The Bottom Line on Bots
The bots aren’t coming for accounting and finance professionals, they’re already here.
Any accountant or auditor who has ever asked Amazon’s
Alexa about the weather or Apple’s Siri for restaurant
recommendations (and received a remarkably good
answer) probably has an understandable and reasonable
reaction regarding the acceleration of artificial intelligence
(AI) into the accounting and finance profession: fear.
But AI and robotic process automation (RPA) are two terms,
two technologies, that today’s accounting and finance
professionals must come to know, scratch that, come to
embrace — not out of fear for one’s future professional
relevance, but for the fact that these technologies promise
to turn endless workdays for human accountants and
auditors into mere minutes of automated work.
While fear-mongering headlines and keynotes proclaim
that streamlining hours of human labor might soon remove
need for, well, the human, the companies and firms
already using these technologies to “improve client
service” might argue otherwise.
Imagine having the freedom from all those administrative
tasks — like onboarding new recruits, copywriting and
confirming contract terms, or sifting through spreadsheet
after spreadsheet and financial statement after financial
statement to audit or analyze a company’s books — to
apply your smarts, savvy, and plain old human creativity to
help your clients, colleagues, or customers think outside
the box. Well, you can have all this and more — all you
must do is trust the machines.
The bots are coming; there’s no stopping them. Hell,
they’re already here.
Consider how calculators and computers didn’t destroy accounting jobs. Excel didn’t unseat the tax preparer or corporate finance
pro. There’s a software or cloud solution for every business and finance need today, and yet the accounting and finance profession
hasn’t evaporated (though some administrative jobs have). So, what exactly is the AI and RPA threat? Modern science fiction would
lead us to believe that human-like robots will infiltrate our offices, slowly learning and mimicking our ways until one day they turn on
us in an “Ex Machina” or “Westworld” type of event. We’re not there — at least not yet.
“To describe these technologies, you have to start with describing what they are not,” says Peter Scavuzzo, CIO of Marcum LLP, a a N.Y.-based independent public accounting and advisory firm with offices in Chicago and Deerfield, Ill. “A bot is not something built or a deliverable in itself [like a physical robot]. A bot is
a digital worker [an application or algorithm] that performs tasks — ideally repeatable and procedural tasks.”
In other words, bots are behind RPA and the growing use of data analytics and digital and workflow automation tools. Natural language
processing (NLP), for instance, can read and analyze text or speech to mine specific information from contracts, emails, financial statements,
tax documents, and more.
“AI, on the other hand, is significantly different; it’s analytical and judgment-based,” Scavuzzo says.
AI, aka cognitive automation or cognitive technology, consists of algorithms that enable software to absorb information then reason and
think similarly to humans, giving human users an intelligent tool to directly interact with. Amazon’s Alexa, Apple’s Siri, IBM’s Watson,
and Microsoft’s Cortana are some of the most known AI examples. Proponents claim AI in the accounting and finance space will further
advance what automation has more or less always done: reduce errors, increase production speed, and elevate workers to more creative
(and profitable) tasks.
“AI is specifically designed to simulate human thought process and/or intelligence, but its advantage is that AI can process a large amount of
data more rapidly than humans and can deliver results more accurately,” adds Greg Fernandez, a manager in RSM US LLP’s Indianapolis office.
Just some accounting and finance areas suited to AI and RPA include accounts payable, audit, cost and data analysis, staff onboarding, lease
accounting, and tax analysis and preparation — the possibilities are quickly becoming endless, however, as these technologies can strike
through thousands of contracts, financial statements, or other documents like lightning.
“RPA frees valuable staff to be deployed to other functions requiring human judgment and innovation. It’s also a practical and cost-efficient
alternative to outsourcing,” says Robert Drover, a principal in Marcum’s advisory services division.
In the tax preparation world, NLP is helping practitioners with its ability
to produce narrative reports from reams of the most complex tax
codes and returns, and RPA is helping to thwart errors and improve
compliance with features like automated timestamping and
documentation, but AI’s abilities are stretching even further.
H&R Block made headlines when it announced a partnership with
IBM to use their AI supercomputing technology, Watson, to help their
tax professionals and clients better understand and navigate the tax
filing process. Watson can parse and interpret tax code changes in
milliseconds, “learn” the new guidance and regulations, and then
communicate the best options for filing, credits, deductions, and more
to the client or tax preparer. The more Watson is used in this setting,
the more Watson learns from H&R Block tax professionals about
navigating the tax code and finding and correcting errors and more.
Watson’s reach into the accounting and finance world continues at
KPMG. Having successfully fine-tuned and deployed Watson in its
audit practice to analyze volumes of company financial data for
anomalies, KPMG has developed two new cognitive solutions under
its partnership with IBM: The KPMG Contract Abstraction Tool, which
automates extraction of lease contract data in lease accounting by
identifying trends, patterns and relationships within the data, and
KPMG Research Tax Credit Services, which helps clients examine and
sort research documents to provide evidence of eligibility for research
tax credit subsidies and provide higher-quality documentation to
retain the credit in case of an audit.
