[University Name] Accounting Theory and AI Implementation Report

This report, prepared for the CEO of [Name of the Organization], investigates the implementation of Artificial Intelligence (AI) in the accounting sector. It begins by defining AI and its impact on various sectors, followed by an analysis of specific problems within accounting that AI can address. The report then delves into the practical challenges faced during AI implementation, including data quality and skill gaps, and the potential threats AI poses. It highlights the positive results of AI integration, such as increased efficiency and accuracy, and explores the opportunities for accountants to focus on higher-value tasks. The report concludes with recommendations for successful AI adoption in accounting, emphasizing the need for skilled professionals and strategic planning. The report discusses the benefits of AI in streamlining operations, reducing costs, and improving decision-making. It also addresses the fear of job displacement and emphasizes the importance of accountants adapting to new roles, leveraging AI to enhance their services and client relationships.

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
To The CEO,
[Name of the Organisation]
Enclosed is the report commissioning of the implementation of Artificial Intelligence in
the Accounting sector. The main findings of the report are:
 Accounting problems
 Practical challenges faced in the implementation of AI and threats
 Results of Implementing AI in Accounting field
 Artificial intelligence in Accounting Sector
Finally, I would like to thank you for providing me the opportunity to present this report which
gave me an opportunity to familiarise myself with the range of implementations that can be
done in the accounting sectors.
Yours sincerely
[Name]

i
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Accounting Theory and Contemporary Issues
[Name of the Student]
[Name of the University]
[Author note]

ii
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Executive Summery
This report mainly discusses about the Artificial Intelligence or AI. Along with this the report
also discusses about the various effects of the artificial intelligence in the accounting sector.
The first portion of the report mainly discusses about the basic concept of artificial
intelligence. And how it is effecting the different sectors. Then the report discusses about the
various problems in the accounting sector which is followed by the effects of the artificial
intelligence in the accounting sector. The report also provides a brief description about the
various challenges that are being faced during the implementation of the artificial intelligence
in the accounting sector. This followed by a brief description about the effect of
implementation of artificial intelligence in the accounting sector. This is followed by the
recommendations regarding the use of artificial intelligence.

iii
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Table of Contents
Introduction:.............................................................................................................................1
Discussion:...............................................................................................................................1
Accounting problems:...............................................................................................................1
Practical challenges faced in the implementation of AI and threats:........................................2
Existential Treats of AI in Accounting Industry:....................................................................3
In-adequate skills:.................................................................................................................3
Results of Implementing AI in Accounting field:.......................................................................3
Opportunities of Artificial intelligence in Accounting Sector:....................................................4
Conclusion:..............................................................................................................................6
Recommendations:..................................................................................................................7
References:..............................................................................................................................9
Bibliography:..........................................................................................................................10

1
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Introduction:
Artificial intelligence or AI mainly refers to the intelligence that is displayed by the
machines. This is in contrast with the natural intelligence that are displayed by human beings
and other living creatures. From the field of computer science AI can be defined as the study
of the Intelligent agents. Which means that any device that is capable of perceiving the
environmental condition along with taking of the required action for the purpose of achieving
success at some defined goal (Kanal and Lemmer 2014). It is stated that the scope of AI is
disputed this is because of the fact that the machines are becoming more capable of doing
tasks which considers intelligence as one of the important aspect but they are often removed
from the definition. And this phenomenon is known as the AI affect. Ai was founded in the
year of 1956 as a discipline for the academics which was followed by several waves of
optimisation. And initially it was followed by disappointment along with loss of the funding’s.
After suffering all this new approaches were adopted for success and renewed funding’s.
The concept of AI was coined by an American scientist named McCarthy in the year of 1956.
This report mainly discusses about the application of Artificial Intelligence in the accounts
sector. Along with this the report discusses about the opportunities that are coming from the
use of Artificial Intelligence (Omoteso 2012).
Discussion:
Accounting problems:
An important role is played by the accountants in any type of organisation. The
accountants make use of their technical knowledge in accounts and finance for the purpose
of helping out the business or the stakeholders in taking better decisions (Lee Shih and
Chen 2012). For the purpose of supporting their decision- making along with the advices the
accountants require a financial as well as non-financial information of high quality along with
analysing that information’s. this type of incident has been reflected in a wide range of
accountancy roles across different type of business practices for the purpose of capturing
along with the preparing, checking and communicating of the various types of information’s
so as to undertake the analysis along with making a wide variety of decisions.
The main reason for deployment of technology is to help the accountants provide a
better advice along with making better decisions (Mylopoulos and Brodie 2014). The main

