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Will AI block the accounting talent pipeline?

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Could the new wave of artificial intelligence remove layers of associates and juniors as firms automate more ‘menial’ tasks in search of efficiencies? And what effect could this have on the accounting landscape as we know it today?

22nd May 2024
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The constant hum in the conference halls during this spring’s accounting events season was how artificial intelligence could change the way accounting firms – and the profession more generally – in future. 

This latest technological turn of events poses some rather existential questions for those with their eye on the accounting talent pipeline.

Will technology remove a layer of associates and juniors as firms go looking for efficiency savings? How will we train a new breed of AI-empowered accountants? Do potential accounting firm partners actually need to have served their time ticking boxes before ascending the ladder? And in ten or 15 years’ time (provided Skynet hasn’t taken over by then) will we see a shortage of skilled accounting talent at higher levels?

Change, but not dramatic

In a recent Any Answers debate on the issue, AccountingWEB member Maslins stated that they believe the changes will not be as existential as many forecast, and the role of an accounting junior will adapt to its more tech-friendly surroundings.

“When I trained in audit 20 years ago, much of a first year's job was finding invoices from big filing cabinets, photocopying for the audit file, then returning [the invoices],” said Maslins. “Ten years ago, systems [were already in place enabling you to search for a soft copy in a Windows folder. Now you probably just click a button in the sales ledger to get the doc.

“None of these improvements have eliminated the role of juniors, just changed them so they now do (very slightly) less menial tasks!”

Ian Pay, ICAEW’s head of data analytics and technology, stated that things have moved on from associates cutting their teeth by making tea and operating the photocopier, and challenging talent at an earlier stage may be beneficial for both associates and partners.

“I do think staffing models may need to change but not as dramatically as some might suggest,” commented Pay. “You still need someone to operate the AI, to follow up on exceptions with the client, to put it into context. 

“Associates are likely to be challenged more, earlier, in terms of the complexity of work they are expected to do (which let's be honest is surely a good thing, so-called "ticking and bashing" hardly seems the best use of a university degree), so rather it's the training that is going to need to evolve most, to ensure they are better equipped to hit the ground running.

The training bedrock

Nicolai Thomson, CEO of AI bookkeeping startup Jenesys, argued that training needs to evolve to match the pace of technological change. 

“I obviously have a biased view of the world, but AI needs to be included to help juniors/associates more regularly focus on solving the harder edge cases that AI will not solve reliably,” said Thomson.

“This speeds up junior training and produces a more competent and confident accountant. I believe the industry needs to catch up to legal, banking and finance on pay and work type, but AI hasn't really had its fair go in accounting until now. A better outcome for all.”

“Work practices will evolve, I'm sure, but there is a practical learning curve we all travel along in which we see how the real world works and we apply our technical knowledge to real-life situations,” added Michael Austin, chartered accountant and founder of Blue Dot Consulting. 

“It doesn't really end to be honest,” continued Austin. “At the risk of being seen as an ‘old bloke, set in his ways’ I think that's important knowledge that needs to be acquired.”

Speaking at the launch of Sage’s Copilot product, company CEO (and chartered accountant) Steve Hare told AccountingWEB that while technology can make accountants more efficient, training will continue to be the bedrock of the profession. 

“I'm a bit old school about this – it's important to understand how financial accounting works,” said Hare. “How do you put a P&L or balance sheet together? How does double-entry bookkeeping work? [Training] provides you with a grounding and an understanding, which means you understand where the figures come from and can interpret them.

“To use a motoring analogy, it's helpful to understand how an engine works,” continued Hare. “You don't need to be able to dismantle it or fix it, but if it's just a black box and you don't understand what's happening inside it, you run the risk of being less insightful and not understanding where the data comes from initially.

“I think it is important to understand where that data comes from, how the transactions are initiated because that helps you get better insights over time. If you don’t understand financial accounting, you can’t progress to the interpretation.”

Replies (11)

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Rob Swan
By Rob Swan
23rd May 2024 09:35

Personally....

It seems a lot of social/economic trends are leading to a future shortage of accounting professionals. AI and other technology trends (like MTD...) will result in more DIY accounting, more 'rubbish' accounts and an over selling of AI by software vendors as the 'solution' - which will only complicate matters for many small businesses - and the tax system. AI may well prove beneficial for larger firms where highly specialised (and expensive) systems can potentially do very good work. But....

In a profession like Accounting (and Law) there will likely be no substitute for human knowledge, skill, experience and - perhaps most of all - human integrity - sadly lacking in many prominent cases.

The 'best' accountants build their practices on human relationships, 'trust' and real 'value'. The drive towards all forms of tech' is, I believe, destroying a very valuable profession we desperately need more of, in human terms. I don't think the "talent pipeline" problem has much, if anything, to do with AI. I think they are two separate problems: one real (talent) and one looming (reliance on AI).

