ICAEW: AI will cause paradigm shift in accountancy

Tuesday 4 July 2017

Workforces need to be flexible and agile enough to take advantage of the potential of the technology.

This is according to the Institute of Chartered Accountants in England and Wales (ICAEW), which released a report looking into how intelligent systems will take over decision-making tasks from humans and create new options in the profession.

The report titled ‘Artificial Intelligence (AI) and the future of Accountancy’ identified that the sector will have the opportunity to reimagine and radically boost the quality of business and investment decisions, but warned that adaptation must happen quickly.

Kirstin GIllon, ICAEW’s IT technical manager and author of the report, explained that the profession will experience a “paradigm shift” in the near future. 

“Machines can already take over a lot of process and compliance work, for example, and they will start to offer insights, analysis and new services like fraud detection.

“This is good news for finance professionals, who will be able to focus on more valuable tasks like decision-making, problem solving, strategy development, and leadership,” Ms Gillon explained.

She went on to say that new skills and roles will be required, as there will be institutional adjustments required from regulators and professional bodies. 

However, while AI systems can provide highly accurate outputs, they do not replicate human intelligence and the profession must start to recognise the strengths and limitations of the technology.

She warned that AI systems are merely mathematical estimations and will not be able to play a role in situations where ethics are involved. 

Ms Gillon added that, while the technology is capable of sophisticated outputs, it will not replace human intelligence and the industry must recognise this to recognise its strengths and weaknesses. 

The report suggests that accountants will need to start considering a multidisciplinary approach to the short and long-term effects of AI. This will mean working with computer scientists, software providers and other specialists to create a wider debate around the topic.

In order to make the most of the technology, the report calls for more innovation and sharing with other bodies to build improved business models. 

While AI is growing, freelancers should focus on appointing a skilled accountant that will be able to check if they are inside or outside of IR35 and ensure they are being taxed properly. 

As well as helping with regulations, the experts will be able to provide general financial advice and give companies the best chance of succeeding in their industry. 

By Victoria McDonnell

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