2
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
reason for implementation of technology is for solving the three broad problems and those
problems are listed below:
 Providing a data that is better and cheaper so as to support the process of decision
making.
 Development of new insights from the data that is analysed.
 For freeing up of the time of the accountants so as to let them focus on more
valuable tasks like the making of decision, solving of problems, providing advice,
development of strategy, building of relationship and also for leadership (Tennyson
2013).
Practical challenges and threats faced by implementation of AI:
Practical Challenges:
The volume of the data along with the quality of the data is very much crucial for the
success of the Artificial Intelligence. Models are simply unable to learn is the data is not
good enough. The data of the transactional account is well structured along with being of
high quality. So this should be very much promising in the starting point for the development
models. But the issues that are long standing and are present around the data of most of the
organisations (Parkes and Wellman 2015). This is especially for the complex and the
unintegrated legacy systems and this the major challenge that is in practice right now.
Besides this it is also difficult to know in advance that how much will the machine
learning be successful. Learning of the models are based upon the specific dataset. So the
building up of this experiences of successful along with the less successful cases will be
greatly help in production of the information required for future adaptations.
Existential Treats of AI in Accounting Industry:
AI tool is something that has the ability of replacing all the existing accounting
software or is capable of running on top of every accounting software or ERP. This stands
out to be a challenging proportion. Accounting threats requires a lot of judgemental activities.
There is a need of lot of data scanning as well as the data entry which is done by the
machines. But still we are very away from a totally automated robot who is far away from
performing tasks without any human interventions(Tennyson 2013). There is still absence of

3
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
a machines which are capable of understanding the dis-organised data sets along and
making calls related to judgement or taking any sort of decision.
In-adequate skills:
The skills that the accountants of today’s world are having may not be relevant in the
coming future. The people who are associated with constant upgradation of their skills
regarding the analysis as well as decision making are capable of surviving the onslaught due
to the emerging technologies. The maximum amount of risks is faced by those accounting
professionals who are having the minimal skill (Tennyson 2013). The threat rising due to AI
for the accounts has no difference than the threat that an employee faces due to robots.
There are several big organizations that make use of the technology for doing their audits
and most of their works are based on the analytical procedures and are aided by the
computerised audit tools.
Results and opportunities of Implementing AI in Accounting field:
Results:
Firstly, it can be stated that the integration of machine learning is being done on the
accounting software’s at an increased rate. Due to this reason many of the accountants will
be encountering the machine learning without even realising it. This is almost similar to the
use of the capabilities used in the online searching or for activities regarding shopping
(Lambiase and Di Ilio 2013). This is the way in which the smaller organisations in particularly
are most likely to adopt the artificial intelligence.
Secondly, when the AI capabilities are adopted consciously so as to solve the
specific problems related to business or accounts will be requiring a substantial investment.
Despite of the presence of lot of software that are free and are from open sources there
might be a requirement of established suppliers due to legal and regulatory reasons (Cohen
and Feigenbaum 2014).
Opportunities:
Artificial intelligence has been affecting almost all sorts of industry and accountancy
is not an exception. There are many accountancy practices which have started the

