What kind of impact will artificial intelligence have on the accounting profession?
In the early 1800s, Jacquard looms made it possible for low-skilled weavers in large mills to mass produce fabrics with complex patterns, displacing highly skilled weavers who had previously created such fabrics. In the ensuing Luddite riots, weavers attacked mills and destroyed looms in an attempt to hang on to their livelihoods. Ultimately, the development of these looms created more jobs and created more opportunities for workers.
In a similar fashion, today’s automation, robotics and artificial intelligence (AI) are evoking fear that jobs will be permanently destroyed. Multiple studies attempted to measure the future impact of these technologies, but Peter Drucker said, “The only thing we know about the future is that it will be different.”
Most studies that attempt to quantify the impacts of these new technologies on the future of work have relied on case studies or subjective assessments (really just guesses), and have lumped all these technologies together. A previous Brookings Institution study painted a grim picture for those whose jobs consist of repeatable, rote tasks, but concluded that higher wage jobs that required more education would likely be largely untouched. Other studies around the globe have reached similar conclusions.
However, a recent report by the same Brookings Institution authors found that the impacts of AI on its own may be most keenly felt in white collar jobs in several discrete industry sectors. According to this study, “Most strikingly, it now looks as if whole new classes of well-paid, white-collar workers (who have been less touched by earlier waves of automation) will be the ones most affected by AI.”
This study takes a novel approach, using a technique developed by Michael Webb, a graduate student at Stanford. Webb examined the overlap of verb-object pairs, such as “diagnose-disease” and “recognize-aircraft,” in AI patent descriptions and in job descriptions. This overlap was used to develop an estimate of the exposure of particular occupations to AI based on the importance, frequency, and relevance of those tasks in job descriptions.
Using this technique, the authors found that 740 of the 769 occupations examined showed some degree of exposure. They cautioned that this does not mean that these jobs are all going away, but that there will be some impact. As the authors say, “The complex interplay of task substitution, task complementarity, and the creation of new work driven by increased productivity and consumer demand makes it hard to play out exact labor market impacts.” This impact will also depend on the degree to which industry sectors adopt AI, which is a huge unknown.
Accounting will see an impact
Of particular interest to accountants and bookkeepers, the researchers found that jobs in the broad category of “business-finance-tech” may be among the most vulnerable to disruption by AI. This broad category encompasses engineers, sales professionals, designers, photographers, and software developers, as well as accountants, auditors, payroll clerks, bookkeepers, and financial analysts.
But, for firms of the future, the impact of AI is not a threat, but an opportunity. As Ariege Misherghi pointed out in her keynote at QuickBooks® Connect 2019 in San Jose, we have a shortage of accountants. Only three in 10 small businesses are currently connected to an accountant. Robert Half puts the overall unemployment rate for accountants and auditors at 2 percent for third quarter 2019, which means that there are more job openings than people to fill those jobs.
Without AI and technology to augment what we do, we simply won’t be able to fulfill the demand for our services.
Apps using AI will give us the capacity to help more small business owners. We are already seeing that positive impact with apps for forecasting and cash flow. These technologies give small business owners access to analytical abilities that were previously only available to Fortune 500 companies.
What this will also likely mean is that the talent mix at accounting firms will change to include more data analysts and data scientists. We’re already seeing this trend: The AICPA’s latest report on hiring trends showed that 31 percent of new hires at CPA firms were not accountants.
The future is still unclear
As the Brookings authors emphasized, “These are extremely early days in our inquiries. What’s coming may not resemble what we have been experiencing or expect to experience.”
Leaders and team members at the firms of the future will not see AI as a threat, but will embrace the opportunities offered by AI. Let’s not repeat the Luddite riots!