What can AI do, anyway?

December 18, 2023 9:00 AM

So, let's assume we've somehow, someway, all come to agreement on what AI is (see previous story) and is not (see previous story). Not sure how we managed to actually accomplish that, but we did, at least in this thought experiment. So we've operationalized all our variables and we can finally say we understand the fundamentals of AI.

Not so fast.

Because beyond what AI is and is not is the question of what AI can and cannot do, a matter which also has a wide range of opinions. Is AI the wonder technology that will do anything and everything, ushering us into a new age? Or is it useless for anything but the most rudimentary of tasks? For AI experts in the accounting solutions space, the answer is somewhere in the middle. But it's a wide middle which contains a diverse set of opinions.

When it came to what AI cannot do, the most common answers centered around the inability to replace human judgment and initiative. They pointed out that AI really lags in its ability to contextualize information, and so has trouble approaching complex situations with the required degree of nuance. In this respect, many said that AI cannot replace human accountants in their entirety. At the same time, they noted that current models do have many advanced capacities that can greatly enhance the work done by these same human accountants. And so while AI–it is believed–won't replace accountants, it still will profoundly change the profession and the industries they operate in. Accountants will survive, but not entirely unchanged.

In this third part of the series, we hear our experts respond to the questions: In terms of accounting, what can't AI do that people think it can do? and In terms of accounting, what can AI do that people think it can't do? (See earlier installments on what AI is — and what AI isn't.)

Danielle Cheek

Vice president of strategy and industry relations, MindBridge AI

In terms of accounting, what can't AI do that people think it can do?

"Can't" is a word that might not endure as our understanding of what is possible continually evolves. Nevertheless, there are realms where AI "shouldn't." This circles back to the importance of human-in-the-loop, emphasizing the need for proper oversight in diverse aspects of AI and related systems.

Given AI's potential to support the field of accounting, managing the risks associated with various AI applications can be challenging, especially considering potential future regulatory requirements. For example, MindBridge anticipated the complexity of relying on algorithms in finance. To ensure our algorithms are robust and function as intended, we conduct annual assessment by an independent third party to assure our users that our algorithms are well designed and operating as designed similar in theory to a SOC 1 as well as are explainable and low risk of bias.

In terms of accounting, what can AI do that people think it can't do?

I believe many people are unaware of the vast amount of data they possess and the insights it can yield. The challenge lies in the overwhelming volume of data, which makes traditional processing methods inadequate. However, AI can effectively manage and analyze this data, offering new ways to recreate and enhance these processes, such as how Cherry Bekaert drove ROI in their audit engagements. The quote that AI will not replace people, but people using AI will replace those not, rings true in these kinds of efficiency gains.

Aaron Harris

Chief technology officer, Sage

In terms of accounting, what can't AI do that people think it can do?

I think it's more a question of what shouldn't AI do. Some decisions are too important to be left to AI, which doesn't have emotional intelligence and often lacks context. It's also important to remember AI can't be held accountable for outcomes – a human must always be in the loop. Most importantly, AI should never present itself as human to a user or client.

In terms of accounting, what can AI do that people think it can't do?

Large Language Models capable of writing code can directly interact with APIs and can decide which APIs are relevant to perform a task. This breakthrough enables AI to expand beyond performing simple tasks to automating entire workflows. In the future, we'll see AI "agents" that take on entire accounting cycles, including humans to handle exceptions and to make important decisions.

Jeremy Sulzmann

Vice president, Intuit QuickBooks partners segment

In terms of accounting, what can't AI do that people think it can do?

AI is not a replacement for human experts. Yet, at the same time, accounting professionals are in a unique position to benefit from AI and its ability to help both their firms and their clients succeed - from uncovering strategic business insights to creating time-saving efficiencies and workflows.

In terms of accounting, what can AI do that people think it can't do?

We're using AI to supercharge our online platform and drive efficiencies designed to work alongside our small business and accountant customers, including the ability to:

answer questions that help business owners better understand their financial data,
present insights to guide actions in making more informed decisions,
automate tasks to save time,
provide a comprehensive view of where a business stands, and
connect them to product experts if help is needed.

Jin Chang

CEO, Fieldguide

In terms of accounting, what can't AI do that people think it can do?

Some people in the accounting profession believe that AI can operate autonomously without the need for any human intervention, but when it comes to decision-making and interpretation of complex scenarios, human oversight is still required. Other myths about AI are that it can replace human judgment, instantly learn nuanced tasks, solve unstructured problems facing the industry, and that it can learn to replicate softer human skills, such as critical thinking, emotional intelligence, and creativity. However, humans still have the upperhand when it comes to all of these important capabilities, which are so critical to firm success.

In terms of accounting, what can AI do that people think it can't do?

