Make Artificial Intelligence Your Personal Superhero
Introduction
Artificial intelligence (AI) in accounting is like having an incredibly diligent assistant—one who doesn’t ask for coffee breaks and can do much of the heavy lifting for us. AI is rapidly revolutionising the way accountants think about financial services, especially in accounting and assurance services. Taking over repetitive tasks to uncovering new insights from oceans of data, AI can become the superhero we didn’t know we needed. With all the benefits it can offer, using AI also comes with challenges and risks which need to be carefully managed.
AI is growing fast—really fast. Finance leaders around the world are excited about the potential of AI, but they’re also cautious. There are still risks to consider, but one thing is clear: AI is here to stay, and it's only going to get better. Below we explore how AI is reshaping the world of accounting and assurance, highlighting the opportunities, the risks, and a few friendly reminders about why we still need those trusty human brains.
AI in Accounting
While smaller accounting firms may not have the same resources as the Big 4, they also need to adopt AI to stay competitive and deliver better services. Here are some basic tasks you can employ an AI to assist you with.
Automating Accounting Functions
Using AI can free time up from tedious aspects of our accounting such as coding invoices, double-checking receipts or maintaining ledgers—things that might have us reaching for a second cup of coffee. This automation means fewer errors, less manual effort, and most importantly, more time for us to do the meaningful work of analysing and advising our clients.
For example, AI can look at past invoices and automatically code similar ones, saving hours of boring data entry. It's like having an intern who never sleeps and always gets it right.
Personalising Services
AI can assist you to give each client personalised advice in an instant. It can “learn” about a client's preferences and financial behavior over time, allowing you to offer customised services at a large scale—essentially creating bespoke solutions without the bespoke effort.
For example, AI can analyse a client’s spending habits and provide tailored budgeting advice specifically for them.
Document Review
AI helps firms quickly summarise key points from contracts, invoices, and receipts, and spot anomalies that need further investigation. This speeds up the review process and enhances accuracy in audits and compliance checks.
AI in Taxation
Conducting Research
AI-driven tools are helping firms conduct tax research more effectively by providing accurate data from trusted, tax-specific content. This means quicker, more authoritative answers for clients.Assisting with Tax Returns.
AI can extract and analyse data from various financial documents, streamlining the preparation of tax returns. It also helps identify applicable deductions and credits, ensuring compliance while optimizing tax liabilities.
Providing Advise to Clients
AI tools are also being used to offer predictive insights, enabling firms to advise clients on future tax implications based on their financial decisions. This adds value by allowing tax professionals to take on a more strategic advisory role.
AI in Assurance Engagements
Data Analysis and Automation
AI tools can analyse mountains of data in seconds, letting us focus on what really matters—identifying risks and making sure the financial statements are solid. AI can take care of the heavy lifting, like sifting through data to detect anomalies or preparing meeting notes, freeing up our mental bandwidth for deeper thinking. This is especially important for independent reviews that rely on financial analysis for concluding.
Accountants can efficiently monitor financial transactions and improve the accuracy and efficiency of their auditing processes.
For Example, AI can generate meeting notes automatically when meeting clients, giving you more time to focus on what the auditee is saying. Just make sure you review those notes, though—AI can mix up “encryption” with “entrapment” if the audio quality isn’t great!
Predictive Analytics
AI also brings some seriously cool predictive powers to the table. By analysing past data, AI can help forecast trends, identify potential risks, and make predictions that are useful for both accountants and auditors.
For example, AI models can predict cash flow issues before they happen, allowing us to advise clients to take action ahead of time. It's like having a crystal ball, but with math.
Benefits and Risks of AI
Benefits of Using AI
Efficiency and Costs Saving: One of the most appealing aspects of AI is how it can be a cost-effective option. Many AI tools are available through subscription models, meaning you don't need a massive upfront investment. Plus, since it’s software, AI doesn’t call in sick or take holidays.
Easy Accessibility: Not everyone is a coding wizard—and the good news is, you don’t need to be! AI solutions are now available in low-code or no-code formats, making it accessible even for those who think "Python" is just a snake. For example, ChatGPT can also be a valuable tool when drafting client emails, generating financial report summaries, explaining complex accounting topics, and even helping with tax research. Xero and Sage AI are popular cloud accounting platforms that incorporate AI for automated bookkeeping, invoice coding, and bank reconciliation.
Ability to Handle Unstructured Data: AI excels at processing unstructured data, which means it can analyze everything from financial reports to emails, finding the hidden insights that might have taken us hours to dig up. For example, AI can quickly sift through sustainability reports and organize key data, helping accountants prepare compliant and comprehensive statements.
