.
As Nicholas Carr, a tech writer who has extensively examined the interplay between human and artificial intelligence has said, “We should respect the capabilities of our computers, but we should respect our own talents even more.”
Even as we become more reliant on machines, we have an obligation to ensure the right inputs are being entered into these sophisticated systems and that outputs are being accurately assessed. That’s why we foresee demand in many new assurance areas, from cybersecurity risk management to data integrity.
Organizations will increasingly need highly skilled, digitally proficient talent to deliver on these kinds of higher value service areas. We’re working hard to make sure accountants are well positioned–and have the skills necessary–to meet these changing demands.