Accounting Theory & Contemporary Issues: AI's Role and Impact

This report examines the profound impact of Artificial Intelligence (AI) on the accounting profession, exploring how AI is reshaping the roles and responsibilities of accountants. The report begins by defining AI and its capabilities, then analyzes how AI has transformed accounting practices in recent decades, from automating routine tasks to enabling advanced data analysis and forecasting. It highlights the opportunities presented by AI, such as improved efficiency, quality output, and reduced errors, while also addressing the threats, including potential job displacement and data security concerns. The report emphasizes the need for accountants to adapt and embrace AI technologies to remain competitive and leverage the benefits of these advancements. It concludes by summarizing the key findings and emphasizing the importance of strategic AI implementation in the accounting field.

Accounting Theory &
Contemporary Issues

Table of Contents
INTRODUCTION...........................................................................................................................1
1) Meaning of Artificial Intelligence..........................................................................................1
2) Analysis of how Artificial intelligence change the work of accountants in recent decades...2
3) Opportunities from the use of Artificial Intelligence.............................................................3
4) Threats from the use of AI .....................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
As the science and technology is evolving rapidly, machines are taking place of human
beings and conducting work more effectively and efficiently (Cohen and Feigenbaum, 2014).
The scientists and researchers are focusing on improving the artificial intelligence concept and
mechanism in order to bring the scientific revolution. In accordance with this context, the
purpose of report is to cover the aspects and role of artificial intelligence that change the work of
accountants in recent decades. The report will be presented to manager of accounting
organisation. This report will examine the opportunities and threats of using artificial intelligence
in the organisation with the help of critical analysis and reviewing the articles of senior
researchers.
1) Meaning of Artificial Intelligence
According to the father of Artificial Intelligence, John McCarthy, it is “The science and
engineering of making intelligent machines, especially intelligent computer programs”. Artificial
Intelligence is a way of making a computer, a computer-controlled robot, or a software think
intelligently, in the similar manner the intelligent humans think. Artificial Intelligence is
accomplished by studying how human brain thinks, and how humans learn, decide, and work
while trying to solve a problem, and then using the outcomes of this study as a basis of
developing intelligent software and systems (Pannu, 2015). The purpose of creating the artificial
intelligence programs is to reduce the manual efforts and to create a expert system. The system
which exhibit intelligent behaviour, learn, demonstrate, explain and recommends its end users.
The mechanism of artificial intelligence is so advance and complex that it can efficiently do the
task which it has been programmed for. It is beyond the imagination and perspective of an
individual.
An artificial intelligence computer system can adapt and also solve the generic problems
that a computer with AI couldn't solve. All sorts of industries and organisation has been affected
by the artificial intelligence programming and computers. It not only aid in solving the complex
problems but also assist in increasing the effectiveness in the quality of the products and services
of the organisations. Rouse (2016) said that artificial intelligence is the simulation of human
intelligence process by machines and computer system. Artificial intelligence is one the biggest
milestones which is achieved by the scientist and engineers that revolutionised the field of
science and technology. Now many organisations and industries implementing the artificial
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intelligence in their organisation in order to save cost, time and efforts. Though, there is a
negative side of artificial intelligence as per Kaplan (2015) as it is very expensive and
complicated. In order to comprehend the artificial intelligence computers, engineers requires
tremendous efforts and organisation will require heavy investment.
2) Analysis of how Artificial intelligence change the work of accountants in recent decades
Artificial intelligence capturing the accounting industries rapidly. In the recent decades
many accountants relied on the computing the huge calculations within seconds with the help of
artificial intelligence computer systems. From book keeping to preparation of the financial
statement, there can be tremendous amount of change can be observe in the field of accounting
after the implementation of artificial intelligence. According to Siau, (2017) the artificial systems
are so advance that they can analyse the current position and forecast the future position
accurately and efficiently. It benefited the accounting industries greatly as accountants now able
to save the cost and time easily. AI is technology that enables computers to perform decision-
based tasks previously left to humans. It shows up in multiple forms, including machine-based
learning that can progressively become better at analysis and decisions the more it is used, and
speech-based technology that can understand different voices and languages. Thus, it helps in
quickly and efficiently analysing and interpreting the data and information which takes much
time and effort if done manually. Wenger, (2014) argues that no matter how advance these
technologies will get, it will not able to replace human beings. The computer software do what
they are being programmed to. Even they installed with the reasoning ability, they wont able to
do the task which human mind can do. In accounting industries, instead of being afraid of
artificial intelligence, accountants needs to comprehend the technology so that their tasks and
work can be completed effectively and efficiently.
As per Parkes and Wellman, (2015) artificial intelligence are replacing the human beings
and employees in the accounting industries. It negatively impacts on the psychology of the
employees plus existing managers and supervisors faced difficulties in order to provide training
