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The Impact of AI in Accounting Field

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1. Introduction of the problem

Artificial intelligence nowadays plays an important role in lots of area, includes the accounting field. What does the effect AI have on accounting? AI can be helpful to accountants in many ways, but also being a risk to accountants in the meanwhile. We will talk about the introduction, the research questions and hypothesis, the background, the significance and implications of the study, 2 cases’ study analysis, the comparative case study analysis, and the conclusions and references. To discuss the advantages and disadvantages of the employment of accountants and AI, the final essay discuss it through three questions:

  1. What is the advantages of using AI?
  2. How do different accounting firms using AI by their feature?
  3. What is the negative effect of AI to accountants?

2. Hypothesis of the problem

The hypothesis of the essay is that if Artificial intelligence creates benefit of the work for The Big Four (Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC)). it will be further ahead of others in other accounting firms. The other hypothesis is that if the AI improves the efficiency of accounting work, the skill of data analysis of accountants will improve a lot.

3. Background of the problem

Tax preparation, auditing and strategy consulting are services that are severely relying on the use of human capital. The use of artificial intelligence has a negative impact on the business models. Technologies such as natural processing (NLP) and robotic process automation (RPA) compete in simple hours while human beings take weeks to do so.

AI is transforming tax and auditing process, but why and how is AI transforming AI profess. This problem is an issue of higher human labor force payments and lower AI costs. The main problem is the innovations of AI technology which reduces the costs of AI using incredibly.

If the company make innovations, it will become advance in others competitive. Apparently, each of companies, EY and Deloitte, uses a slightly different power for developing AI technologies.

After many failed efforts, AI improve its accuracy and speed a lot. (A man Mann, 2019)

AI’s point in popularity and presence in publicity machineries for tech and electronics does not mean it’s a brand-new idea. It’s been a goal and goalmouth of computer science pacesetters since the early 19th century and has grown amazingly in the 21st century. In recent years, AI has combined itself with other aspects of our lives as the influence behind the robot revolution, like Siri.

Artificial intelligence has become a used phrase to some degree in recent years, and while it’s become hard to distinct the publicity from its applied potential, AI is deep-rooted in a very realistic idea.

If the accounting firm make innovations, it will become advance in others competitive. If EY and Deloitte both use AI to reviews lease accounting standards, then the AI system is three times more consistent and twice as efficient as previous humans-only teams. AI opens up all sorts of opportunities to bring great value to the client. When IRS use AI to review a new lease regulation, large companies must manually re-examine thousands of older ones to obey it. Using NLP to citation information and a human-in-the-loop to confirm the results, the AI system is three times more reliable and twice as resourceful as previous humans-only teams. ((Adelyn Zhou, 2017)

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Deloitte uses natural language generation (NLG), the creation of text by its computers to deal with 50,000 text return every year for their clients who have employees in competitive financial situations. Using NLG, Deloitte creates detailed narrative report of individual tax return. Relying on these reports, its tax professionals offer more targeted financial advice to clients during consultations. (Adelyn Zhou, 2017)

EY starts small and aims to demonstrate immediate ROI. Chris Mazzei, chief analytics officer and emerging technology leader at EY, explains, “You have to take it from a business value perspective first, rather than a tech perspective first.”

Other issue is: Each of the three companies, Deloitte, EY and PwC, employs a slightly different process for developing AI technologies.

EY starts small and aims to demonstrate immediate ROI. Chris Mazzei, chief analytics officer and emerging technology leader at EY, explains, “You have to take it from a business value perspective first, rather than a tech perspective first.”

At Deloitte, a 70-member inner company innovation team focuses on all features of developing skill; the team devotes 80% of its time to AI. Its command is to create useful cases that guide AI-related investments across Deloitte.

