The ACA syllabus uses the ‘ABCD’ acronym to summarise the most impactful emerging technologies. In the first of a new series, we get the lowdown on artificial intelligence and automation, and what they mean for you.
It’s easy to think of artificial intelligence (AI) as new technology, but it’s been around for a long time – and most of us are already using it, whether that’s Alexa, planning a journey with Google Maps or following recommendations on Netflix. With the launch of ChatGPT OpenAI’s free-to-use chatbot, at the end of 2022, however, “AI has become more accessible and a bit more real, because you can interact with it in a slightly more humanlike way,” explains Ian Pay, Head of Data Analytics and Tech at ICAEW.
The terms are sometimes confused, but there’s a fairly clear distinction between AI and automation, Ian says. “Generally speaking, automation tends to be very rules-set, following ‘input-process-output,’ with linear activities that have a clear beginning and end,” he explains. “AI tends to be more cyclical, adaptive or evolutionary in nature. An AI tool will generally improve over time, while an automation tool will just do the same thing over and over until you tell it otherwise.”
When it comes to what students need to learn in terms of AI and automation, “We’re certainly not expecting you to be experts,” Ian says. “What we are expecting is that there’s an awareness of what the technology is capable of, and the risks that surround it.” There’s a lot being done at ICAEW to support students and members in AI, Ian adds. “We’ve got some generative AI guidance out, which we’ve tried to make as accessible as possible for all backgrounds.”
We’re certainly not expecting you to be experts. What we are expecting is that there’s an awareness of what the technology is capable of, and the risks that surround it
What are the opportunities?
AI is already being used in accountancy, particularly in audit, where the technology is well suited to tasks such as spotting discrepancies in financial records. “Invoice matching and anomaly detection is a classic AI use case,” says Ian. “But we’re increasingly starting to see the more generative tools being used to help view complex documents and tap into knowledge repositories. Rather than spending hours trawling through a huge database of information, you can ask a question and it will give you an answer.” It’s also making its way into the small business end of the accounting space, with Xero, QuickBooks and Sage all recently announcing the integration of AI assistants into their applications.
“These are going to be game-changing solutions with massive productivity gains,” believes Ian. “They’re not doing anything that you couldn’t do yourself, but rather than you spending time trying to find which overdue invoices you need to chase, you can ask the tool to do it for you. And it will not only go away and find the overdue invoices, but will also draft the emails and do the whole thing for you. Automating the slightly more mundane, repetitive tasks means that you can spend much more time working on the insights, the reporting and the analysis that add more value to a business.”
As a result, the chartered accountants of the future will be much more engaged with clients and their businesses, supporting, advising, shaping – and, most importantly, looking to the future. “Accountants traditionally have a reputation for being backward-looking – focusing on what’s already happened,” says Ian. “The opportunity that AI affords us is the ability to start looking more to what could happen in the future, using the technology to support more sophisticated modelling procedures.”
Automating the slightly more mundane, repetitive tasks means that you can spend much more time working on the insights, the reporting and the analysis that add more value to a business
What are the risks?
“There’s this thing called automation bias, which essentially says that it is human nature to trust the output of systems and technologies. The problem is that AI is fallible,” explains Ian. “There’s a lot of talk at the moment about bias, but bias is not an AI-specific thing – it’s a human thing.”
This is why understanding the technology’s capabilities and limitations is so important – and why being able to apply professional scepticism is crucial. “When you’re learning about the concepts of bias, critical thinking and scepticism as part of the qualification journey, it’s also thinking about how that applies to technology. If you’re an auditor, your main purpose is to assess whether financial statements are accurate. And in the course of doing that, you’re reviewing evidence you’re provided with and deciding whether that evidence is right or wrong, sufficient or insufficient. When you’re looking at the output from an AI solution, it’s really no different.”
Rather than seeing AI as a fool-proof solution – and a potential replacement for people – think of it as just another input in the decision-making process. “There’s a notion that AI is going to take jobs away, and students may worry they’re going into a profession that’s declining. Far from it. It’s a profession that needs the human element more than ever,” Ian says. There’s a reason why AI tools are called ‘assistants’, ‘companions’ and ‘co-pilots’, he adds. “They’re designed to work with you and support you, not do your job for you.”
If you’re an auditor, your main purpose is to assess whether financial statements are accurate… When you’re looking at the output from an AI solution, it’s really no different
Where next?
The launch of ChatGPT triggered a huge AI ‘hype curve’, says Ian, one that is now dropping off as the technology’s limitations are challenged. “I think we’re going to bottom out pretty soon and then we’re going to start that gradual climb and see the really established, integrated use cases for AI that actually start stitching everything together.” The other big topic is ESG, and how AI can be used to come up with innovative solutions to some of the environmental challenges we’re facing. “The flip side is that all these AI tools are incredibly energy intensive, so there will be a challenge on organisations to look at how they can make it run more efficiently.”
The big technology players are a great place to start for anyone interested in finding out more about AI. “If people want to go out there and be curious – which I always advocate for – the likes of Amazon, Google and Microsoft have made a lot of training available for free,” Ian says. “So if it’s something you’re interested in, I would really encourage you to go out and explore some of that content, because it’s good-quality stuff.”
Of course, there’s also the ICAEW website, a source of reliable, relevant information and guidance that is being added to all the time (try the recent webinar on prompt engineering). The profession is already on a good footing in terms of the use of AI, believes Ian. “We’re seeing some excellent progress happening, and really putting to shame the idea that accountants can be a bit behind the times,” he says. “The profession is doing really well at keeping pace with what’s happening in the world, and students should be genuinely excited about the opportunity AI presents.”
Learn more by reading ICAEW’s explainer of artificial intelligence and machine learning here.