AI and the Future of Accounting

Accountants have long used technology to enhance their work and deliver more value to businesses. The widespread use of artificial intelligence (AI) and machine learning allows them to take the next logical step, using advanced technology to better serve their clients. 

Across all industries, innovative software systems are increasingly used in decision-making tasks once reserved exclusively for people. While technology does not solve every problem for accountants, it does provide fresh approaches to ongoing challenges. 

Working with advanced technology is a skill accountants should be open to developing for use in the modern accounting profession.  

AI-Related Topics Important for Accountants

Any initial hesitancy about embracing the connection between AI and the future of accounting has been swept away by what innovative software can do. Concerns over losing work to AI systems drives hesitancy toward fully embracing AI and machine learning integrations in accountancy. Identifying the connection between AI and the future of accounting comes down to understanding how this technology works and how it can empower human accountants to do more as supportive efficiency tools. 

Writing for Forbes, Reach Reporting CEO Justin Hatch advised that “instead of fearing these advancements, certified public accountants (CPAs) should embrace them and find ways to augment their skills rather than replace them.” 

Some of the ways accountants can put AI to use include the following. 

Automating Mundane Tasks

One of the most significant impacts of AI in accounting is the automation of repetitive tasks. Historically, accountants spent a substantial amount of time on manual data entry, reconciliation and other routine activities. With the advent of AI-powered tools, these tasks are becoming automated, allowing accountants to focus on more strategic, value-added activities. 

AI-driven software, such as QuickBooks and Xero, can now handle tasks such as data entry and invoice processing with remarkable accuracy. This reduces the risk of human error and frees up accountants to concentrate on higher-level tasks, such as financial analysis and strategic planning. 

Accounting Analytics

Automating accounting processes allow accountants more time for analyzing and finding insights. For example, accountants can use analytics programs for continuous auditing and analyzing full data sets of financial information rather than relying on just small samples.  

Accountants should understand how to mine data, which because of exponential growth in the use of technology increases the complexity and related risk. Because data is often housed in a variety of platforms, software and hardware, accountants require knowledge on financial data and extract-transform-load (ETL) processes. With this process comes the requirement of ensuring that the data that is being used in the analysis is both reliable and relevant. 

Accountants also must understand an organization’s major business processes, related controls and an entity’s IT environment as it relates to its impact on the financial reporting. Once these key factors are understood, the accountant can then use various data visualization techniques to communicate accounting data analysis results. 

Predictive Analytics for Better Decisions

AI’s predictive analytics capabilities are another significant change in the accounting profession. By analyzing historical data and identifying patterns, AI systems can make accurate predictions about future financial trends. This empowers businesses to make more informed decisions, anticipate potential challenges and develop proactive strategies. 

For example, AI algorithms can analyze market trends and economic indicators to help businesses forecast demand for their products or services. This predictive power enables organizations to optimize their financial planning and allocate resources more efficiently. 

Enhancing Fraud Detection

The battle against financial fraud is a constant challenge for businesses, and AI is proving to be a formidable ally in this arena. Advanced AI algorithms can analyze vast amounts of financial data in real-time, detecting anomalies and patterns associated with fraudulent activities. 

According to PwC, AI is increasingly used for fraud detection in financial transactions, reducing the time and resources required for manual investigation. By continuously learning from new data, AI systems become more adept at identifying and preventing fraudulent transactions. 

Cloud-Based Accounting with AI Integration

The integration of AI with cloud-based accounting systems is streamlining financial processes and enhancing collaboration. Cloud accounting platforms, such as Sage Intacct and NetSuite, leverage AI to provide real-time insights, automate workflows and foster collaboration between different departments. 

This shift to cloud-based accounting not only improves accessibility but also enhances data security and reduces the reliance on physical infrastructure. The ability to access financial data anytime, anywhere, coupled with AI-driven insights, empowers businesses to adapt swiftly to changing market conditions and make data-driven decisions on the go. 

The Evolving Role of Accountants

As AI takes on more routine tasks, the role of accountants is evolving from data entry and transaction processing to strategic financial management. Accountants are becoming key players in leveraging AI tools to gain deeper insights into financial data, interpret results and advise businesses on strategic decisions. 

While the benefits of AI in accounting are undeniable, accountants must also address the challenges and ethical considerations that come with this technological shift. Issues such as data privacy and bias in algorithms are critical aspects that require careful consideration and regulation. 

As AI continues to evolve, it is crucial for businesses and policymakers to collaborate in establishing ethical guidelines and standards for the responsible use of AI in accounting. Striking the right balance between technological innovation and ethical considerations will be key to ensuring a sustainable and equitable future for the accounting profession. 

Explore Eastern’s M.S. in Accounting

Through Eastern Connecticut State University’s (Eastern) M.S. in Accounting program, graduate students can prepare themselves to use advanced technologies in the accounting profession. The online accounting program is designed with working professionals in mind and its flexibility allows students to earn their degree in as quick as one year while maintaining their current job*. 

The 30-credit hour program is designed for accountants who aspire to take the next step in their career, as well as professionals who want to enter the accounting profession. Coursework covers a wide range of topics, including auditing, taxation, assurance and international operations. Students are taught the skills and knowledge to work in local and state government, not-for-profit organizations, financial institutions or public accounting firms. 

*Students must enroll with full-time status with no breaks in attendance to complete the M.S. in Accounting program in one year. Full-time status may vary based on the program and term. This timeline may vary depending on individual circumstances and course availability.