Just my (considered) thoughts.

Thanks (8)
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By Maslins
23rd May 2024 11:13

For the foreseeable future, firms will still need someone to sit on hold to HMRC...

Thanks (7)
Replying to Maslins:
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By KdotLemur
23rd May 2024 11:14

We can wish for the day HMRC produce a call back ticketing system. Maybe in 2040!

Thanks (3)
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By KdotLemur
23rd May 2024 11:14

The thing with AI is, is it true Artificial Intelligence, or just more advanced processing and formula's being marketed as AI?

Whilst the landscape of AI will change and progress over time, right now the current AI tools are barely being used by most accountants, or are just improving incrementally existing systems. Anything in generative AI platforms require checking or changing and doesn't really produce a time efficiency.

I still avidly follow the tech and try new things but i have not yet found anything that has cut out a job or replaced a human, it just seems like another tool to do work in a different way.

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Replying to KdotLemur:
By Nick Graves
23rd May 2024 12:01

At the moment, most merely repeat the question back at you in a re-phrased manner.

AI CAN work, but like a first-week junior, it's utterly stupid and you must explain all the rules. AI still draws people with weird six-fingered hands and cars with three headlights.

If said junior has any critical thinking skills, it can apply the rules to a different job in a different way, which is why one can prepare two incomplete records jobs in different ways and they both be true & fair views.

AI cannot really do that and know the answer isn't stupid.

The other problem is it takes a MASSIVE amount of computer power/energy, yet people still bemoan online gamers and BTC miners...

That may well improve with quantum chips, but we're not there yet.

The other concern relates to the adage that one cannot be a good CEO without first knowing how to sweep a factory floor effectively. It may well lead to more brain-dead accountants. The great thing about the Raspberry Pi was it gave 'programmers' a chance to experience machine mechanisms language at a basic I/O level once again.

Thanks (4)
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By Paul Crowley
23rd May 2024 11:14

No.
Not yet seen any AI answer a telephone call and calm down angry client.
To be honest not seen any genuine AI. The current stuff is no better than a quick parrot. Repeats what it hears and without intellect or conscience.
Easily taught how to be a rabid racist.
Where exactly is the AI in accounting and bookkeeping? Does not exist, just predictable programmed processes.
The leap from paper and no calculators or software to here is far bigger in time saving than anything that is likely in the next 50 years.
When I started it was paper, add-listers, and typewriters

Thanks (6)
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By Justin Bryant
23rd May 2024 15:01

You get paid quite a bit (or should that be bot) more if you have AI skills according to this recent report: https://www.artificiallawyer.com/2024/05/21/lawyers-with-ai-skills-can-g...

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By jon_griffey
23rd May 2024 21:25

This is nothing new. For years now technology has been gradually removing the role of the junior. When I first started back in '86 every firm required a battery of juniors to tick off bank statements, analyse and cast cashbooks, vouch, agree ETB's, control accounts etc. This was tedious, labour intensive work, but it taught the juniors the nuts and bolts and led to a deep understanding of accounting. With technology much of this work has all but disappeared, so fewer and fewer juniors are required and so without that pipeline of talent, we are now in the situation where we are in that there is a severe shortage of competent, senior staff.

Thanks (6)
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By ColA
24th May 2024 08:43

Having used IT in various forms for five decades I remain cynical as to how AI can replace ‘menial’ tasks.
In my book, accounting or otherwise, recording transactions is factual - how this is captured is unlikely to be facilitated by AI, hence the absolute need for human control or intervention.
I fear the business world is in the midst of another ‘Y2K’ onslaught, only to regret the naivety & expense far too late some months/years later.

Thanks (3)
Mark Lee headshot 2023
By Mark Lee
28th May 2024 15:05

In my talk at Accountex I stated and later explained my absolute conviction that accountants are not going to be replaced by AI or even by AAI (Augmented Accounting Intelligence). The generic predictions that accountants will be replaced by robots, machines and AI are typically based on naive and inaccurate assumptions about the work accountants actually do.

AI systems are, however, already enabling some accountants to streamline their processes and compliance services. They can do all this faster, easier and more accurately than ever before.

Much like Calculators, Spreadsheets and cloud based bookkeeping software enabled accountants to work faster and better in the past.

But the latest AI related developments are more transformative than anything we’ve seen before. And are evolving faster than we have ever seen before too.

This is why my talk was titled: The future demands different accountants to those of yesterday.

Thanks (1)
Replying to bookmarklee:
By Nick Graves
31st May 2024 11:42

Call me Cy-Nick Al, but can one imagine the furore if they found out you'd been doing your AML questionnaire by AI?

Client name: Bankman-Fried
Forename: Samuel
DOB: etc...
WCPGW?

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