After the global financial crisis 2008 government across the countries have widened the scope of auditor duties and had imposed a stricter regime

After the global financial crisis 2008 government across the countries have widened the scope of auditor duties and had imposed a stricter regime

After the global financial crisis 2008 government across the countries have widened the scope of auditor duties and had imposed a stricter regime. In the wake of globalization the professionals not only have to deal with a large volume of data and but in the same time also have to comply with the different accounting and assurance procedures. Issa, Sun and Vasarhelyi (2017) have suggested that the humans perform poorly in the complex tasks that require the collection and aggregation of excessive information from multiple sources. This hold true in accounting and audit field and this is one of the reason that financial fraud does happen in the industry. But the deep learning/AI and blockchain can easily overcome this limitation of human, not only by providing the unbiased opinion but also to overcome and flagged the anomalies in real time.

Artificial Intelligence/Machine Learning/Deep Learning
Basically the accountants are recording and verifying the historical data against set standards, providing insight to the stakeholders and lodging the same with government agencies for tax or other purposes. The robust developments in the field of technology has automated the recording of the mundane tasks e.g. at point of sale (scanning the bar code) to its effects on the financial statements etc. that were performed by the accountants earlier. Combined with cloud computing accounting data have much more integrity e.g. when sale is made inventory records and its effects on operational profit are updated by itself and same records are available to each party involved in the network. In-spite of integrity in data and availability of information still management depends upon the accountants to conclude the hidden message behind the data. It is projected that accountant and auditors will be deprived from this vital function with the introduction of ‘Artificial Intelligence’ into the accounting field. Intuit 2020 report suggest the technology will displace the mundane tasks of accountant in near future. In the past technology led to improvement and productivity in data processing, in future the intelligent technology would be one the major driver of the change and believed that future would be marked by intelligent interpretation of information and decision making support (Henry, Hicks 2015).
Although accountant and auditors are using the latest available technology for deeper dimensional analysis of the data and are employing hypothesis techniques to predict the trends in future to overcome the errors and fraud but due to the volume of data to deal with and plethora of standards and policies to comply with, anomalies are still happening and the frauds remain undetected. Kokina and Davenport (2017) have suggested that, machine learning is particularly relevant when organizations wish to dramatically increase the speed, granularity, and productivity of modeling to deal with large volume of data and can be used for identifying anomalies in large datasets, which may be a basis for further forensic investigation. Machine learning is the next level of intelligence for analyzing numbers is machine learning, which is already being widely used outside of accounting to automate statistical and mathematical modeling. Traditional accounting and tax functions will be revolutionized by machine learning that offer real-time collaborations, scenario planning, cost modelling and risk simulation tools (EY, 2016). Anomalies in accounting books will be easily detected as the machine will analyze the scanned document and links it to appropriate record.
Artificial Intelligence Impacts on Book Keepers
I believe AI will largely have its impacts on the role of book keeper or entry level accountant role. They will be replaced by a virtual assistant. For example an ‘artificial intelligence’ tool (BOTKEEPER) that is catering to the small business entities (SME’s) has already taken over the book keeping function of the accountants. BOTKEEPER is a virtual assistant that that has the attribute to work on existing accounting software or to migrate and work on new platform apart that it offers unlimited reporting of any aspect of book keeping e.g. aging payable/receivable, unit cost budgeting etc., payroll, vendor mapping, reconciliation, collection calls and emails and many more (Botkeeper, 2018). It is performing most of the book keeping functions with accuracy using different accounting software’s like XERO, Quickbook etc. (Shieber, 2018). It retrieve and analysed the scanned data and post the transaction to relevant ledgers (Botkeeper, 2018).
Artificial Intelligence Impacts on Tax Accountants
Automation will also have its impacts on the work of tax accountants. Susskind (2015, p. 85-87) has mentioned that “Tax and audit have two things in common: they are heavily regulated, they involve regular interaction with the state, and the raw material upon which they operate is financial data. There are signs, however, that much that they do will be challenged by technology”. As per Intuit report 2020, accountant no longer will be focusing on preparing the tax returns and financial statements but their job will be to ensure that the automated data is complying with the regulatory laws. In that context the professional will be required to gain more computational and analytical skills. In UK, Deloitte is using AI tool ‘Revatic Smart’ to recover foreign VAT payments. It scans client’s document using OCR (optical character recognition) and automatically files the correct forms, with little human input. In 2014, in United States almost 48 million prepared their own returns online, without the help of any tax professional/accountant, the United Kingdom launched digital tax return platform in 2016 (Susskind, 2015).
The machines can do the repetitive tasks at super-high speeds, it will transform the way people interact with the tax function (EY, 2016). Not only it will provide the transparency and real time tax data but also will speed up the processing of tax returns. The process that is currently in place; to collate the transactions, differentiate between taxable and non-taxable transactions, prepare a return and then file it will no longer will be valid. Machine learning will be able to differentiate between taxable and non-taxable transactions at the point of scanning the barcode or incurring the actual expenditure. So real time taxable amount will be available to the entity and accountants or tax specialist will be deprived from this function. On the audit side, it will comparatively be easier for auditors to check the records.
However, on the other hand overseas sales/purchase may give rise to the issue of double taxation. So this area needs to be looked, whether accountant inputs still be required in this scenario?

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Artificial Intelligence Impacts on Auditors
Another area that will mostly effected with the automation is Audit. Kokina ; Davenport (2017) are of the view that the field of accounting in general and auditing in particular is undergoing a fundamental change due to advances in data analytics and artificial intelligence. As per the survey conducted by ‘World Economic Forum’ in 2015, three fourth of respondent expected that by year 2025, thirty percent corporate audit will be performed by AI. Welch (2017) has mentioned that, auditors will be able to use the cognitive technology in the field of tax planning and compliance will see a dramatic change in the next few years. As per Eleanor O’Neill (2016) big 4 accounting firms are already having a taste of artificial intelligence in their day to day workings e.g. since 2015 KPMG is using predictive analysis techniques (MAT) in its audit process and also aligned with WATSON to read the complex documents with given criteria. Similarly in 2016, to provide better auditing and consultancy services, Deloitte made an alliance with Kira System to read and analysis the complex and unstructured contracts and policies of the client. With the introduction of Kira System not only the employees are spared from doing the mundane task but it also has speed up the process (CISION, 2018). To harness and to predict the potential disruption of financial technology, PwC internal analysts and its clients are deploying a tool named DeNovo in their day to day workings (MIT, 2018)
As per the report KPMG is already using AI tools in its audit matter to distinguish between an expense which constitutes a deductible repair and one that is a non-deductible. By using the different aspects of AI auditors will be able to have the full-fledged knowledge about the entity. Issa et al. (2017) stated that “by scaling human skills and judgment through the application of cognitive technology, auditors will gain a more comprehensive understanding of aspects of the business” e.g. Deloitte Kira system is able to extract every bit of contract information depending upon the provided criteria.


I'm Alfred!

We can help in obtaining an essay which suits your individual requirements. What do you think?

Check it out