In the contemporary landscape of technological advancements, the role of Artificial Intelligence (or AI) has sparked debates across the society including our fraternity of Chartered Accountants. A vast majority view AI as a threat, anticipating a gloom & doom scenario while a few perceive it as a powerful tool. While the fears based on the traditional debates of man-machine conflict alongwith the emotive issues of loss of employment as also the particularly challenging aspect of reskilling are not wholly unfounded, History shows that technological advancements tends to create newer opportunities as well. In this article, we delve into the perspective that AI is not a threat but a tool that requires adaptation, drawing parallels with how an older generation of our fraternity of Chartered Accountants embraced computers for bookkeeping, statutory filings and numerous other tasks. We also explore the synergy of Human Intelligence and AI and of a possible Collaborative approach of Human and AI thriving together. We identify AI Literacy as the need of hour for the fraternity and explore potential illustrations where AI can be integrated in our workflows.
परिवर्तन संसार का नियम है |
– गीता सार
EMBRACING CHANGE: FROM BAHI-KHATA TO ACCOUNTING ON COMPUTERS
The advent of Computers marked a transformative era for our fraternity. Initially met with skepticism and the usual refrain in adapting new technology, our fraternity was quick to catchup with, as we realised the efficiency and accuracy computers brought to our tasks. From reshaping traditional bookkeeping to embracing the world of accounting softwares and ERPs and learning to navigate through spreadsheets for financial reporting and auditing, and communicating on email to efiling & eproceedings, our fraternity has adopted it to the extent that today “Computer Literacy” & “eLiteracy” are recognised as essential skills for a Chartered Accountant.
We believe that similarly AI is a new frontier in technology, offering newer capabilities beyong the routine and mundane. Rather than fearing AI as the unknown stranger, our fraternity today needs to understand its potential applications and integrate them in our workflows just as an older generation among us embraced change : from manual record keeping on uniqutious ‘bahi-khata’ to accounting on computers.
THE SYNERGY OF HUMAN INTELLIGENCE AND AI
A contrarian approach to the narrow prism of viewing AI as a standalone entity, of humans versus machines is exploring the immense potential of the synergy of Human Intelligence and AI by leveraging the strengths of both to enhance overall efficiency, decision-making, and innovation. Lets explore how this synergy could play out in our profession of Chartered Accountancy:
1. Data Processing & Analysis :
• Human Element: Interpretation of nuanced financial data, understanding business strategies, and making strategic recommendations require human intelligence.
• AI Contribution: AI excels at processing large volumes of data quickly, identifying patterns, and performing complex calculations. It can assist accountants in data extraction and preliminary analysis.
2. Augmented Decision Making:
• Human Element: Chartered Accountants bring deep domain knowledge, experience, and contextual understanding to the table.
• AI Contribution: AI provides data-driven insights, predictive analytics, and risk assessments. It processes vast datasets at high speed, aiding accountants in making more informed decisions.
3. Automation of Routine Tasks:
• Human Element: We can focus our efforts and energy on strategic planning, client interaction and advisory roles when freed from mundane and repetitive tasks and also a more work-life balance.
• AI Contribution: Automation through AI will handle routine tasks and basic procedures such as data entry, reconciliation and compliance checks while reducing manual efforts and errors freeing up Humans to concentrate more on tasks that require analytical ability and critical thought-process.
4. Risk Management, Problem-Solving & Human Creativity:
• Human Element: Identifying nuanced risks, especially those tied to human behavior or unforeseen circumstances, requires human judgment. Similarly, Complex problem-solving, innovation, and creativity are inherently human capabilities.
• AI Contribution: AI contributed to Risk management & problem solving by analyzing historical data to identify patterns and potential risks and data-driven insights.
5. Ethical Considerations and Judgement:
• Human Element: Ethical decision-making, considering broader business contexts and social responsibilities, requires human judgment.
• AI Contribution: AI systems lack a moral compass. Human accountants play a crucial role in ensuring that AI applications adhere to ethical standards, preventing unintended biases or misuses.
In our profession of Chartered Accountancy, the successful integration of AI involves recognizing the complementary nature of human and machine capabilities. By embracing this synergy, we chartered accountants can enhance our roles as strategic advisors, ethical decision-makers, and creative problem-solvers, ultimately providing more value to our clients and businesses. The future of our profession lies in the collaborative partnership between human intelligence and the capabilities that AI brings to the table.