4
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
implementation of the advanced technology for the purpose of streamlining their operations.
The general outcome as a result of this saving of time along with reduction in the cost
associated with increase in production and better accuracy (Sharma and Panigrahi 2013).
The accountant of any organisation wants to help the economy of the organisation. Every
activity that is associated with accounting ultimately aims at the good of the decisions made
by individuals.
More radically different approaches are enabled by the intelligent systems for the
purpose of gaining the ultimate objective along with the various kinds of fundamental
problems related to the business. There is an essential need of the investors to gain the
confidence and trust in the results of the financial matters of the organisation (Ma et al.
2014). There is an essential need of every organisation and government to check that the
right level of taxes is being paid. The accountants are having an access to large amount of
data but the time required for analysing them is very much low. Thus a great opportunity is
created for the AI to analyse this data instead of the accountants. An improved process of
data processing and machine learning will be brought down by the application of AI. This will
be taking away a huge amount of the different work processes of the accountants.
This will be leading towards an invisible accounting that is the artificial intelligence
will be able to optimise the total accountancy system by extracting the slogs and the
inefficiency (Couso and Dubois 2014). This can also be done by entering the data along with
analysis of the large data samples for the purpose of delivering the results at a faster rate
along with being much more accurate.
All these things are completed by the machine learning along with optimisation of the
total accountancy system. This will be greatly helping out the business by staying compliant
along with saving the time by automation of the tasks (Wenger 2014). Despite of replacing
the repetitive work there remains a common fear that is the thought of what will be
happening to the accounts if the AI becomes a norm.
Receipt Bank stated that it is true that the machine learning will be replacing some of
the low-level bookkeeping roles (Blei 2012). This is because of the fact that AI is much more
accurate during the processing of data and this change also cannot be dreaded. New
opportunities are brought by this technology so as to add values. And this provides an
opportunity to the accountants for augmenting their capabilities and the services.
Value is added to the clients and firms by the Human professionals in such a way
which cannot be provided by the artificial intelligence. One example is providing training to a
new accountant for giving the work of advisor at a higher level. Artificial intelligence relives
the accountants from any type of processing work thereby providing them the time for

5
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
focusing on the advisory side of the accounting department (Wu Chen and Olson 2014). This
will favour the accountants in deepening the working relationship that exists between the
clients and the accountants. Along with this the accountants will also be able to deliver an
advice of more human kind.
The use of artificial intelligence has been adopted by many firms like the 2017
Practice Excellence which shortlisted the firm inniAcounts in the category of pioneer
innovative firm. This has been applying machine learning so as to automate and build the
knowledge hub for its clients.
The most important challenge that is being faced by this accounting profession is the
striking of the balance that exists between them. Then the AI will be let to take care of the
basic elements related to Accounting so as to make the accountants focus on the other
tasks that they are capable of doing in a better way than the computers.
Arguing is done by the auditors about the harnessing of powers of data mining along
with the use of Artificial Intelligence so as avoid any kind of high profile errors (MacIntyre and
Korbut 2013). It is also stated by them that by automation of some of the repetitive manual
tasks will largely help in the improvement of the efficiency of the work that is being done.
The changes that are taking place in a procedural way and are being brought by the
AI may lead to some controversy like the security of transitions (Ramchurn et al. 2012). But
due to the presence of the accounting professionals for the final approval of all the tasks that
are being performed by Artificial Intelligence will be helping in the controlling of any kind of
sensitive information that they require.
The nature of the machine learning techniques is leading themselves for the
substantial improvement in almost all the areas of accounting. Besides this the machine
learning also equips the accountants with new capabilities that are very much powerful along
with automating many types of tasks and decisions.
So the importance of identification of the accounting and the business problems
increases. The identification of the problems is needed so as to find out the particular
regions in which machine learning can be very much fruitful (Hippe 2013). The need of the
business drives the adoptions of the efforts instead of the technology capabilities that are
simple in nature.
One of the noticeable change that is affecting the compliance is the way in which the
data is being handled along with the way in which it is being processed. This handling and