Deloitte, is a very good company. I like Deloitte company very much. I also like the EY company. AI could improve the technology incredibly so if the company want to advance in all the other companies, it has to use AI in the all ways. If others use AI but one of the big four doesn’t use AI, it will fall behind. Another reason for them to use AI is that AI is indeed useful in accounting field. AI, as a technology, could not only improve the calculating speed, but also replace human labor force in another more intelligent field, like tax preparation, auditing and many other field.

Another issue is that although they big four all us AI, but they use it in a somewhat different way. In other words, they see it as a tool, rather than a technology. The leaders don’t care the scientific development of AI, instead, they care the economic value it can bring. The big four use AI technology from their own advantages and disadvantages, to make largest benefit for themselves.

PwC like to use AI technology, especially in its client service business, but EY like to use AI technology in small parts of AI, but demonstrate a lot in the ROI. However, in Deloitte, a 70-member internal team, devotes 80% of their time to focusing all aspects of the new technology.

Some negative effects are existing. It is like some kind of jobs are influenced more in the field of accounting. Some kind of jobs are influenced more accountant indeed. Accountants need to improve their efficiency and professional ability and quality. Some basic data processing work could be dealt with by the technology. Besides, for the companies and corporations, how do them improve their efficiency and lower down the cost is a large issue. If accountants don’t make efforts, then they will lose their jobs will not become. There are some worries that accountant entirely will be replaced by AI, actually the worries are spare. AI could do data analysis to some degree, but managers need accountants to get potential information from the data fetched from AI and help their decisions. Accounting jobs have 2 kinds, managerial accounting and financing accounting. Accountants who do auditing belongs to financing accounting. With the advantage of RPA, the auditing process could be more effective and less mistakes, so the demand of accountants reduces, which lead to the salaries of accountants reduces. For entrepreneurs, they will find the use of AI could improve efficiency, lower down the cost which bring the benefits out of their expectations. Using AI, accountants could save a large amount of time in collecting data, at the same time, lower down the risk of making mistakes and reduce the time of making decisions upon this data.

Do you like accounting. Do you know what will happen if there is AI. If there is no accounting, business will not make progress. If there is no AI, then many good effect will not disapeer. The speed of development will decrease. This is what we don’t want. I hate AI as an accountant. If there is AI, I will have more salaries. If there is no AI, managers will be unhappy. If there is AI, then managers will be happy. Everyone besides will benefit from its application in accounting. If everyone benefits from it, then world will be better off. However, as a technology, if will have side effect. As a technology, even the big four may not fit in it. Those who don’t fit in will fall behind. Those who fit in will be in front of the business. For accountants and accounting corporations, AI is a double-edged sword. If the character can change pressure into motivation, AI is a good thing. It was the best of times, it was the worst of times. AI was the best of technology, AI was the worst of technology. If big four could take their measures and benefit most from AI, AI will further widen the gap for them and their competitor. Otherwise, this will bring them down from the pedestal.

References

  1. Adelyn Zhou (2017), “EY, Deloitte And PwC Embrace Artificial Intelligence for Tax And Accounting”
  2. Daniel Faggella (2019) AI in the Accounting Big Four – Comparing Deloitte, PwC, KPMG, and EY
  3. Julia Irvine (2018) Deloitte reveals global revenue up 11.3%
  4. Aman mann (2019) Voices How AI is transforming the jobs of accountants

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The Impact of AI in Accounting Field. (2022, March 17). Edubirdie. Retrieved September 30, 2022, from https://edubirdie.com/examples/the-impact-of-ai-in-accounting-field/
“The Impact of AI in Accounting Field.” Edubirdie, 17 Mar. 2022, edubirdie.com/examples/the-impact-of-ai-in-accounting-field/
The Impact of AI in Accounting Field. [online]. Available at: <https://edubirdie.com/examples/the-impact-of-ai-in-accounting-field/> [Accessed 30 Sept. 2022].
The Impact of AI in Accounting Field [Internet]. Edubirdie. 2022 Mar 17 [cited 2022 Sept 30]. Available from: https://edubirdie.com/examples/the-impact-of-ai-in-accounting-field/
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