a new research report hints at future opportunities for accountants.
by hitendra patil
client accounting services: the definitive success guide
openai, the creator of the wildly popular artificial intelligence (ai) tool chatgpt, conducted a new research study with the university of pennsylvania. it identified the occupations with the most significant impact potential because of large language models (llms, like chatgpt). among the occupations with the highest exposure to ai are accountants, auditors and tax preparers!
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what does it mean?
1. to quote some (edited somewhat for more straightforward reading) of the essential notes from the research:
- which occupations will see gpt-powered software saving workers a significant amount of time completing a task while maintaining equivalent quality? workers facing higher (lower) barriers to entry in their jobs tend to experience more (less) exposure to llms. (gpt = generative pre-trained transformer.)
- current llms are less likely to impact occupations requiring science and critical thinking skills.
- accountants, auditors and tax preparers are among the occupations with the highest exposure, i.e., among those estimated where gpts and gpt-powered software can save workers a significant amount of time completing a large share of their tasks, but it does not necessarily suggest that these technologies can fully automate their tasks.
- a comprehensive understanding of the adoption and use of llms by workers and firms requires a more in-depth exploration of these intricacies.
2. to give it a perspective from the accounting profession’s point of view:
- when billions of dollars and countless programming hours go into creating an ai system, it is not easy for any non-technical, non-engineer user to fathom the true capabilities of such a system. as a result, users tend to go by the “user experience” of parts of the system, not by the full capabilities of the system.
- given this narrow span of user experience, users can draw quick conclusions about their understanding of such systems, but only in terms of what they see the system is doing, not what it is capable of doing.
- accounting, audit and tax are well defined, well regulated, well documented occupations despite the complexities. a lot of math, data and computing are involved in producing revenue-generating work in these occupations. by the very nature of the technology, ai is a very potent tool to assimilate all the complexity much faster than we can imagine.
- ai can unleash levels of efficiency and productivity that the accounting profession has not yet witnessed.
- ai can potentially provide a much-needed solution to the accounting profession by reducing the insane hours accountants have to work periodically. it may be the platform to address the talent shortage in the long term.
- just like how automation, optical character recognition (ocr) and unprecedented levels of cloud integration made possible between several disparate software solutions transformed the “work” accountants did (gradually minimizing manual data handling), ai can transmute the work accounting professionals do today.
- clients’ reliance on the knowledge stored in accountants’ brains can shift to that stored in ai systems, except possibly for complex situations. nevertheless, technology companies will likely continue to empower accountants’ clients with ai powers.
the real message
while the findings from the report warrant a serious examination to prepare for your ai future, it is critically important to recognize the telltale hint in the report.
the report mentions that the research was based on the employment and wage data from the occupational employment series provided by the bureau of labor statistics – and most likely, the occupational descriptions, i.e., what is the work done by people in those occupations.
i am sure you will agree that those occupational descriptions need immediate updating to truly reflect what accountants, auditors and tax professionals do in today’s world. in other words, the findings in the report about exposure to ai may be at least somewhat biased based on the occupational descriptions.
and therein lies the real message.
the tasks mentioned in the current occupational descriptions are the ones that you would want to automate on priority and move onto the next frontier, i.e., how will you help/guide/advise your clients to utilize the outcomes of automation and ai?
when will the real impact be felt?
according to the research report, it can depend upon the following:
- the level of trust humans will have in such systems and how people adapt their habits will play a factor.
- the cost and flexibility of the technology, worker and firm preferences, and incentives also significantly influence the adoption of tools built on top of llms.
- adoption may be driven by progress on some of the ethical and safety risks associated with llms: bias, fabrication of facts, misalignment, etc.
but when it comes to the accounting profession, these factors may not apply equally. and one of them could be the reliance of regulators on the integrity of the most trusted advisors, i.e., accountants, to ensure compliance. it would be interesting to watch how regulators respond to the progress of ai. another factor could be how ai gets marketed to the end clients of accounting firms and how economically viable clients will find such tools to be. these are just some starting thoughts as the research was released a few days ago, but it also points to several new opportunities that will emerge for accountants.
the key to your response to ai
there is some good news:
- ai has inherent inadequacies such as biases, black-box effect and even hallucinations! some such “traits” may mean clients will need accountants to protect them from such challenges.
- ai’s huge potential to liberate humans from the data drudgery called work may mean the liberation of accountants to be able to leverage their true expertise and charge what they are truly worth.
- ai will not be able to compete with you in how clients experience your human competencies.
waiting and watching can lead to a struggle to keep up. ai is progressing rather rapidly. the starting point is to understand how ai is created, how it “learns” (on its own) and how it works. and the good news is that you do not need to be a programmer to learn the basics.