British Columbia has some of the most top-rated accounting firms in the country. These accounting firms practice in the following areas:
- Audit and assurance
- Business tax
- Business valuation
- Personal tax.
Accounting firms, therefore, have a lot to offer in terms of value for any given person or company. Accounting firms provide companies and people the tools to prepare correct tax returns as well as to manage and analyze things like profits and losses. Accounting, therefore, is vital for a company’s understanding of its financial worth and can help identify weaknesses and challenges so it can address those issues as well as identify strengths and opportunities so it can maximize performance. One threat, however, that is not being discussed as much as it should be is this: artificial intelligence (AI). When we think of AI and its threat to jobs, we think of mundane jobs that require a lot of repetition and zilch in the way of thinking. That, however, may not be entirely true. AI will surely disrupt accounting firms in British Columbia — as elsewhere — but whether that disruption will all be in the form of threats to our jobs or not is debatable. In fact, the disruption could be beneficial. Here’s what accounting firms in British Columbia should be considering with regard to artificial intelligence.
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An Overview: How will AI Disrupt Accounting Firms in British Columbia
AI will and is already disrupting accounting firms in British Columbia. AI is here, and it is here to stay. Something new is always something that is feared, especially when a firm may think it is a threat to their survival. AI, however, is not necessarily a threat. Indeed, many of the larger accounting firms have already embraced it, but now it may be time for medium to smaller accounting firms to acknowledge its presence, prepare for it, and learn how to use it for their benefit, too — even if that means disrupting the way these firms have been operating for years and decades.
AI is reshaping the face of accounting firms as known and experienced in British Columbia today. With that reshaping comes some so-called negative impacts but many more positive impacts that can and should excite accountants.
The Negative Impact of AI on Accounting Firms
Automation. That word is the subject of so much fear when it comes to AI. Automation threatens jobs and people’s livelihoods, and that is the exact fear that accountants are experiencing. Thus, the primary negative impact AI has on accounting firms in British Columbia is simple: an increase in automation for mundane tasks, like:
- Transaction coding, and
- Data entry.
These tasks are time-consuming but necessary. They also require great attention to detail and specificity. So, even though automation is feared, it shouldn’t be. AI is less likely to make mistakes than a human.
For example, if a human has an invoice and enters the data into a system, she or he may be stressed to complete the data entry part to start on something else. Errors are easily made with the click of the wrong key. AI, on the other hand, can be used to scan the information into the system, transforming unstructured data into structured data. This type of AI can be custom-designed according to each accounting firm’s processes.
As AI increases in automation and as the technology for the same increases, AI will move to higher level accounting tasks, meaning to higher level positions. So, the continued perception of AI disrupting accounting in the negative will continue. That just means, however, that accounting firms must continue to reshape themselves and the role of accountants to address this concern. In other words, accounting firms must remain relevant, and one example is the changing role of the accounting firm.
The traditional tasks of the accounting firm will change with the increase in AI. As mundane tasks are already being replaced by software, accountants and accounting consultants will continue to focus more on advising clients on business operations and taxes. At the same time, accountants are starting to think in terms of strategy, like advising clients on:
- Process improvement,
- Cost control, and
- Capital optimization.
The negative impact of AI on accounting firms, therefore, is twofold: automation and change. Accounting firms must change the way they work in order to stay relevant and this means using AI to automate some tasks and services while constantly staying on top of what’s new so that accountants can provide the services their clients — who are also being affected by AI — want and need.
The Positive Impact of AI on Accounting Firms
Now that we know AI’s negative impact is not necessarily negative at all, it is good to know that AI is disrupting accounting firms in many positive ways. In general, AI’s disruption means better quality service. For example, it provides more accurate information and improves auditing — the process of it and its results. With better, deeper audits comes better analysis and more room for strategizing. CPA Canada explains specifically how auditors benefit from AI.
In addition, as Forbes notes, some “accounting practices are starting to implement such advanced technology to streamline their operations. The general outcome that they are perceiving is saving time, reducing costs, increasing productivity and providing better accuracy.” Those are benefits any accounting firm can appreciate.
Forbes also recognizes that these benefits are more than processes but impact compliance, too. An important benefit is the ability to “get reliable and fast data included in every tax report they generate,” which affects compliance. Forbes concludes that “automated data entry is now the rule for accountants after maximum efficiency.”
The Future: AI Accounting Firms
AI accounting firms are here, and they will only proliferate and get better in the future. AI is not about an accountant losing his or her position, but about the accountant providing better services more efficiently and effectively by embracing AI. In fact, the Journal of Accountancy, reports that “80% of executives believe AI leads to a competitive advantage, and 79% believe it will increase their company’s productivity, according to a recent MIT-Boston Consulting Group survey of more than 3,000 business executives.”
In fact, accounting firms have already seized the advantages of AI and are creating AI specific to their firms. Jon Raphael, CPA, Deloitte’s audit chief innovation officer, is quoted by the Journal of Accountancy, “We’re at a real pivot point in terms of being able to wrangle and use data in ways we’ve never even contemplated before.” AI enables accounting firms to digest and analyze large sums of data in ways previously not possible. That means more tools (e.g., IPSWITCH, Expensify, KISI, FLOAT) for the industry, not fewer jobs. AI accounting firms are the future happening right now, and if you are an accounting firm in fear of embracing it, you should think twice because that fear is the real threat to your firm.