On the human capital side of the business, accounting and advisory
firm Baker Tilly is experimenting with an AI-powered approach to
engagement staffing using Microsoft Azure. The cognitive solution,
which learns and evolves with use, sorts data points of more than
250 staffers to propose engagement teams based on factors like the
engagement type, expected length, location, desired profit margin,
staff credentials, and more, explains Waqqas Mahmood, Baker Tilly’s
director of advanced technology and innovation in Washington, D.C.
In fine-tuning the firm’s approach to staffing, Mahmood says, “We’re
learning, and so is the machine. The machine picked up on trends.”
For example, if in the first use a partner picked a Chicago staffer for
a Chicago engagement, in the next use the AI solution picked only
staffers from Chicago. Or, if it was a tax engagement, the AI solution
would only propose tax people. As the fine-tuning continues and use
increases, Mahmood says this “machine” will ultimately help cut down
the time partners and senior managers spend manually creating
staffing structures and proposing engagement teams.
EY is another firm finding creative uses for AI and RPA in managing
its human capital — it has a bot for onboarding, confirms Mark
Takacs, CISA, an executive director in EY’s assurance practice and
an intelligence automation leader in the firm’s Central region. The
bot schedules interviews, new employee orientations, trainings, and
hardware assignments, and double-checks that employees’ forms are
correct, among other HR functions. EY is also developing custom bots
for its audit practice and for clients.
Manning the Machine
“There’s always a level of intimidation with change,” Takacs says. “I
often compare this with ad hoc reporting and data warehousing. I
think there was hesitation to effectively use this technology within
various business functions, but if you look at the landscape today, I’d
say it’s something accounting professionals can’t live without.”
In time, AI, RPA, and the next generation of disruptive technologies
will also be things we can’t live without. For the skeptics, the solution
is to start small. In a recent Sage survey of accountants, 38 percent
cited time spent number-crunching as one of their biggest business
frustrations, with 32 percent still using manual methods with Excel or
handwritten notes and records. Almost all claimed they’d be “happy
for technology to make the admin elements of their job invisible, so
they can focus more on their clients and building their practice.”
“Let the complex and repetitive tasks be completed faster and
more accurately, allowing you to focus on reviews and other
activities requiring something AI does not have: common sense,”
In other words, embrace the bots, Scavuzzo urges. “As humans
provide AI systems training, the confidence level in the guidance from
the AI system should grow,” he says. “Bots are targeting the lowerend
repetitive tasks that humans now perform, and AI is targeting the
massive amounts of data available but inconsumable to humans to
better aid in making the best decisions. It’s aiding and enhancing
human judgment, not replacing it.”
What’s more, consumers are increasingly becoming more accepting
of AI, bots, and what many in financial services are calling roboadvisors.
“About half our clients are piloting [bot] technology, and
maybe 10 to 20 percent are in full production with more bots on the
way,” says Takacs, who presented on EY’s internal and external bot
uses at the Illinois CPA Society’s November board of directors meeting.
Further, a recent Accenture survey found two-thirds of taxpayers across
12 countries said that, if offered, they would use a digital tax assistant
[AI] that could address questions with conversational language and
“could, over time, become more intelligent and personal about each
taxpayer’s personal and professional tax situation.”
Within the audit profession, which is built on trust, Daragh Watson,
KPMG US audit partner in Chicago, says using these technologies is
about “assisting investors and others in making investment decisions
by providing quality financial information that has been subjected to
industry-approved auditing standards. With the explosion of data, the
ability to distinguish between which information can and can’t be
trusted is more valuable than ever.”
The bottom line is that the accounting and finance profession has no
choice but to open its arms to AI, RPA, and the likes. “It will not be a
simple shift at all,” Scavuzzo says, “yet our industry absolutely needs
to expand its consulting offering. This will open up an array of
opportunities for accountants.”
Armed for AI
In “Tax Analysis: Artificial Intelligence and Machine Learning,” PwC
claims AI may soon provide full-fledged digital assistants to replace
basic capabilities of first and second-year tax associates.
“Entry-level work traditionally performed by recent graduates will be
displaced,” Scavuzzo admits. “Ten years ago, when someone was
hired, they were expected to start at the bottom and perform tedious
tasks to earn their stripes.” Not anymore.
The coming years will see traditional accounting tasks and
skills fading from the focus of hiring. Firms will find themselves
needing to partner with, and recruit from, universities that provide a
blend of accounting and technical skills. Hiring trends are already
reflecting the shifts in firm needs; a growing number of associates
from alternative programs, such as application development,
computer sciences, data analytics, and engineering, among others,
are being brought on.
KPMG, for instance, has developed the KPMG Master of Accounting
with Data and Analytics Program with universities to accelerate the
development of talent it will need in the future.
“Of course, a foundation in data analytics and algorithms will be of
great value to all accounting and finance professionals, but I believe
there’s also a great need for a blend of skills around the next-generation
thinker,” Scavuzzo says. “This includes skills in critical
thinking, complex problem solving, innovation, creativity, cognitive
flexibility, and a willingness to accept change.”
“The new generation of accounting and finance professionals is
working in engaging and collaborative environments. The use of AI
technologies enables teams to focus on building client relationships
and creating high-value deliverables in a shorter time. This results in
more client work, which ultimately requires more humans,” Mahmood
says. “I see this increasing hiring.”
So, maybe the bots aren’t so bad after all.