The Future Of Automation And AI In The Accounting Essay.

Efficiency and Accuracy in Accounting Processes

This report describes the current and historical status of the accounting sector and automation. It explains why businesses should implement automation and artificial intelligence (AI) in accounting processes and operations to make them more efficient and impressive. The accounting sector is supporting innovative ideas and providing flexible schedules to employees. AI and automation allow staff members to work remotely and complete mundane tasks at a faster pace. They help avoid human error-related issues in the business and provide a flawless working environment where machines can complete repetitive and time-consuming tasks in a fraction of the time it takes humans to complete these tasks. Advanced automation can mimic human interaction by using historical data to perform an activity that can be valuable in certain accounting operations.

This report also discusses the future of automation and AI in the accounting sector and how their implementation will be beneficial for accountants. Business owners who adopt AI and automation for accounting processes will have a competitive and leading edge in the industry. All accounting processes and practices will be more efficient and faster overall. Clients will see desired outcomes faster and companies will observe a record-breaking growth and performance. The digitalization of the accounting industry will empower businesses to identify which user accesses a file and when which creates more accountability. Automation directly benefits the accounting sector by increasing the accuracy and efficiency of audits and empowers accountants to conduct a thorough audit of financial transactions. As AI and automation will become more prominent in the future, accounting firms will focus more on their applications and adopting upgraded technology in the business.

New technological shifts, such as AI and automation, are affecting every industry and bringing major changes in business processes and operations, but are especially relevant in the accounting industry. Automation and artificial intelligence are delivering faster accounting and financial services (Moll & Yigitbasioglu, 2019). Arificial intelligence is completely different from automation and both has distinct functionalities and devices to execute accounting processes. AI is being used to elaborate a large amount of data through computer systems. AI enables computer systems to imitate human intelligence and reasoning to learn, predict, and recommend a shortest path to complete a particular task. On the other side, automation is a human-made machine that perform programmed tasks in an efficient way. Automation and artificial intelligence are highly in demand and preferred by lots of accounting firms for many reasons. For one, adding AI to accounting operations is reducing human errors and increases the quality of operations. Additionally, an accounting business becomes more attractive to customers when it applies automation in accounting-related operations and processes. Finally, AI and automation allow the accounting sector to support innovative ideas and provide flexible schedules to employees. For example, AI and automation are allowing staff members to work remotely and complete mundane tasks at a faster pace.

Robotic process automation allows machines to do time-consuming and numerous accounting operations in a more efficient way. Intelligent automation can mimic human interaction in several accounting operations such as using historical data to perform an activity (Anagnoste, 2018). AI and automation help in indicating the real-time status of financial matters since they can process documents using natural language processing. NLP (Natural Language Processing) is a division of AI that enables machines to recognise the human language and translate the input into text.  Artificial intelligence and automation will enhance numerous internal accounting processes such as invoicing, buying orders, expense reports, accounts payable and receivables, procurement and purchasing, and many other time-consuming and complex tasks. There are several internal corporate, local, state, and federal regulations that must be followed by accounting firms while working with automation and AI technology. Artificial intelligence makes auditing processes easier and more efficient and easier along with associated laws and regulations. To minimize fraud issues and human errors, accounting firms must implement AI and automation.

Reducing Human Errors and Increasing Quality

The history of the accounting industry indicates that businesses were running on a traditional approach where an accountant is hired to do all accounts-related operations and handle multiple processes simultaneously. In the past, accountants relied on figures and physical databases. With the invention of the expert system and the automation of data processes, business owners can easily make strong decisions based on accurate financial information (Kaya et al., 2019). The expert system integrates the knowledge of one or more human experts and consequently, businesses are delivering quality of services they provide in the areas of internal control, identification, and evaluation of audit risk and audit planning. Accounting firms are now embracing AI and automation technology to make business operations efficient and transparent.  