6
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
processing of the data is a completely automated process (Yaseen et al. 2015). This greatly
helps in enabling of the accounting pros to get more reliable along with the fast data that is
included in almost all the tax reports that gets generated.
The most likely impact that has been brought by artificial intelligence is the change in
the mind-set of the accountants. Accountants are getting more savvy towards the technology
along with the new technologies that are also refreshing (Rich and Waters 2014). This is the
thing which has been needed by the accounting industry for a long time.
This new wave of innovation is continuously hitting the shores of this industry along
with the continuations of the implementations of the improvements. Once the accountants
get the taste of the disruptive benefits that are to be brought by the new technology that is
artificial intelligence then they would never think of stopping (Kim Reiner and Batory 2012).
This will be a virtual habit of the accountants to have which will be a prominently tangible
result.
Many of the Accounting professionals are very much aware of the latest trends in the
market which includes AI along with the Bots (Sarraute Buffet and Hoffmann 2012). The
accountants are making use of the artificial intelligence to assist them in their work and this
not because of the reason that they have to but this is because of the reason that they want
to.
Conclusion:
This report helps in concluding the fact that despite of the drilling of Artificial
Intelligence in the accounting sector, there are still many parts of this sector who have not
adopted this technology fully. And for adaptation of AI in every part of this sector there must
exist a singular tool or an event so as to disrupt the traditional method of handling the data
manually. Pop-up of new innovative tools will continue to happen and these pros will be
greatly helping in keeping of a good pace when the matter of trying the artificial intelligence
unless and until this becomes a standard. By the year of 2030 all the low-level works related
to accounting will become fully automated. The use of AI in the accounting sector is
expected to enable the ability of the professionals to analyse the information’s along with
acting on them. This is also associated with less distraction of the processing data. The
accounting sector should think of the artificial intelligence as an enabling tool instead of
thinking it as a competitor. This tool should be used to leverage the precious time of the
professionals along with improvement in the job satisfaction. In a similar way if the
accountants start using this artificial intelligence for the purpose of preparing the financial

7
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
statements then there is a need of developing standards. This standard will be used to
evaluate the reliability of the systems like black box. When an organisation adopts the new
technology then many new threats will be introduced and as artificial intelligence have many
difficulties so there remains a risk of misleading. For this reason, every organisation needs to
monitor the performance of the AI system. Humans will not be able to win the competition of
data processing with the machines. Along with this in a similar way the artificial intelligence
systems are not adapted to the process of self-correction in the new circumstances. And if
there is a miss by artificial intelligence then the circumstances are very much crucial.
Artificial Intelligence helps in reaching a higher level of accuracy is which much more than
the same task performed by humans.
Recommendations:
 The accounting sector is most widely known for outsourcing the process of auditing
(). This process can be easily automated by implementing AI. The AI can thus be
utilized to perform various routine tasks for auditing. However, machine learning is
not entirely reliable. It might overlook some mistakes or the AI might be facing some
shortcomings while taking decisions. A machine should never be relied on for the
decision–making process. The participation of a human to oversee the auditing
process is thus highly recommended even when an AI can outperform the human.
 Taxation is another sector where AI can be applied to make the process fast and
effortless. Tax calculation is one area that is highly dependent on time. The
calculation can be automated to save time and resources. Tax experts can be
implemented to act as a guide for the whole process. The required number of experts
would be significantly reduced in an AI environment. The AI implemented for the
taxation process can be further programmed to predict the tax structure of individuals
by analysing their income structure and their income growth.
 Maintaining government finance records and highlighting key deficiencies are other
sectors where AI can be efficiently applied. Many a times it is observed that, the
amount data analysed is low and thus poor fund distribution takes place. It is strongly
recommended that AI be used for monitoring the fund distribution process between
different government sectors as it can be used to analyse large amounts of data
about the current condition of the different government sectors. Thus, it can be
programmed to provide the necessary solutions that would help in efficient fund
distribution.

8
ACCOUNTING THEORY AND CONTEMPORARY ISSUES
 AI can also be used to facilitate Cost Accounting, which is another area that needs
automation. The process entails different complex and time-consuming calculations.
AI can be utilized for automating such processes along with employing experts who
proofread the results to check for errors.
 AI can multitask whereas humans cannot. It can be recommended that this ability of
an AI must be effectively used by the companies to maximise the work they can do.
Data can be mined about the present market conditions and then after analysing that
data, an AI can successfully project the future market data. The companies to
provide financial planning to their clients can use this data.
 The mined data can be even used to project the values of an individual’s assets and
savings in the future. The companies would be able to provide specific suggestions
to their clients about their assets and withdrawal plans. The suggestions would be
more accurate than one given by a human accountant. The AI would be utilizing the
data received from all over the world on a wide range of time. Processing such huge
amounts of data is only possible for a machine and not a human.
 Machine learning will be developed further in the future. It is recommended that
different accounting companies must keep themselves informed about the application
of AI and must implement any upgrades that are released into the market to gain
advantage over their competitors.