Most people in the accounting industry believe that AI will play a key role in addressing the talent shortage by automating repetitive tasks, streamlining operations, and freeing up CPAs to do more rewarding and fulfilling work. What they may not know is that AI can also help alleviate resource issues through better management of offshore resources, improved recruiting, and training and upskilling of team members.

Kacee Johnson

Vice president of strategy and innovation, CPA.com

In terms of accounting, what can't AI do that people think it can do?

Math

In terms of accounting, what can AI do that people think it can't do?

It is a powerful tool and can assist accountants in many things. One area that I think many people aren't aware of its possibilities to assist is in tax and legislative research assistants.

Wesley Hartman

Founder, Automata Practice Development

In terms of accounting, what can't AI do that people think it can do?

Be an ultimate source of information. AI is trained on data up to a point. Chat GPT has been updated to April 2023. This means that there are gaps in knowledge that need to be covered. Additionally, knowledge that it is trained on can be contradictory. I would not rely on information from an AI source without verifying. Additionally, this technology is so new and versatile that we are still exploring what it can and cannot do.

In terms of accounting, what can AI do that people think it can't do?

Building Automations. Since our current version of AI has been trained on the internet as of April 2023, this includes all programming languages. I develop custom software for accountants and I always keep a tab open to an AI program. I will frequently ask it to build snippets of code that I use in my larger applications. While the code is not perfect, it gives me a starting point to modify for my purposes and it saves my time and cognitive resources for the more challenging tasks. I would challenge the reader to try making a macro for Excel using an AI tool. I think the inspiration for the macro is the role of the human and the AI tool can facilitate the journey to the goal.

Vsu Subramanian

Senior vice president of engineering and head of AI, Avalara

In terms of accounting, what can't AI do that people think it can do?

AI cannot (yet) provide strategic advice or make nuanced judgments about the best direction of a business – though it can serve as a "co-pilot" assistant for accounting professionals in these advisory endeavors.

In terms of accounting, what can AI do that people think it can't do?

AI can analyze data, summarize text and create narratives. These capabilities can be used to gain efficiencies in an accounting practice.

Jason Staats

Founder, Realize

In terms of accounting, what can't AI do that people think it can do?

Large language models were never intended to be factual, and will never reach a level of accuracy that can be deemed "authoritative". It's incredible that ChatGPT will oftentimes return correct answers, but the best way to use an LLM is by pairing it with authoritative context. Point it to a body of text that is authoritative, and use an LLM to interact with it, much the same way a human researcher does. Trusting the general knowledge of an LLM is something that should be avoided.

In terms of accounting, what can AI do that people think it can't do?

Math! LLMs are great at some things, terrible at others, math among them. The good news is computers have had the math thing down for a while. The best AI applications are the marriage of traditional computing with new generative technology, and it's why the distinction of what is and isn't AI ultimately misses the point.

Enrico Palmerino

CEO, Botkeeper

In terms of accounting, what can't AI do that people think it can do?

AI isn't good at doing math nor is it good at drawing inferences between unlike things.

In terms of accounting, what can AI do that people think it can't do?

It can categorize transactions, map vendors, automate month-end-review, generate insights, forecast, and provide basic advisory services.

Avani Desai

CEO, Schellman

In terms of accounting, what can't AI do that people think it can do? 

AI can't make ethical judgment. Yes, AI can process data and perform calculations with speed and accuracy, but it lacks the ability to make nuanced ethical decisions, and that's why we still need—and will still need—accountants who bring their ethical insights and context to their work.

In terms of accounting, what can AI do that people think it can't do? 

While some may assume that offshoring is the primary solution for cost savings in accounting, AI can actually reduce dependence on offshore teams.

Chris Griffin

Managing partner, transformation and technology, Deloitte and Touche LLP

In terms of accounting, what can't AI do that people think it can do?

There is a compelling role for AI in accounting and in particular the audit; however, the belief that the entire audit engagement can be automated is a misnomer. There is no single process in an audit that can be automated end-to-end because of the professional judgment required.

AI requires sound human decision-making to curb its potential shortcomings. Companies and audit committees hire auditors for their professional judgment and skepticism, to consider bias and reliability. A machine cannot take responsibility for an audit opinion. It requires a person.

One of an auditor's core missions is to help enhance trust and transparency through providing assurance on a variety of different subjects, from financial statements to internal controls over financial reporting. The foundation for auditors to deliver assurance includes evaluating governance, risks, and processes. An auditor's independent mindset and focus on risk assessment are core underlying concepts for evaluating oversight and effectiveness of AI models.

In terms of accounting, what can AI do that people think it can't do?

Beyond driving efficiencies, AI can learn from data and make decisions based on that data. Self-learning AI is artificial intelligence that can train itself. At a high level, it works by analyzing a dataset and looking for patterns that it can draw conclusions from.

Steve Chase, Thomas MacKenzie

Vice Chair of AI and Digital Innovation, KPMG
Audit U.S. and Global CTO, KPMG

In terms of accounting, what can AI do that people think it can't do?