At present, the application of the expert system has occupied a robust place in the accounting industry. An expert system is a computer system that is used to reproduce and match the actions of a human expert in making decisions. These systems are designed to solve and simplify complex problems in an easier way to understand and analyse repercussions. Financial accounting, taxation, auditing, management accounting, and personal financial planning are some major categories of expert systems. Automation of accounting processes is a major and important change in the market. Artificial intelligence and robotic process automation are two very distinct technologies, but both make a great impact on auditing and accounting practices. Automation is rapidly evolving from a process-driven flow to a more data-driven flow. Robots in the accounting sector are replacing humans and providing multiple services to complete complex tasks. Accounts payable and accounts receivable, customer data, validating and posting payments, creating invoices, billing, collection, matching invoices against purchase and sales, period-end closing, general ledger, consolidation, inventory management, cash management, travel and expenses, payroll, tax accounting, and many more accounting industry-related operations are being easily and efficiently done by automation. The accountant who monitors, understands, and enhances cognitive and analytical processes of accounting is being gradually replaced by automation and artificial intelligence. Consequently, AI and automation are going to completely replace accountants from the industry. Blockchain technology is making a huge change in the accounting sector and providing a more efficient distribution and decentralisation of database technology. It will help accounting businesses in protecting every transaction with higher encryption and maintain an expanding list of transactions among all parties. 

Automation and artificial intelligence can perform several key accounting tasks such as monthly or quarterly close, procurement, accounts payable and receivable, audits, expense management, and chatbots. The 21^st century accountants are adopting automation at a faster pace. They are enhancing their professional skills, management skills, analytical skills and other relevant skills to complete accounting tasks with the help of automation and artificial intelligence. This helps to increase sustainability and productivity in accounting operations and processes. Professional skills, management skills, computer skills, analytical skills, decision-making skills, and other relevant skills are some abilities that accountants are improving for more sustainability and productivity in accounting operations and processes. A lack of professional skills is the most important issue that is creating a major gap in the accounting sector (Dosmanbetova et al., 2020). Therefore, accountants must constantly work to improve their professional skills to meet industry requirements and set new standards. Digitalization is the present hallmark of the present era of big data in accounting and other industries. The importance of computers has been recognized in the past paper accounting system, the present paperless system, and computerised accounting.

Flexibility and Innovative Ideas for Accounting Firms

Accountants are particularly compelled to improve their analytical and decision-making skills. They have to upgrade their skills to align with present industry standards and innovative technology. Accountants must analyse accounting statements a lot of financial information. It is very important to analyse risks reasonably, accurately, and efficiently. The advent of robotic process automation means that should actively be ready to alter their thinking process, abandon the function of traditional accounting, and adapt to the current trends. Management skills are also the major property that’s going to affect the accounting sector in the long term. At present, AI and automation help the accounting sector by recording fewer financial fraud issues, improving the quality of accounting information, promoting the reform of traditional accounting and auditing.

The future is all about artificial intelligence and automation. Every business will be able to transition many business functions to auto-pilot mode with the latest technology. AI and automation are some of the innovative technologies that will be used on top priority in the future. Integration of AI with machine learning and natural language processing makes it a powerful, cutting-edge technological tool that has the power to transform. The four giants of the accounting industry (Deloitte, EY, PwC, and KPMG) have already adopted AI and automation in their business processes and operations. The future of the accounting profession supported by artificial intelligence looks bright. Reports predict that from 2021 to 2026, the accounting industry will register a CAGR (Compound Annual Growth Rate) of 30% with the implementation of artificial intelligence and automation (Ahangar & Öztürk, 2019).

The Asia Pacific is going to become the largest accounting automation region and the entire world will be covered with automation and AI. As the stats depict a positive side of automation in the accounting sector, it is going to be very helpful for accounting businesses. With the adoption of AI and automation, business owners will have a competitive and leading edge in the industry. All accounting processes and practices will be more efficient and faster overall (Munoko et al., 2020). Clients will reach desired outcomes faster and companies will observe record-breaking growth and performance. Elimination of fraudulent transactions and issues, in-depth financial analysis, and easier data input are the top factors propelling the use of AI and automation in the accounting industry. The blockchain technology will provide more clarity of assets and obligations to accountants. It helps in maintaining a ledger of accurate financial information with higher precison, accuracy, and efficiency rate. Communication and examination of financial information becomes easier with the implementation of blockchain technology in the accouting sector.

