Robots are coming to the accounting industry — here's how to prepare

Rachel Grimes

There’s been quite a lot of speculation recently that the growing sophistication and pervasiveness of artificial intelligence will decimate the ranks of the professional services industry, with accounting particularly endangered. Indeed, a 2013 Oxford University study listed accountants and auditors as among the most threatened by computers, and a 2016 McKinsey report predicted that 86 percent of the work done by bookkeepers, accountants, and auditing clerks, had the technical potential to be automated.

And yet, as impressive and powerful as these new technologies and machines are—and they’re becoming more so all the time—I believe they’re an opportunity to be embraced by accountants.

Computers and software have evolved to a point where they can populate spreadsheets, crunch numbers, and generate financial statements and earnings reports more quickly and accurately than any human accountant. In fact, machines are already taking on many of an accountant’s old, routine, administrative chores—on-line tax returns, and book-keeping software, are great examples of routine work that accountants no longer have to do.

This is a good thing. It is already allowing for human accountants to be more sophisticated advisors and planners. In this way, technology can be best used as a tool that gives humans more space to focus on analysis, interpretation, and strategy. In other words, computers have enormous potential to empower—rather than displace—accountants.

We’ve seen this evolution in many other industries. I recently had the opportunity to visit IBM’s New York office, where I witnessed the power of Artificial Intelligence first hand in the medical industry. Call me old school, but I’m not yet ready for the day when a robot takes the place of my doctor. However, what I saw at IBM has incredible potential. Watson – IBM’s supercomputer – has been able to read and retain millions of pages of medical journals and research in a way that a human doctor cannot. This allowed for the machine to spit out potential diagnoses – even the rare ones that might not come to mind immediately – in record time once armed with a person’s symptoms.

With this information, the doctor can get to work treating the patient faster, and the time saved can be the difference between life and death. Still, in the end, a human doctor is needed to ask the relevant questions and add the judgment that a machine can’t offer. So the doctor’s job isn’t going anywhere anytime soon. But with the help of AI, he or she can do it better.

In the future of accounting, humans will be the end users of the information generated by AI in the same way that doctors are. Accountants will offer the human judgment that can’t be automated: What is material here? What new insight does this mean for the client’s business?

'Robots are coming, rejoice!'

Take for example the role of the profession in understanding and advising on global regulation. Following the financial crisis, we witnessed a significant increase in regulatory vigilance – from new Basel Accord regulations to Dodd-Frank and countless other new laws. Complying with this complex tangle of international regulations will require a nuanced understanding of both the spirit and the letter of these laws—a task to outwit even the smartest software. Technology can’t make the judgment call on what is needed to comply, but it can provide real-time compliance considerations that allow accountants to make more strategic recommendations.

As such, I say to the industry: robots are coming, rejoice! Clients will continue to look to human accountants for advice and foresight, not for just an accurate account of information that a machine will provide. Good accountants are—and have always been—proactive, rather than reactive. This is will not change anytime soon.

We can prepare for the new technological age by updating the way accountants are educated and trained. We need to address an ongoing skills gap in the profession by emphasizing strategic thinking and, above all, ethics and leadership. Together, we can create new and innovative ways for smart humans and intelligent machines to complement each other.

It’s something I and the International Federation of Accountants Board will be focusing on with our new technology advisory group and policy team. The future is coming and the accounting profession is ready.

Rachel Grimes is President of the International Federation of Accountants (IFAC) and is currently Chief Financial Officer, Group Technology Finance at Westpac Group, a multinational financial services firm. She has been in the Financial Services industry for over 25 years and is based in Sydney, Australia.

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