Steve Chase, Vice Chair of AI and Digital Innovation at KPMG:

"Given the vast amount of data inherent in the accounting profession, there isn't much that AI eventually won't be able to do. AI can read balance sheets and income statements to extract, compare, and reconcile information to improve due diligence and reduce the risk of errors. It can automatically classify GL expenses based on their characteristics, reducing manual efforts and improving accuracy. And more proactively, many enterprises are already using AI to continuously monitor for accounting anomalies – scanning invoices, matching with payments, and comparing against policies to reduce the risk of fraud and errors in real-time.

"AI-fueled technology will reshape almost every aspect of accounting functions driving automation, efficiency, innovation and ultimately freeing up accountants to concentrate on offering strategic advice and strengthening client relationships."

In terms of accounting, what can AI do that people think it can't do?

Thomas Mackenzie, KPMG Audit U.S. and Global CTO:

"While AI can perform incredible analysis already, audits still come down to complex judgments that require deep knowledge of the standards, analytics, and context. Moreover, applying professional skepticism will always require people. While we expect AI to continue to advance its capabilities in many of these areas, people will always be involved in the audit process."

Paul Goodhew, Richard Jackson

Global assurance innovation and emerging technology leader
Global AI assurance leader
Ernst and Young

Richard Jackson, EY Global Artificial Intelligence Assurance Leader

In terms of accounting, what can't AI do that people think it can do?

AI cannot yet fully automate end-to-end processes nor remove the human from the loop. AI is not able to apply the level of professional skepticism required for the profession. At EY, we anticipate that new advances in AI will increasingly augment the accounting professional's experience and enhance the attractiveness of the profession, as it enables teams to deliver high quality work and focus on the most prominent risks and complex judgment areas.

In terms of accounting, what can AI do that people think it can't do?

AI is often misconstrued as a pure automation play to improve audit process efficiency. It should be acknowledged that AI can also enable other benefits, including augmenting quality and enabling experiences for end users and customers. At EY, initial AI technology capabilities released leverage on the opportunity to bring together the collective knowledge of EY audit professionals to deliver a diagnostic into the hands of our teams, which is helping them assess risks related to their clients. Additionally, EY's Assurance expectation is that new advances in AI will increasingly augment the accounting professional's experience and help enhance the attractiveness of the profession.

Wes Bricker

Vice chair, PwC

In terms of accounting, what can't AI do that people think it can do?

You cannot outsource trust to AI. While AI has the ability to create new data quickly and in real time, it lacks life experience. It is only as current as the data it is ingesting and is backward looking. It can't predict the future or any human emotions. While it may be faster, it is also biased and can be unfair in practice. At PwC, we stand behind our human-led, tech-powered approach and are committed to responsible AI. We have established an AI Governance team, which implemented governance programs that provide the standards, processes, and training our people need to use data and AI within the firm.

AI tools are also built on language models, not numbers. In accounting, we need to contextualize our calculations. Unlike accountants, AI does not have the ability to communicate accounting in the context of society and life to make it consumable for the public.

In terms of accounting, what can AI do that people think it can't do?

A few months ago, ChatGPT took the CPA exam and failed. AI cannot replace accountants, but it will accelerate the profession. It will supercharge capabilities and is foundational to standardizing, simplifying and automating the audit. It will fundamentally shift the nature of audits and enhance the quality of our work.

Take, for example, understanding niche guidance. Previously, it would have taken 10,000 hours over five years to master an area of the industry. Now, AI can digest the information into simpler terms and more quickly allow accountants to focus their time on creating value. AI will allow accountants to focus on higher risk, more judgmental areas of assurance that require more critical thinking.

We cannot, and will not, rely on AI to replace auditor judgment. Technology will be used alongside our auditors' intelligence, judgment and professional skepticism because people and technology together are more powerful than either alone.

Ellen Choi

COO, Aiwyn

In terms of accounting, what can't AI do that people think it can do?

When experiencing fluid conversational AI from chatbots like chatGPT, many may think that AI has the AGI (general AI) capabilities that has the capability for human judgment and reasoning. However, this is not the case, as today's AI - even state-of-the-art bots like chatGPT - are powered by advanced ANI targeted to specific use cases rather than AGI that can truly think independently across contexts and domains.

While interactions feel dynamic, current AI lacks judgment, troubleshooting skills, and reasoning capacity that humans intrinsically develop over time. AI can process exponentially more data for pattern recognition yet still has limitations vs human cognition.

This means that today while AI can be excellent accountants in specific tasks, it cannot become the trusted advisors that our clients look to for guidance and wisdom for their businesses and financial affairs.

In terms of accounting, what can AI do that people think it can't do?