Risks and Challenges in Using AI
Data Quality and Automation Bias: With all its strengths, AI does come with some risks, one of which is "automation bias." Basically, it’s the idea that because a machine says something, it must be true. Remember that AI isn’t perfect—it learns from the data it’s fed, and sometimes that data isn’t complete or fully accurate.
Your instruction should be accurate and include all relevant detail. What you tell in AI will determine what you will get from it. If ChatGPT may misinterpret your data because you did not provide adequate context, leading to incorrect conclusions. Just like a GPS leading you straight into a lake, AI can sometimes get it wrong. The solution? Keep your eyes open and always validate. When you do not get the correct response, rephrase your input message and try again.
Privacy and Security Concerns: AI should make you a little nervous when it comes to privacy and security. You wouldn't want to accidentally share a client’s confidential information with the entire internet, would you? That’s why it’s important to use secure AI solutions and train your staff on the best data-handling practices. Avoid sharing sensitive information with the client’s name and address or other identifying information.
Similarly to other systems, AI must also be protected from cybersecurity threats. Hacking an AI financial platform could lead to financial loss and reputational damage. All kinds of risks should be carefully assessed (external, digital, physical etc.). One solution is to use in-house AI tools or secure enterprise versions. The goal is to make sure your secrets stay, well, secret.
Hallucinations and Errors: AI can make mistakes, and those mistakes can be costly. Sometimes it may even "hallucinate" data—yes, just like that friend who insists they saw Bigfoot. AI’s version of hallucination might involve inventing a data source or getting confused over a similar-sounding term. Human oversight is key to mitigate this. AI can suggest, but humans must validate and decide.
Ethical and Legal Considerations
Human Judgment Remains Key
No matter how advanced AI gets, there’s no replacement for good old human judgment. The trick is to use AI to augment our work, not to replace the important decisions that only experienced professionals can make.
For example AI might flag an anomaly in financial data, but it’s up to you as the reviewer to determine if it’s a genuine issue or just an outlier.
Ethical Use of AI
Remain stay skeptical and use AI as a powerful assistant, not a final decision-maker. Ethical considerations must be at the forefront when we use AI. Frameworks like Deloitte's "Trustworthy AI" provide guidelines on responsible AI usage, reminding us that ethical AI is not just about compliance—it’s about doing the right thing.
Regulatory Landscape
The rules around AI are evolving, and it’s important to keep up with these changes. Staying compliant is crucial, especially in a field as sensitive as accounting. Regularly consult with legal experts to stay on top of regulatory requirements.
Adoption Strategies for Accountants
Start Small and Scale Up
Integrating AI into your accounting practices is no longer optional, but essential. It increases efficiency and elevates the strategic value accountants bring to their organisations and clients. Our advice is to start small, using AI for simple tasks like drafting reports or summarising meetings, see how it works, and then expand its use gradually. Identify the tasks you can automate, test it and slowly expand when you are happy with the results.
Training and Upskilling
To get the most out of AI, you need to understand how to use it effectively. You will have to also boost AI literacy within your team, encouraging them to play around with AI tools in a controlled environment—it's the best way to learn. For example, have every employee learn how to use ChatGPT.
Conclusion
AI offers a world of opportunities for accountants, from automating tedious tasks to providing deeper insights through data analysis. But with great power comes great responsibility—AI can assist, but human oversight, ethical practices, and sound judgment are irreplaceable.
So, let’s embrace AI as a powerful ally, but keep our critical thinking hats firmly on. After all, the true value of AI is how we use it to make our work better, not how it replaces us.
Learn more about using AI in accounting with CIBA’s CPD on Accounting in the Age of AI: Enhancing Efficiency and Accuracy
This webinar equips participants with essential skills to integrate artificial intelligence (AI) into accounting practices effectively. Attendees will:
Understand the impact of AI and ChatGPT and learn how AI, particularly ChatGPT, can revolutionise accounting practices, automating tasks, and providing powerful insights.
Discover how to use AI to streamline repetitive processes, enhancing operational efficiency and allowing a greater focus on strategic, value-adding activities.
Gain insights into using AI tools to perform deeper financial analysis and improve reporting accuracy.
Learn how to utilise AI to enhance client communication, deliver more personalized services, and strengthen client relationships.
Learn best practices for integrating AI into accounting workflows while understanding its limitations.
The course aims to empower accountants to refine their processes, elevate financial analysis, and foster stronger client interactions by leveraging cutting-edge AI technologies.