Fourth Industrial Revolution: will accountancy survive the rise of artificial intelligence?

Speaking to the BBC this week, chief economist at the Bank of England Andy Haldane said that disruption caused by the Fourth Industrial Revolution would be “on a much greater scale” than that experienced during the First Industrial Revolution in the Victorian period. Advising that the UK required a skills revolution to counteract individuals becoming “technologically unemployed”, Haldane said that training was necessary to ensure workers could leverage new job opportunities as they became available in the era of artificial intelligence.

The accountancy industry is one sector primed to capitalise on the rise of artificial intelligence and machine learning. The sector has already embraced automation, with intelligent software removing the traditional compliance aspect of the accountant role. And, as the government’s Making Tax Digital initiative edges ever closer, the implementation of a digital tax system has encouraged accountants across the UK to confront how they view and employ technology on a day-to-day basis.

For some individuals, these developments have presented the perfect opportunity to automate manual tasks, provide added value for clients, and set up practices or businesses for the future. But for others, technological advancements have thrown up significant obstacles, including increased costs, time commitments and training requirements.

Yet, whatever the degree of individual enthusiasm or reluctance for the rise of machine learning and artificial intelligence, all the signs indicate that accountancy will continue its journey down the revolutionary path. But what does this mean for the role of the accountant? How can accountants stay relevant in the digital era? And ultimately, will accountancy survive – and thrive – amid the Fourth Industrial Revolution?

What is artificial intelligence?

Artificial intelligence is the presence of intelligent behaviour in machines, with computers able to conduct intelligent processes akin to those of humans. Examples of artificial intelligence in the accountancy industry include leveraging technology to sift and analyse data, including the use of predictive analytics in audit cases; process client accounts by the way of speech recognition; or review legal document and contracts.

What is machine learning?

Machine learning is a branch of artificial intelligence. It develops computers to think in the same way as humans and is the process of enabling machines to learn over a period of time. Through machine learning, computers are not programmed to act in a particular way, but instead learn how to do so based on previous interactions and data feeds.

Survival of the accountant

While in recent years the accountancy industry has grappled with the question of whether accountants will be replaced by technology, the discussion has now shifted to focus on adaption to the digital era. It’s no longer a question of if the role will change – it’s now widely accepted that it will, to varying degrees – but rather how it will change, and to perhaps a greater extent, how do accountants equip themselves with the necessary skills to thrive in the changing world.

As Haldane has argued, new skills are required to comfortably work alongside artificial intelligence and machine learning. He has suggested that while technological advances might result in job losses, numbers will be mitigated by the creation of new roles as we transition to fully embrace technology in the workplace.

For accountants, this transition involves shifting towards the role of business adviser and offering value added services to clients. Analytics and reporting may eventually be entirely assumed by machines, but accountants in industry and practice need to have the capabilities to use the data generated by technology to help clients and company management inform business decisions, including growth strategy, pricing models, and risk identification.

As such, new skills are critical. Accountants need to be confident with technology and develop business acumen outside of the traditional “numbers” responsibilities. They need to be able to think about the wider business picture rather than limiting themselves to the finances of an organisation.

Communication skills will also take on increasing importance. As accountants begin to spend more time with either clients or the wider organisation focusing on business strategy, they will require excellent communication and interpersonal skills, instilling a sense of trust and confidence in the businesses and departments they advise.

No doubt this will be what some accountants are already putting into practice. With automation reducing the amount of time spent on manual tasks, accountancy professionals around the UK are already seizing the opportunity to offer something extra to clients, positioning themselves at the forefront of the competition.

The human element

But does artificial intelligence and machine learning signal the beginning of the end for accountants, sparking a gradual demise in the profession?

No, or at least, not any time soon.

We are still very much in the early days of adopting artificial intelligence and machine learning for day-to-day activities of businesses and accountancy practices in the UK.

While the speed of technological developments can be alarming, machines are not a replacement for human intelligence in accountancy, or any other industry. And when it comes to clients, a good number of businesses still prefer the human element of communication and advice.

Previous indication as to the readiness of the accountancy industry for a profession seamlessly integrated with the use of artificial intelligence would suggest that the sector is not yet quite there.

Yes, it has taken considerable steps forward by adopting automation, but there is still a long way to go.

Take Making Tax Digital, for example. The initiative has been amended and delayed numerous times and while it is now full steam ahead for April 2019, the process by which it has taken to get to this stage indicates that technological advancements cannot be rushed or implemented without careful consideration of the consequences.

Increased efficiency and productivity are two key goals for the accountancy profession and technology must play a leading role in achieving those objectives. But in order for it to do so, collaboration across the industry – between practices, businesses, clients, accountancy bodies, software companies, and government – is crucial to ensure the sector thrives in collaboration with technology rather than faltering in opposition to it.

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