Leading AI systems can already analyze volumes of data, recognize patterns and automate repetitive tasks dramatically faster with higher accuracy than humans could ever achieve manually. Many accountants realize that AI can have beneficial impact on their work, but they likely do not realize the immense scale of that difference - up to thousands of times faster processing with significantly fewer errors.

It is not just incremental improvements but order-of-magnitude efficiency gains that could reshape workflows and processes. AI will only continue to improve, so accountants should expect the productivity gains to become exponentially greater over time.

Shane Westra

Chief product officer, Canopy

In terms of accounting, what can't AI do that people think it can do?

AI can't (easily) access large amounts of proprietary data (such as details that are specific to an accounting firm or a client). Information needs to be uploaded to AI, and there are generally limits that require AI requests to be focused on smaller sets of information.
Most AI engines, such as ChatGPT, still can't fully leverage the most recent data available on the Internet. The LLMs (Large Language Modules) require periodic updates. As an example, if the IRS updates a tax form today, AI won't be immediately aware of that update unless that information is specifically sent to the engine as part of the input process.

In terms of accounting, what can AI do that people think it can't do?

Most people are not aware of AI's powerful capabilities when it comes to analyzing and processing images and documents. With the right software, tax and other financial documents can easily be uploaded for AI to process and analyze.

Adam Orentlicher

Senior vice president and chief technology officer, Wolters Kluwer, Tax & Accounting North America

In terms of accounting, what can't AI do that people think it can do?

There are several limitations to what AI can do in the field of accounting. Firstly, AI cannot replace the partnership and personal touch that a human advisor can provide. Human advisors can think through advice and strategy, considering changes in time, life, and business, as well as social cues and client empathy. Secondly, AI cannot replace the professional judgment of accountants, auditors, and other professionals when it comes to making decisions on risks and certifying results. While AI can flag anomalies and provide advice, it cannot replace the human element in decision-making. Finally, AI can have difficulties explaining ethical conclusions and providing transparency in how it reached its conclusions. While the industry is making progress in this area, contextual explanations and transparency can still be elusive.

In terms of accounting, what can AI do that people think it can't do?

Again, on my theme…

Anomaly detection: AI can identify anomalies within accounting data, such as potential areas for optimization or risk, and provide recommendations on how to handle them.
Workflow automation: AI can optimize the workflow of tax or audit professionals by automating tasks such as requesting documentation, grouping tax accounts, optimizing billing rates, and scanning and autoflowing documentation into tax returns.
Business intelligence: AI can reveal new insights through correlations and big data analysis, providing cash flow projections, billing and invoicing optimizations, and outcome predictions.

Blake Oliver

CEO, Earmark

In terms of accounting, what can't AI do that people think it can do?

AI is great at processing and analyzing data, but it cannot replace human judgment and ethical considerations in accounting. AI lacks the ability to exercise professional skepticism and handle complex, subjective decision-making that requires human insight and ethical judgment.

In terms of accounting, what can AI do that people think it can't do?

AI is surprisingly good at translating complicated accounting and tax questions and answers into plain English, and it can do this better than most accountants, including me. Accountants who layer AI into their communications will have a huge advantage over those who don't.

Pascal Finette

Co-founder and CEO, Be Radical

In terms of accounting, what can't AI do that people think it can do?

AI lacks the capability to apply ethical judgement or navigate the intricacies of human intent within accounting. It processes data, but cannot interrogate the motives behind the numbers.

In terms of accounting, what can AI do that people think it can't do?

AI can unveil predictive analytics, transforming vast data sets into forecasts and detecting patterns that might elude even seasoned professionals.

Hitendra Patil

President, global F&A outsourcing services, Datamatics Business Solutions Ltd.

In terms of accounting, what can't AI do that people think it can do?

If people think AI can do "everything", they are mistaken. AI cannot fathom what does not exist as data, and the data that exists outside of the data that AI systems are trained on.

In terms of accounting, what can AI do that people think it can't do?

Advisory. It is well known that great advice emerges from data-driven insights and what better than AI to discover those insights hidden in vast volumes of data?

Samantha Bowling

In terms of accounting, what can't AI do that people think it can do?

AI cannot perform a complete audit (well not yet anyway)

In terms of accounting, what can AI do that people think it can't do?

AI can bill your customers, manage collections for accounts receivable, answers phones and client questions, manage payables, pay bills, reconcile accounts…I could go on and on here.

Abigail Zhang

Accounting professor, University of Texas, San Antonio

In terms of accounting, what can't AI do that people think it can do?

Accurately make forecasts. Although we can train AI models with decent accuracy, they can still make mistakes, especially when there are new situations unseen by the model (e.g., black swan event). That's why we need human input to moderate model, like co-pilot.

In terms of accounting, what can AI do that people think it can't do?

Understanding the context and being able to accurately summarize or extract relevant information. Being "creative", such as producing art, music, or brainstorming.