April 21, 2023
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Accountants vs. Robots
Here’s a Wall Street Journal article from last month that got virtually everyone in the accounting world to freak out a little:
Accountants are among the professionals whose careers are most exposed to the capabilities of generative artificial intelligence, according to a new study. The researchers found that at least half of accounting tasks could be completed much faster with the technology.
The same was true for mathematicians, interpreters, writers and nearly 20% of the U.S. workforce, according to the study by researchers at the University of Pennsylvania and OpenAI, the company that makes the popular AI tool ChatGPT.
Here’s the paper, and on page 16, it shows a table of different occupations, and yep, tax preparers, accountants, and auditors all have 100% exposure. What does “exposure” mean? The table’s description explains:
Exposure percentages indicate the share of an occupation’s task that are exposed to GPTs or GPT-powered software, where exposure is defined as driving a reduction in time it takes to complete the task by at least 50%.
Ok, sure, yes, but also, I wouldn’t blame anyone for saying, “People have been freaking out about technology automating accountants away for quite a while.” A Kevin Roose column in the New York Times entitled “The Robots Are Coming for Phil in Accounting” is from two years ago. Here’s an article I wrote on Going Concern about it in 2015. And when spreadsheets first started emerging in the late 1970s and early 1980s, accountants worried then, too. But a funny thing happened after the spreadsheet came out, though. It actually created accounting jobs instead of eliminating them. So that was a pleasant surprise.
Is it different this time? Are the robots here for real, and accountants, yes, let’s freak out? Sure, maybe. But remember how everyone is worried about how there aren’t enough accountants? I wonder if ChatGPT picked up the slack left by the dearth of accountants, maybe everyone would calm down a bit.
Jeremiah Contreras, a Teaching Assistant Professor at the University of Colorado Boulder’s Leeds School of Business who has been incorporating ChatGPT into his classes, told me that there’s broad agreement that accounting and finance jobs are understaffed. “There is a chance that AI will be able to do 50% of the work, but we are currently at a deficit far greater than that,” he said. “[Tools like ChatGPT] will provide opportunities to gather and analyze more information and make judgments on that analysis that goes beyond our current bandwidth.”
There are more than a few accounting practitioners who are open to the possibilities that ChatGPT and similar tools will present.
Jason Staats, the founder of Realize, a community of accounting leaders, said in a recent podcast about the rapid improvement of the technology, “I don’t know if I’m pro-AI […], but something is happening, so I don’t know if it makes sense to be dismissive of it.” He goes on to say, “Trying to be opinionated about [it] takes away from what I’m excited about, which is, man, how can this make my life better? How can this get back to actually helping people?”
For the last several months, I’ve written many times about the shortage of accountants and how this is impacting firms and their ability to serve clients. You know, helping people. It does seem a little ironic for people to wring their hands about all the work that needs to be done and then express concern or doubt about a tool that could help do it, doesn’t it? I mean, if robots are going to take some of these accounting jobs, maybe they could hurry up already?
“Ultimately AI won’t replace accountants, accountants using AI will replace accountants not using AI,” Staats wrote to me in an email. “And for all the overworked accountants out there, it can’t come soon enough.”
Can ChatGPT replace an accounting blogger?
I was unsure, so I pitched ChatGPT an idea. Sorry, prompted: “Write 200-300 words about a recent trend in the accounting industry. Use sarcasm.”
Here’s what ChatGPT came back with:
Oh boy, where do I start with the latest trend in the accounting industry? It’s hard to pick just one because they all seem to be so incredibly fascinating. Let’s see… Ah yes, how about the trend of “innovative” accounting software?
I mean, who needs those old-fashioned spreadsheets and calculators when you can have an AI-powered robot do your accounting for you, right? Because let’s be honest, who wants to hire a qualified accountant with years of experience when you can just have a machine do the work for you?
And don’t even get me started on the “real-time” data analysis. Who needs to wait for monthly or quarterly reports when you can have a constant stream of data at your fingertips? It’s not like there’s any danger of information overload or anything.
But wait, there’s more! Have you heard about the trend of “outsourcing” accounting services? Why bother having an in-house accounting team when you can just hire a firm in another country to do it for you at a fraction of the cost? Who cares about communication barriers, cultural differences, or potential security risks? It’s all about the bottom line, right?
And let’s not forget the latest buzzword in the accounting industry: “blockchain”. Because nothing screams “accounting” like a decentralized digital ledger system, right? Who cares about the potential for errors or security breaches when you can have a trendy new technology to brag about?
All in all, the accounting industry is clearly on the cutting edge of technology and innovation. Who needs old-fashioned things like human expertise, communication, and security when you can have robots, real-time data, outsourcing, and blockchain? Keep up the great work, accounting industry!
Um, could be better? As has been noted by others, when it comes to irony, humor, and all-around wit, ChatGPT simply tries too hard. Maybe my standards are too high? Or maybe, in this case, it’s because I am the standard.
But also, I was crunched for time, so sure, this will do.
How’s the EY split going?
Guys! It’s really not going well!
Accounting firm EY has called off a plan to break up its audit and consulting units, slamming the brakes on a proposed overhaul of its businesses that was meant to address regulatory concerns over potential conflicts of interest.
Ok, so the deal’s off, so you know what’s coming next, right?
Ernst & Young said Monday that it would eliminate roughly 3,000 jobs from its US workforce as it pivots to address shifts in demand and “overcapacity” in sections of its business.
The cuts represent less than 5% of the US firm’s total workforce. EY described the workforce reduction as “part of the ongoing management of our business” and said it didn’t stem from the firm’s recent failure to implement a global breakup.
Oh, so just a coincidence then? Don’t you hate that? Speaking of bad timing, NICHT JETZT, EY GERMANY:
EY has been banned from taking on any new listed audit clients in Germany for two years over failures in its work for collapsed payments company Wirecard.
I think that just about does it for this section of On the Margins. We appreciate your support.
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