Artificial Intelligence or AI is one of the cornerstones of the emerging computing and digital movement. It is a mechanism which seeks to replace the traditional human intervention in the day to day jobs performed by them and their clumsy handwritten codes and algorithm, with the intention of replacing the same by taking the advantage of smart ways of coding, by learning and adapting from the information collected (Zhou, 2017). It is software which is capable of drawing conclusions from large sets of data and makes adjustment in accordance with the conclusions drawn. Block chain on the other hand, offers a secure and a much transparent mechanism of handling large amounts of data (Kiviat, 2015). It is a storage mechanism of data fully encrypted in order to protect the data. It provides a safe and secured passage for information storage and handling of data.
Usage in Accounting:
According to Nick Chandi of Forbes Technology Council, AI is affecting the field of Accounting in a number of ways. Today Bots and AI are efficiently dealing with all the Accounts related data. There are many structural changes taking place in the recent times, due to the increased use of AI in the arena of Accounting. AI is affecting the compliance procedures, where big data is being handled and processed on an automatic basis. This is helping accounting experts in getting authentic, fast and reliable data in every tax report, generated by them. Block chain technology on the other hand, is presenting a new kind of accounting ledger, which can be updated and verified without any kind of external or internal threat, as once anything is encrypted in the form of the blocks, it cannot be altered (Deloitte.com, 2016). The big four firms have started using block chain and have welcomed this prospect. E&Y have started accepting Bit Coin as a payment mechanism, PWC have joined them too. Compliance with regulatory mechanism, transaction between the tax authorities, auditors and banks with various companies is possible with the help of block chain technology.
Potential usage in accounting in Future:
Block chain technology has the potential of improving the profession of Accountancy by eliminating unnecessary costs and maintaining and reconciling the ledgers. Smart contacts, consolidated book keeping, ensuring security and trust, less paperwork for accountants are some of the ways block chain would impact accounting in the future (Pannu, 2015). In a similar way, AI is also becoming the future of Accounting. It would help in locating errors, would be able to handle large sets of data, and would also be able to use all the repetitive tasks, which could enable the accountants to focus on the more important things (Back et al., 2014).
Cases of usage of Block Chain and AI:
One of the most important areas where AI is and will be having a significant manner is the compliance and categorisation of data. In the case of compliance, data handling and processing has become automated. This helps the accounting experts is getting fast and reliable data in each of the tax report, generated.
Today in the case of categorisation of data, bots could determine and categorize all information into various accounts by themselves. This provides and important indication that bots can perform singularly. For example, bots can easily identify and organise data which comes from the same sources. Thus it can be seen that if one has a phone bill of monthly nature and a phone bill which is of a purchased nature, both of which is coming from the same telephone company, then the bots would easily understand that both of them are quite different (Catlow et al., 2017). The bots would take into account the difference of these two and would accept the distinctive features of both of these bills. After these, it would classify and sort them into two different bills and would put them into two different areas, for payment purposes.
Block chain on the other hand can be used in case of accounting. One of the most common areas, where it could be used is the area of Audit. In the case of block chain, the database is distributed across the internet and it can be used by users with strongly encrypted secured keys (Pilkington, 2016). The databases are in the forms of blocks, which cannot be erased and are of permanent nature. Here in this case, the auditors won’t be patiently waiting near the fax machines and they won’t be collecting samples of the files to be audited, rather they would be checking on each of the block chain keys (ISACA, 2018). They would thus; take a more aggressive stance against such kind of acts and would be pursuing the cases of fraud in a much more serious manner. This would take place as with the help of the block chain technology, the auditors would be able to take care of each of the single transaction. This would ensure better audit of the financial statements.
Views on Author’s ideas and points:
According to the Hood (2018), both AI and block chain have the potential of helping accountants all over the globe. Their relevance and their value would not have any kind of significant amount of impact on human jobs. These claims made by the author in this regard are very profound and are authentic in nature. According to Gartner, many companies have no shifted their focus on cloud computing and it would lay a huge impact of more than $1 trillion in the information technological spending by the year 2020. Ceterus founder and CEO Mr Levi Morehouse, has stated that the unification of cloud along with AI and robots is the future of accounting. As per Hood, this would not let people to lose their jobs but they would just shift towards solutions, when corporate focus would be on cloud and AI.
According to an Accenture report, AI impact can lead to the shifting of different accounting jobs in different ways. For example, financial controllers may now shift their focus of activity from detecting errors and problems to predicting problems and errors by a comprehensive analysis of the big data (ifac.org, 2018). The report of Accenture also suggests that hiring changes can take place because of the advent of AI. For example, now with AI, the companies can look for hiring for strategic positions rather than hiring for every finance related jobs.
In the case of the block chain technology, as per Erik Asgeirsson, who is the CEO of CPA.com, which is the technological part of the AICPA, has said the block chain technology will not hamper the jobs of the people. Block chain would moreover simplify the work of the accountants. This would be done by block chain’s transparency, which gives complete visibility to all the transactions for accepted users (icaew.com, 2018). In this way, the work of the auditors would decrease. With the advent of block chain along with the expansion of cyber security and sustainability, the employment opportunities in sectors of assurance services would increase.
As per the author with the advent of block chain technology, the role of auditors will not be vanishing into thin air. This is a completely authentic statement which is true in nature. It would help the auditors in a variety of ways. The excessive burden of looking into the various kinds of accounts and their errors and frauds would be taken care of by the block chain technology (Pilkington, 2016). This would lead to reduction in the responsibility of the auditors, thus it would save their time and allow them to focus on the important functions of their arena. Thus it can be said that there will be a positive impact on the profession of the auditors, because of the advent of technologies.
Financial reporting regulation in future:
The financial reporting regulation would change in the future due to a variety of reasons, some of which have been explained below. Firstly, accountants would improve, with their working style, approach to a problem and along with the use of more and more advanced technologies; the accountants would substitute their traditional approach of doing things, with new and improved mechanisms. Better laws and regulation procedures would be brought into the foray of accounting, with the issue of security in the ear of digitalisation cropping up. This kind of robust security mechanism would go a long way in improving the accounting procedures (Godsiff, 2015). In addition to all this, there would be addition in laws and regulations for the purpose of avoiding of large amounts of tax and the cases of money laundering As the incorporation of technologies like artificial intelligence and block chain would be included in the profession of accounting, the cases of financial irregularities would be reduced, and in this way, the financial reporting procedures and approaches would be much more transparent in nature (Morabito, 2017).
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