Artificial Intelligence and Blockchain: What They Mean for the Accounting Profession

Facing disruptive technologies such as artificial intelligence and blockchain, finance and accounting professionals are justifiably concerned about what these new technologies mean for their professional livelihoods.

This article by Daniel Hood takes a glass half full perspective, arguing that AI and blockchain present more opportunity than threat for the accounting profession — that is, assuming the profession is willing to embrace the shifting skills and mindsets that accompany these emerging technologies. While they will consume many core accounting and auditing tasks — for instance, they seem likely to render many aspects of the audit irrelevant — they also present new opportunities for boosting the profession’s stature and even revenues.

Artificial intelligence is basically software that “learns” by analyzing and drawing conclusions from large quantities of data. Examples of AI in action in accounting might include software that knows the entire Tax Code, can spot trends across millions of tax returns, and can even learn how to characterize and treat financial transactions. Because AI can eliminate the need for sampling, many think audit will be the first accounting area to benefit from AI, allowing auditors to dig deeper into the data and apply human judgment.

Similarly, blockchain’s ability to automatically validate information has the potential to transform assurance functions. Blockchain is an internet-distributed database accessible only to those with heavily encrypted, highly secure keys. Without the need to sample data, auditors’ roles might shift to checking the security of keys and pursuing fraud more aggressively. Blockchain is also expected to streamline internal procedures as problems such as misclassifications, transpositions and coding errors become a thing of the past.

The article envisions accountants saving huge amounts of time as tasks such as testing, authentication, verification and substantiation are consumed by technology. But what does this mean for the profession? Although AI and blockchain could radically change the accounting profession, some believe that jobs are more likely to shift than be entirely eliminated.

But accountants will need to “readjust their skills sets somewhat, and be open to new ideas, approaches and methods,” including working on their data science skills. For now, the article suggests that accounting firms take a thoughtful approach to learning more about how these tools work and preparing for how they can add value on top of them.

For the complete article, read “Brace yourself for AI and blockchain.” From Accounting Today, Jan. 8, 2018.