On the other side, the likelihood of machines replacing humans is very high in the accounting sector because machines can complete the work without any errors, in a shorter amount of time, and without missing deadlines.  Automation also makes the audit process more transparent and secure. The digitalization of the accounting sector will empower businesses to identify which user accessed a file and the exact time and date. Automation directly benefits the accounting sector in increasing the accuracy and the efficiency of audits and makes it possible to audit complete financial transactions of an enterprise (Ahangar & Öztürk, 2019). This means accounting firms will require more attention on their applications and improvements. Artificial intelligence makes accounting transactions easier as machines can check receipts, review expenses, and warn people if any malicious activity is being recorded and if the system is breached.

Evolving Impact and Future of Automation and AI

Many accountants face lots of issues in the invoice management process that takes up lots of their productive time. It is very important for accounting businesses to reduce the time spent completing a particular process and operation. Artificial intelligence and automation make the invoice management process more transparent and efficient which can make accounts payable or receivable more streamlined with the help of digital workflow. For example, the EY Digital Audit is a connected, data-driven audit that takes benefit of organizations’ digitalization process by tapping into the sheer volume of data generated by new technologies to effectively deliver high-quality audits. In the future, accountants will likely work in a completely AI-based environment they can read documents such as sales and lease contracts, perform trend analysis and recognize outliers.

Conclusion

The importance of automation and artificial intelligence in the accounting sector is clear. Adding AI to accounting operations would lead to reducing human errors and increasing the quality of operations. An accounting industry-based business becomes more attractive with the application of automation in basic to advanced accounting related operations and processes. Automation and artificial intelligence are highly in demand and preferred by lots of accounting firms. It also includes traditional and present trends in the accounting industry. At present, the application of expert systems has occupied a robust place in the accounting industry. Financial accounting, taxation, auditing, management accounting, and personal financial planning are some major categories of expert systems.

The report also explained how accountants are going to increase their productivity rate with the implementation of automation and AI. It gave insights into future trends of automation and AI in the accounting sector. Automation makes the audit process more transparent and secure. The digitalisation of the accounting sector will empower businesses to identify which user is accessing a file and at what time. Automation directly benefits the accounting sector in increasing the accuracy and efficiency of audits and makes it possible to audit complete financial transactions of an enterprise. As the future will be going to of AI and automation, it means accounting firms will require more attention on their applications and improvements.

References

Ahangar, R. G., & Öztürk, C. (2019). Introductory Chapter: Some Current Issues on Accounting and Finance. In Accounting and Finance-New Perspectives on Banking, Financial Statements and Reporting. IntechOpen. https://www.intechopen.com/chapters/70035

Anagnoste, S. (2018). Robotic Automation Process–The operating system for the digital enterprise. In Proceedings of the International Conference on Business Excellence (Vol. 12, No. 1, pp. 54-69). https://sciendo.com/pdf/10.2478/picbe-2018-0007

Dosmanbetova, A. S., ??dykhanova, ?. ?., & Sadykova, R. B. (2020). Current Issues of Accounting and Evaluation of Financial Instruments in Accordance with Internal Financial Reporting Standards of Social and Human Sciences, 206. https://nauka-nanrk.kz/assets/assets/%D0%B6%D1%83%D1%80%D0%BD%D0%B0%D0%BB%202020%204/social%20science_4_2020.pdf#page=206

Kaya, C. T., Türky?lmaz, M., & Birol, B. (2019). Impact of RPA technologies on accounting systems. Mushasebe ve Finansman Dersgisi, (82). https://www.researchgate.net/profile/Burcu-Birol/publication/332123847_RPA_Teknolojilerinin_Muhasebe_Sistemleri_Uzerindeki_Etkisi/links/60153d7e92851c2d4d0337d3/RPA-Teknolojilerinin-Muhasebe-Sistemleri-Uezerindeki-Etkisi.pdf

Moll, J., & Yigitbasioglu, O. (2019). The role of internet-related technologies in shaping the work of accountants: New directions for accounting research. The British Accounting Review, 51(6), 100833. https://www.sciencedirect.com/science/article/abs/pii/S0890838919300459

Munoko, I., Brown-Liburd, H. L., & Vasarhelyi, M. (2020). The ethical implications of using artificial intelligence in auditing. Journal of Business Ethics, 167(2), 209-234. https://link.springer.com/article/10.1007/s10551-019-04407-1