THE COLLABORATIVE APPROACH : HUMAN & AI THRIVING TOGETHER
A symbiotic relationship between Human Intelligence and AI which reflects not competition but rather a fusion of strengths will present a paradigm shift in our approach. A collaborative approach where human expertise merge with the capabilities of AI (tools) will redefine the landscape of our profession. We, Chartered Accountants, bring to the table deep industry knowledge, ethical judgment, creativity, and adaptive thinking. Our role extends beyond data crunching to strategic decision-making, client communication, and problem-solving—areas where human intuition and nuanced understanding are indispensable. On the other side, AI contributes by automating routine tasks, processing vast datasets swiftly, and providing data-driven insights for informed decision-making. From predictive analytics to continuous monitoring and risk assessment, AI augments our analytical capabilities.
TRANSITION TO AI : THE LEARNING CURVE
Embracing AI entails navigating a learning curve akin to historical transitions in the accounting profession. Training programs and continuous learning initiatives become crucial elements of this transition. AI literacy for our fraternity is a dual journey encompassing both theoretical knowledge and practical proficiency. We need to develop understanding of the fundamentals of AI, exploring basic AI concepts, gaining insights into process automation, machine learning algorithms, natural language processing, etc and grasping its potential applications in our specific workflows will lay the groundwork for informed decision making and implementation. Equally crucial is the practical dimension of AI literacy. Active participation in workshops to get an hands on approach to using AI tools in real-life scenarios. Engaging with practical applications not only reinforces theoretical knowledge but also hones the skills needed to integrate AI seamlessly into our workflows.
ILLUSTRATIONS: POTENTIAL USE OF AI IN OUR WORKFLOWS
1. ACCOUNTING AUTOMATION
Automated Data Extraction: AI tools can be employed for the automated extraction of financial data from various sources. For instance, an AI-powered tool can extract relevant information from invoices, receipts, and bank statements, eliminating the need for manual data entry. This enhances accuracy / reduces errors.
Robotic Process Automation (RPA): RPA can be utilized to automate repetitive and rule-based tasks. For example, RPA can reconcile accounts, validate data, and generate reports without human intervention. This ensures consistency in routine accounting processes.
2. ANOMALY DETECTION & FRAUD PREVENTION IN AUDIT
AI algorithms can analyse large datasets to identify irregular patterns or outlier transactions, which maybe indicative of fraudulent activities. These alerts triggered by AI tools can be early warning signs of potential fraud or errors / deviations in financial trandactions requiring further investigation.
3. FINANCIAL REPORTING
AI tools revolutionize Financial Reporting by automating data collection from disparate systems, streamlining consolidation, and enabling real-time reporting. The result is visually engaging and interactive dashboards that represent complex data with clarity, facilitating quicker and more informed decision-making.
4. FINANCIAL FORECASTING & PREDICTIVE ANALYSIS
Through the analysis of vast datasets spanning company and industry parameters, AI excels in providing highly accurate predictions of future trends. This surpasses traditional methods, offering a more nuanced and data-driven approach to financial forecasting and predictive analysis.
5. NATURAL LANGUAGE PROCESSING (NLP) FOR REVIEWING TEXTUAL DOCUMENTS
AI, specifically NLP, is utilized for reviewing textual documents such as contracts and statutes. NLP algorithms can understand and interpret the content of these documents, extracting key information and identifying relevant clauses. This expedites the review process, ensuring a more efficient and accurate analysis of legal and contractual documents.
CONCLUSION : SHAPING A TECHNOLOGICALLY AUGMENTED FUTURE
I conclude by asserting that my argument that AI is not a threat but tool echoes historical precedents of evolution. There exist, easy to recognise, parallels between the adoption of computing power & embracing the digital era by our fraternity to the potential of adoption of AI & integrating it within our workflows. Chartered Accountants and AI can thrive together if we proactively adopt a collaborative and synergetic approach to AI embracing its speed and precision with our own human ingenuity and ethical considerations.
—-
This article has been previously published in Souvenir titled “prajna” by The Central India Regional Council (CIRC) of The Institute of Chartered Accountants of India (ICAI) circulated alongwith their 43rd Regional Conference dates 23 & 24th December, 2023. (pages 73-76)
CA Nirmal Ghorawat's Blog 