Applied Research: Assessment 3 - AI's Impact on Accounting

This report provides a comprehensive overview of the impact of Artificial Intelligence (AI) on accounting practices. It begins with a brief summary of AI's transformative influence, highlighting its role in improving efficiency and connectivity within business operations, particularly in accounting. The report explores the common findings across various articles, emphasizing the increased use of AI in accounting systems and its effects on transaction recording and accounting information systems (AIS). It also discusses different themes, including the impact of AI on accounting practices, regulatory frameworks, and the use of expert systems in auditing. The managerial implications section outlines strategies for regulating and monitoring accounting practices, including the compulsory implementation of AI in accounting standards and the monitoring of consumer data. The report also addresses study limitations of the articles and suggests areas for future research. Overall, the report emphasizes the ethical issues, benefits, and challenges associated with AI's integration into accounting, providing insights into how businesses can navigate this technological shift.

Applied research: Assessment 3

TABLE OF CONTENTS
Brief summary.............................................................................................................................1
Common Findings.......................................................................................................................1
Different themes..........................................................................................................................2
Managerial implication................................................................................................................3
Study limitation of articles...........................................................................................................3
REFERENCES................................................................................................................................5

Brief summary
With advancement in technology, Artificial Intelligence (AI) has emerged as the latest
technology that brought radical changes in the entire world on the whole. Primarily, it has
created a drastic impact on business operations and functions that bridged the gaps and foster
better connectivity and transparency as well. AI has provided a platform to improve their
efficiency and ease operational process. Now, AI has also been used in accounting that has
highly impacted on the accounting practices. As accounting is entirely based on several
principles it includes guidelines that must be followed. It provides a basic framework through
which different accounting practices are executed which has made the practices more convenient
and easier. AI has transformed the practices. There are several ethical implications which are
formed. Besides this, protection of consumer data is first priority in accounting practices. AI may
be completely involved in the monitoring and evaluating of compliance with regulations,
organizational policy, employee evaluations and even hiring and firing. Obviously, accounting
software is not new to the profession. Tax filing software has not put accountants out of business,
it has, in fact, made them more efficient and made it possible to file many more returns than they
could before.
There are various applications of accounting and also different types of accounting
systems. So, for each one different system is used. The main ethical issues that is been faced by
companies in using AI. They are lack of responsibility of auditor in case of system failure, etc.
Due to this there is negative impact of business. Beside this, there is lot of misuse of data and
information and authorities are not taking responsibility. Hence, several ethical implications are
formed. With help of it, AI is implemented in accounting. It could be noted that Institute Of
Chartered Accountant in England and Wales (ICAEW) is now exploring the more and more use
of Artificial Intelligence in way to improve existing service for the members and service user. As
AI is most powerful system which is also improving day by day with providing accurate and
exact results.
It has also been found out management accounting is one of the pivotal areas in providing
the ethical code of practices under the monetary and non monetary practices at organizational
context. The global disruptions led to more complicated challenges to survive the competition in
the marketplaces in terms of socio-economic and technological aspects. This proves beneficial
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for the companies to design robust frameworks to build positive relationships to promote welfare
of the society by focusing on the economic performance. Henceforth, it is clear that a broad
spectrum is applicable in leading the company’s financial components to make its presence
marked in the marketplaces at both global and local levels.
Common Findings
It can be analysed from articles that artificial intelligence is highly been used in accounting
system. This has completely transformed the way of preparing accounts and recording of
transactions (Steve and et.al., 2016). The use of AI has lead to development of accounting
information system (AIS) in Australia. Now, companies are dependent on using AI in
accounting. Artificial intelligence applications continue to gain traction in both accounting
research and accounting practice.
From article it is stated that the CPA and ICAA are the regulatory agencies that monitor
overall accounting principles. There are several ethics already been initiated by Australian
government that must be followed by companies. Besides this, professional accountants are
given specialised training to maintain ethics in accounting practices (Jeanette and Julie, 2014).
The forensic accounting regulation is set to reform financial services laws. There are many
standards set APES110, 215 and 225 which decide role of accountants in legal jurisdictions.
It describes about how expert system is used in accounting. There are many benefits of
using expert system. It has ease in recording transaction and providing audit report. However, the
system is also used in various practices like tax, management and financial accounting. By using
