AI and the Changing Landscape of Accounting: Insights from Industry and Academia

The adoption of artificial intelligence (AI) in the field of accounting is rapidly changing the dynamics of the profession. A recent workshop, hosted by the Journal of Information Systems, brought together industry experts and academics to discuss the implications of AI for accounting. The key question on everyone’s mind: will accountants with AI replace accountants?

Anecdotal and empirical evidence suggests that AI adoption within accounting firms and departments leads to improved efficiency and a decrease in the number of junior accounting employees. For instance, Microsoft’s Modern Finance project leader mentioned leveraging AI to control finance headcount. Research also indicates that a rise in the share of AI workers correlates with a decline in junior accounting positions.

This trend prompts us to consider whether we are entering an era of diminishing demand for new accounting professionals and a shift in the required skill set for new hires. Accounting professionals often view AI-enabled process automation with apprehension, akin to the uncanny valley effect when confronted with human-like machines. The concept of „algorithm aversion“ has been explored, but there is an alternative perspective – AI can augment humans, leading to new capabilities, products, and services.

The evolution of AI in accounting can be traced through three periods of hype, with the latest surge driven by Big Data-enabled machine learning and deep learning methods. Business leaders and investors anticipate that AI and machine learning will enhance efficiency, reduce risk, and stimulate innovation. Firms are investing heavily in AI to create value through higher revenue or cost reduction.

There are contrasting views within the AIS research community and accounting firms regarding the stage of AI evolution. Some argue that interest in expert systems waned in the late 1990s, while others believe that opportunities for AIS research in AI are abundant, particularly in machine learning.

The fundamental premise behind AI in accounting is that it enhances human decision-making. Analytics, simulations, and AI can be leveraged to improve organizational decision-making by reducing uncertainty and enabling better predictions. However, AI’s impact goes beyond automating routine tasks; it now has the potential to affect high-status jobs that were previously considered safe.

Foundation models, the latest wave of AI, are trained on vast amounts of data and have the ability to understand language and extract meaning from complex data, such as financial records. This opens up new possibilities for automating tasks that were once solely the domain of human accountants.

To delve deeper into this topic, you can read the full article „AI and the Accounting Profession: Views from Industry and Academia“ by J. Efrim Boritz and Theophanis C. Stratopoulos in the Journal of Information Systems (2023) 37 (3): 1–9, accessible at [Journal of Information Systems]. This article provides comprehensive insights into the ongoing transformation of the accounting profession in the age of AI.

In conclusion, AI is reshaping the landscape of accounting, and the implications are profound. It is essential for both industry professionals and researchers to adapt to this changing landscape and explore the opportunities and challenges that AI presents. The future of accounting may very well be accountants working alongside AI, not being replaced by it.

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