Workforce Impact: The Benefits

Technology is more advanced than ever, yet accountants are constantly bogged down by manually inputting data into platforms like Microsoft Excel, tying out financial statements in Adobe Acrobat, and waiting for client documents. These menial and repetitive tasks of accounting are grueling. It is this redundancy that frequently leads to human error.

The implementation of Artificial Intelligence (AI) can eliminate human error and detect any prior mistakes. Forbes released a study suggesting that by 2020, AI will be able to complete financial tasks like audits, payroll and tax returns (CPABC, 2018). This disruption is of paramount importance because the tedious tasks currently plaguing staff accountants will no longer be an issue. Additionally, since AI is not prone to human energy levels, the technology will be able run all day with minimal maintenance.  This will ensure consistent performance and enables employees to complete tasks faster while still minimizing mistakes.

The idea that accountancy will become a lost profession is a talking point for individuals resistant to the change happening within the industry. In reality, this wave of new technology will allow accountants to be more proactive towards new business endeavours for their clients and shift into more value-added roles. Working in an industry highly defined by client interactions and services, AI and Machine Learning will serve as a resource to employees when working with clients.

So, what is there for accountants to do with their newfound freedom? With the implementation of AI, this industry will be able to provide a more robust service through strategy development, decision-making and through building stronger relationships with the clientele. As accountants see where problems are arising through the computation of big data, AI can be adjusted to improve efficiency in that area. Although this technology is novel to accounting and the kinks cannot be avoided, the 4th Industrial Revolution will boost overall efficiency and lead to a whole new look for the accounting field.

Workforce Impact: The Challenges

In wake of these technological advancements, management is posed with a key challenge: how to reshape the workforce. A direct consequence of the adoption of these new technologies is the introduction of a skill gap between the current workforce and future demand. The workforce can expect a steep learning curve as there will be a shift in focus to equip employees with the necessary skills to utilize Machine Learning and AI. From the perspective of management in firms, this will change Key Performance Indicators and criteria currently used to evaluate employees.  In order for the benefits from automation to be fully absorbed, training programs will need to be revamped to focus on familiarizing employees with the use of new interfaces and software. For CPABC, this technological advancement in the accounting industry brings forth the question of how the CPA Designation will be changed to meet the evolving role of an accountant.

Another foreseeable challenge for CPABC will be overseeing changes in the size of the workforce. While reduction in human capital expenditure is of benefit to the firms, employees will be faced with decreased job security. As automation will replace many of the simple tasks completed by employees, it is expected firms will be dealing with a labour surplus until the roles and responsibilities of staff accountants are reconfigured. Particularly in the audit and tax service streams where clients are billed by the hour, fewer hours will be recorded for clerical tasks. To put perspective on the magnitude of this change, Nordea NDA.ST, the Nordic region’s biggest bank, states “that automation would help it to shed at least 4000 staff.”

In addition to changes to the current workforce, management and the human resource departments within firms will be faced with reviewing their succession planning strategies. As the business models of accounting firms shift, employees and prospective candidates will be faced with increased uncertainty about the future of their profession. During this transition period, firms and regulating boards like CPABC will need to be prepared to address employee concerns.

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