Reference no: EM132789881

The Future of Accounting

• Accounting has been around since ancient Egypt and even before in China. In agrarian economies accounting was used to answer questions such as "How much (lets say .. grain) do we have?" or "How much are we using or selling?" or "How much did we get for it?" or "How much do we owe?".
• In more modern times, the ideas of dual entry book keeping and various financial statements added sophistication to the ability to answer those and other, more detailed questions about human organized (i.e. government) and commercial activities.
• In the end, accounting reports are about telling a story, based on captured, codified and summarized information. In order to make the reports meaningful, the user must understand the data, how it was collected, sorted and presented. In order to make successive reports informative, the reports must be consistent. To achieve these requirements, accounting is performed in accordance with rules.
• In the past, accountants held a special place in society. We developed and understood the rules of accounting and were the ones to create the stories from sometimes seemingly random data. We knew the rules of reporting and, as a spin off from preparing reports, were called on to validate if they were being followed (auditing).
• But ... there is trouble in paradise! Anything that is repetitive, rules, or pattern based can be programmed. Artificial intelligence is capable of taking programming one step further by not only following the rules but integrating situational information, information from past events and then performing tasks and making decisions that formerly were only done by highly trained accountants. Machine learning can take those abilities and modify responses and actions based on evolving inputs, all without human intervention and programming. The democratization of information through web technology means that more, current information is available to users than ever before and the traditional, historical, financial reporting products of accountants are increasingly irrelevant.

What does this mean for accounting as a profession and for you, as a job? At what point will it be cheaper for small, medium and large businesses to pay for software that does their accounting than for people to do that work? What does it mean for current and future accountants? For you and your future?

Problem 1) In the face of AI and Machine learning, how will accountants continue to create value?

Problem 2) How will publicly available financial information evolve and what will that do to the role of the accountant in sharing information?

Problem 3) With increased reliance on AIS for publicized, shared information, should accountant's skillsets be more about the systems than the numbers?