AI in accounting practices efficiency has improved. It has integrated overall accounting
practices. Alongside it, specialized training is provided to accountant to how use expert system.
Thus, use of AI has benefited in following principles as they are default installed in systems.
There is certain rise in ethical issue in accounting. It is related to control of AI system and
mitigating impact on business activities. Due to this management accounting is highly impacted.
It has also emphasized that the values, ethics, moral principles etc. takes into an account of
understanding the relationship between AI and management accounting with its overall impact
on the functionalities and operational activities of companies working in different sectors.
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Different themes
Article 1
It has been evaluated use of AI in accounting has increased recently. It has affected on
practices followed by organisation. It reflects on use of AIS in company. There is need to have
things easily. It is evaluated that there is more need of AI in accounting. So, there will be more
negative ethical impact on accounting practices.
Article 2
There has been a great impact on accounting practices due to AI. Therefore, in Australia
an act is formed that regulate overall financial reporting. Through the ASIC act 2000 financial
reporting council (FRC) is sole authority that is responsible for forming and implementing
accounting framework. The APSEB has to follow and comply with certain ethics. They have to
develop ethics for private, public and non profit organisation. Beside this, APSEB formulate
accounting standards. The consumer protection has been focused.
Article 3
The expert systems are used in for auditing. In this ethical issue is concern of use of
technology. One ethical issue is auditor liability in case of system failure. So, there is high risk of
failure that may results in errors (Mikos and Alex, 2016). Furthermore, there are several issues
been faced in expert system. So, accountants do not prefer to use AI in accounting. It requires
effective and proper network in which applications are installed. There are many application of
expert system it includes audit, tax, etc.
Article 4
It is analysed that how having an effective control in management accounting results in
dealing with issues (Jan Frank and Philipp, 2017). Besides this, it is essential to take proper
decisions in context to rules, values and other activities in accounting practices. The other
component is to facilitate planning for making proper decisions in controlling the key features
under the organizational framework. Moreover, the management accounting is mainly related to
seeking the socio-ethical issues to conduct the operations in m ore organised and proper modes.
Managerial implication
It has enabled in regulating and monitoring entire accounting. But these laws only help in
bringing transparency in accounting. So, it is important for authorities to take effective measures.
Firstly, the government should implicate AI compulsory in accounting standards for better
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results and proper execution. For this they should design framework that is specific for all
companies to follow. Another action that can be taken is monitoring of data and information of
consumers. Beside this, some standards can be set on basis of which professional behaviour of
companies are measured. Alongside it, the working of expert auditing system should be
regulated. It will ease in monitoring audit of companies. The government must decide functions
of auditors, tax officers, etc. It will enable in solving man ethical issues. They will be responsible
for loss of system failure. Alongside it, role of company management must be defined. Through
this, integrity of practices will be maintained. In addition to it, the system must be tested so that
there are less chances of failure.
Study limitation of articles
There are some limitations of articles that are described below:
Article 1
Limitation
It has only focused on AI and its features and there is less mentioned about ethical impact
on accounting practices.
Future research
In this research should be done is on ethics and how it has changed accounting practices.
There is need to
Article 2
Its limitation is there is only discussion on regulatory and legislative bodies and their
functions. The other aspects are missed and must have been linked to gain better clarity and
enhance the knowledge.
It has shown existing programs and training of professional accountants.
Future area
A study can be conducted that what ethical implications can be included in training and
how it will help professional in using AI.
Article 3
Limitation
There are only elements related to different types of AI systems in accounting are
described in detail.
Future area
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For each accounting system research should be conducted. By this it will be easy to
analyse ethical impact and provide measures to reduce it. Moreover, the effects are in positive
direction by studying the different models as well.
Article 4
Limitation
There are no measures or strategies included in the study. Moreover, the data gathered in
only theoretical with example of scandals of company.
Future area
The research can be conducted to identify measures and strategies how to implement and
maintain ethical implication in AI accounting system. This would pave the path of better
strategic planning while using the digital tools and techniques.
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REFERENCES
Books and Journals
Jan E. Frank h and Philipp S. 2017 Social and ethical issues in management accounting and
control. Journal of management control, Vol 28, pp 245-249
Jeanette V. and Julie A 2014. Regulation, Compliance and the Australian Forensic Accounting
Profession. Journal of Forensic & Investigative Accounting, Vol. 6, Issue 3,
Mikos A. and Alex K 2016 Artificial Intelligence in Accounting and Auditing: Towards New
Paradigms, Vol 4
Steve G and et.al., 2016 The reports of my death are greatly exaggerated”—Artificial
intelligence research in accounting. International Journal of Accounting Information
Systems. Pp. 14.
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