so that employees can learn how to work on artificial intelligence computer system. Kokina and
Davenport, (2017) suggests that instead of eliminating the human workforce from the
organisation, the management must trained them by taking help from external expertise. The
effective coordination between man and machine can lead to the growth and development of the
organisation.
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3) Opportunities from the use of Artificial Intelligence
There are various opportunities that accounting industries can capture by initiating and using
artificial intelligence in their organisation (Patassini, 2017). These opportunities will aid in
promulgating the business of the organisation and assist in delivering excellent outputs to their
respective clients or customers. In accordance with this context, the opportunities from the use of
Artificial Intelligence are listed below: Improving the efficiency: Artificial intelligence computer software can improve the
efficiency of accounts. An accountant will able to analyse and interpret the data
efficiently and advance technology will able to comprehend the data and information
within seconds (Cohen and Feigenbaum, 2014). This aid in reducing the time and effort
of accountants and they can improve their efficiency adequately.
 Generating quality output: Implementing artificial intelligence computer system will
provide an opportunity for the accounting organisation to generate the quality results that
will impress their clients and customers. This will aid in increasing the productivity and
profitability of the organisation will also assist in saving cost and time of the accountants.
Thus, accountants will able to generate the quality output effectively and efficiently.
 Reduce high profile failure: artificial intelligence is the software that helps to the
accountant to identify the issues and faults. It can e identify the issues and fault in the
accounting system. By using this systems the companies and accountant can easily
manage their work and also helps to identify the faults in the management. Accountant
must need to use artificial intelligence which helps to increase a work efficiency and also
helps to identify the faults in the accounts. It generates the accurate results and a firm can
easily get higher performance in the market. By getting accurate results a firm can easily
prepare effective annual report of a firm (Huhns, 2012).
 Increment in market share: There are different types of software that gives accurate
results and firm can easily get desired target in a market. By using artificial intelligence
in the firm they can easily increase a number of market share in an industry. This
software helps to get accurate results and also helps to increase a market share. Increment
in market share helps to increase overall firm performance in the world. By using this
type of software firm can easily maintain their firm data and keep record of information.
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It helps to increase a market share and company can easily get desire target in an industry
(Ramchurn, Vytelingum, Rogers and et.al., 2012).
4) Threats from the use of AI
Threats loss of information: By using artificial intelligence the company can easily get accurate
results and also get desired target in a world. There are some threat from the artificial
intelligence such as loss of information. Company can loss the information and data that
has negative impact on the firm. To overcome the threat firm needs to follow advanced
technologies that helps to solve the appropriate threat in an entity.
 High cost: Artificial intelligence has the high cost every company cannot use this kind of
software so it directly affects the firm performance. Firm can easily get accurate data by
using this software so that the can easily increase a performance in a market. If company
wants to use the software then they need to prepare the business plan and set the cost so
that it will not affect the overall firm performance in a market (Charniak and et.al., 2014).
CONCLUSION
Artificial intelligence helps to increase a work efficiency and also helps to increase a
number of market share in the market. By getting accurate result a company can easily prepare
annual report of a firm. Accountant can easily get accurate output and also helps to increase
overall productivity in the world. It has many benefits such as increment in market share,
increment in performance and productivity. There are different types of opportunities for the AI
it helps to increase a market share and also helps to increase a sales revenue in a market. It also
helps to get accurate results so that company can easily maintain the data and facts. By using
artificial intelligence a company can easily get higher productivity and also get higher
performance in an industry. It increases the work efficiency and increase a sales revenue of the
firm.
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REFERENCES
Books and Journals
Kaplan, J., 2015. Humans need not apply: A guide to wealth and work in the age of artificial
intelligence. Yale University Press.
Cohen, P.R. and Feigenbaum, E.A. eds., 2014. The handbook of artificial intelligence (Vol. 3).
Butterworth-Heinemann.
Pannu, A., 2015. Artificial intelligence and its application in different areas. Artificial
Intelligence, 4(10).
Siau, K., 2017, August. Impact of Artificial Intelligence, Robotics, and Automation on Higher
Education. In Americas Conference on Information Systems (AMCIS 2017), Boston, MA.
Wenger, E., 2014. Artificial intelligence and tutoring systems: computational and cognitive
approaches to the communication of knowledge. Morgan Kaufmann.
Parkes, D.C. and Wellman, M.P., 2015. Economic reasoning and artificial
intelligence. Science, 349(6245), pp.267-272.
Kokina, J. and Davenport, T.H., 2017. The Emergence of Artificial Intelligence: How
Automation is Changing Auditing. Journal of Emerging Technologies in Accounting.
Patassini, D., 2017. Beyond benefit cost analysis: accounting for non-market values in planning
evaluation. Routledge.
Charniak, E. and et.al., 2014. Artificial intelligence programming. Psychology Press.
Ramchurn, S. D., Vytelingum, P., Rogers, A. and et.al., 2012. Putting the'smarts' into the
smart grid: a grand challenge for artificial intelligence. Communications of the ACM.
55(4). pp.86-97.
Huhns, M. N., 2012.Distributed artificial intelligence (Vol. 1). Elsevier.
Online
Rouse. M, 2016. AI (Artificial Intelligence). [Online]. Available
through:<http://searchcio.techtarget.com/definition/AI>
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