When the Big Four CPA firm PwC announced, in 2019, that “1 in 3 jobs is likely to be severely disrupted or to disappear in the next decade because of technological change,” advances like ChatGPT were still a few years away from being launched. Since then, of course, artificial intelligence has steadily moved into risk assessment, sampling and other critical auditing activities, even as fears surfaced earlier this year about layoffs at CPA and other firms. All of which raises a question: Is there enough room for human and digital bean counters?
“It’s natural for people to worry about the arrival of a new tool, but in fact AI is not a threat,” said Karolis Matulis, a manager in the East Brunswick office of WilkinGuttenplan. “ChatGPT and other AI tools can take care of the low-hanging fruit like some correspondence and emails, and it can even help to interpret tax regulations, and legal documents like operating agreements — and that’s fine, because clients don’t want to pay us to read documents and input numbers. But it will let CPAs and others focus more on strategy matters that will offer a higher return on investment. We’re paid to be able to think at a higher level and advise businesses on how to work even more efficiently; and AI will let us devote more time to these and other value-added activities.”
The writing has been on the wall for some time, he added. “As big data became more central, we were being pushed to be able to analyze larger amounts of information and analyze it faster to reach useful conclusions,” explained Matulis. “Educational institutions began to add more courses dealing with analytics and technology, and we continue to see more movement in that direction.”
The accounting profession has been quick to adapt. “We hired a developer whose only job is to write code for us,” Matulis noted. “And some CPAs at our firm who work on tech-based projects are learning to write code. We look for candidates with some technology background, which can be a challenge, since these people typically don’t look at CPA firms as potential employers.” To reach them, WilkinGuttenplan has a “thriving internship program, and we’re active on college campuses,” he added. “We hold seminars and other activities where we mix with the next generation of potential employees.”
Matulis got his CPA certification a decade ago, and he’s already seen a wave of changes. “The CPA exam now has more of a focus on technology, and I understand that the AICPA [American Institute of Certified Public Accountants] may create new technology and other specialties for candidates beyond tax, audit and accounting.”
Paths for non-CPAs to become shareholders are also expanding. “One of our principals – a non-equity shareholder who has partner-level weight when it comes to firmwide business decisions – is from the IT department,” he related. “That’s because client needs go beyond audit and tax. A 10- to 20-person company may not have the internal resources to set up data analytics like Amazon or Google, but we can help them to gain a competitive technology edge.”
This theme of coexistence was highlighted by other CPAs. AI “does have the potential to automate certain accounting tasks and improve efficiency, but it is unlikely to completely replace CPAs,” according to Jason Juliano, director of EisnerAmper’s Digital Transformation Practice. “AI can be used to supplement a CPA’s work and allow them to focus on higher value-added work that requires human expertise.”
So AI will not displace accountants, but “It will redefine what accounting looks like,” he added. “AI will enable us to leverage tools to do our jobs even better, in areas like tax preparation, fraud detection, financial statement reporting, and audit controls and testing financial controls. It will help accountants to provide more qualitative services, in addition to quantitative services.”
The adoption of AI will likely also drive changes in the skills that accountants need, he added. “Students who are majoring in accounting will be expected to leverage an increasing volume of high-tech tools to handle data preparation and analysis, inventory management and other activities.”
EisnerAmper, like other CPA and advisory firms, is already looking beyond traditional accounting experience when it considers new hires. “Beyond their accounting studies and experience, we want people who are familiar with data analytics and can leverage technology across a number of areas,” Juliano said.
He recently delivered a webinar presentation to the New Jersey Food Council, and the subject of AI came up. “In fact, in preparing for conferences like this, I spend a good portion of my time designing PowerPoint presentations, and it will be awesome when the Microsoft PowerPoint program can assist me in automatically generating the slides itself based on the content I provide.”
PKF O’Connor Davies Advisory LLC partner Suma Chander pointed out that AI can find patterns in masses of big data and perform analyses, “But it cannot make judgment calls. Also, the information that comes out of AI is only as good as the data that’s fed into it. So human understanding and oversight is still necessary. Finally, people still want to interact with other human beings who understand their needs and goals.”
The speed of AI means that in an audit, CPAs can use it “to review an entire population, instead of a sample set,” added Mark Bednarz, a partner at PKF O’Connor Davies LLP and at PKF O’Connor Davies Advisory LLC. “That’s a ‘wow’ factor.”
Both professionals are seeing changes at their own firm. According to Bednarz, “As information moves away from paper to digital, people need data analytic skills, and it helps to understand programming languages … which can help on advisory engagements.” Adds Chander, “We’re increasingly looking for people who have a general understanding of dashboarding and analyzing data. If a person does not have those skills, they may get left behind.”
NJBIZ asked Hussein Issa, assistant professor of Accounting Information Systems at Rutgers Business School, if AI represents a threat to flesh-and-blood accountants. He sees historic parallels with previous advances.
“I don’t think AI will replace human CPAs, but it will change their jobs by automating certain tasks,” Issa said. “We saw something similar during the industrial revolution: burdensome manual tasks and occupations were replaced with higher-level opportunities. Many complex tasks remain that require judgment beyond the capacity of current AI.”
Artificial intelligence is “already completing certain repetitive and low-value tasks, enabling CPAs to focus on more complex, higher value tasks that require human judgment,” he noted. “Intelligent agents and bots can collect and analyze large amounts of data [Big Data] to help CPAs make better-informed decisions. For example, CPAs can take advantage of Natural Language Processing and textual analysis of social media to assess new client risk. They can also use machine learning models, such as Neural Networks, to identify fraud or predict bankruptcy. In general, CPAs will supplement and enhance their judgment capabilities with AI to provide higher levels of assurance.”
But that doesn’t mean AI will have no effect on CPAs. “Certain practices will either become obsolete or change dramatically,” he added. “CPAs need to learn new AI-related skills to avoid lagging behind business. For example, CPAs who would formerly count inventory manually can use AI and image recognition to accomplish the same task more quickly and accurately.”
Tech advances also influence hiring. “Currently, accounting firms are looking to hire people who are versed in data analytics, in addition to accounting,” according to Issa. “When they fail to find such skills in accounting candidates, they tend to hire data scientists, which is unfortunately happening at an increasing rate. Still, accounting firms continue to value candidates who possess both accounting knowledge and technical skills.”
Educational institutions are also gearing up to meet the evolving landscape. “Our … Department offers an accounting information systems course as well as an audit analytics course, which introduce students to several emerging technologies such as AI, RPA (Robotic Process Automation), process mining, and visualization,” he explained. “RBS also offers a Build Your Own Course series, where students can learn about text mining, blockchain, and cybersecurity … As a result, our students graduate with the skillset necessary for their success as future CPAs.”