The Impact of AI on Accounting Systems: Future Implications

This report provides a detailed analysis of the impact of Artificial Intelligence (AI) on accounting systems. It examines the current and future applications of AI in various accounting practices, including expert systems, auditing, and taxation. The report highlights the contributions of AI, such as improved data analysis, automation, and decision-making support, while also discussing the rise of AI within accounting firms and the collaboration between humans and AI. It explores how accountants are adapting to AI capabilities, the impact on different accounting sectors, and offers recommendations for the successful integration of AI. The report emphasizes the need for accountants to leverage AI for generating insights, freeing up time, and providing better-quality data. It also considers the challenges and opportunities presented by AI in accounting, and underscores the importance of human expertise in conjunction with AI technologies. The report concludes by emphasizing the transformative potential of AI in reshaping the accounting landscape.

Running head: IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
Impact of AI on Accounting Systems in Future
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1IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
Executive Summary
This report is based on the various forms of impact that have been made with the impact of
Artificial Intelligence in the sector of accounting. With the latest forms of trends and
developments that have been made with the impact of AI within the sector, it has been seen that
AI has proved to be a major form of help for the development of technologies based on the
solving of problems based on the sector. This report discusses about the severe forms of impacts
that have been felt by the accountants and other firms that deal with the accounting works. The
report also suggest recommendations based on the improvement of the sector of accounting with
the use of AI technology.

2IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 Artificial Intelligence within Accounting Practices..............................................................3
2.2 Contributions made by AI.....................................................................................................4
2.3 Rise of AI within Accounting Firms.....................................................................................5
2.4 Collaboration of Humans and AI within Accounting Sector.................................................6
2.5 Use of Accountants with AI Capabilities..............................................................................7
2.6 Impact on Different Accounting Sectors...............................................................................8
3. Recommendations........................................................................................................................8
4. Conclusion...................................................................................................................................9
5. References..................................................................................................................................10
6. Bibliography..............................................................................................................................12

3IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
1. Introduction
Artificial Intelligence (AI) is regarded as the most significant and advanced technologies
in the recent times. The accounting databases have become as one of the major storehouses of
information based on different forms of transactions based on accounting systems. Cohen and
Feigenbaum 2014 have discussed that in the age of technological innovations, the sector of
accounting is not limited to the traditional methods. In the recent times, the computer technology
is widely used within accounting systems. The various forms of business organizations faces
various kinds of complex events that could not be used for process management. The various
accountants have embraced the impacts of automation based technologies that have helped in the
improvement in the field of accounting systems. According to Wenger (2014), in the future
decades, the intelligent systems would be taking over much of the decision that need to be taken
by humans. Accountants and various business sector would embrace the technological aspects of
AI and the benefits supported by them. The use of AI would also help accounting systems to
reimagine various kinds of opportunities and thus invest different kinds of business and
accounting solutions.
2. Discussion
2.1 Artificial Intelligence within Accounting Practices
With the major rise of technical developments, it has been seen that AI has been in use
within various areas of accounting sector. In the present times, the most common usage of AI
involves the use of expert systems. There are also some kinds of non-rule bases systems of
expert and neural networks that have been in major form of usage. Dalkir (2013) have stated that
external auditing is another kinds of sector that has been the centre of attraction of AI. In this

4IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
form of systems, the expert based systems are primarily developed and then are used by firms in
order to plan different kinds of audits over the systems.
Taxation is another form of domain, which has been majorly affected with the
development of improved form of AI systems. In the area of taxation, the use of AI systems
would be mainly be used for international, corporate, individual tax planning, compliance
checks, maintenance of tax status and uniform capitalization. Steels and Brooks (2018) have
stated that on the financial part, the different firms based on accounting mainly make varied use
of the different AI tools for providing various kinds of financial planning advices to their clients.
The banks also make use of AI software and tools for accessing the loan applications and thus be
able to grant them as per the needs of the applicants.
There are several kinds of small and large sectors within accounting that also make use of
management accounting systems. There are some companies in accounting sector that employ
the intelligent systems in order to provide various forms of assistance based on financial
planning to their employees. Bond and Gasser (2014) have stated that based on the review of the
accounting systems of different organizations, it has been seen that American Express employs
an intelligent AI systems in order to authorize the purchases made by customers. The AI systems
employed by IBM helps in supporting the field service representatives based on the placing of
bids. AI is now also used by different government agencies based on the welfare of the people.
2.2 Contributions made by AI
The technology based on AI could have a considerable effect on the different accounting
databases in order to mitigate the various kinds of existing problems. The AI based technologies
help in the development of models that could assist for the maker of decisions and thus would be
able to able to focus on meeting with the demands of the market. The different computing

5IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
systems that would be powered by AI software could be able to exploit the power of AI
technologies. Some of the AI based tools could be helpful for facilitating the broader
understanding of the captured events within the accounting systems. Rich and Waters (2014)
have suggested that with the capturing of the different kinds of models such as the intelligent
systems and AI tools, they could be helpful for facilitating databases for various kinds of users.
The integration of AI systems within the accounting databases could be helpful for
assisting within the investigation of several large volumes of data. The AI based systems would
be helpful for analysing the data. The works of Sol (2013a) would be able to assists the various
users for the better form of understanding and interpret the transactions in the accounting
systems. The different kinds of interfaces based on natural language processing could help in
facilitating the use of the most systems in accounting departments. Additionally, the various
kinds of cognitive processes and the structures of knowledge would be a major form of concern
within the development of AI infrastructure.
2.3 Rise of AI within Accounting Firms
The various kinds of accounting firms have invested hugely within the sector of
technology. Sutton, Holt and Arnold (2016) have stated that with the upcoming of latest forms of
technologies, it has been seen that AI could be of a major form of use within the sector of
accounting. They would be hugely helpful for solving different kinds of transactions and would
also be able to solve multiple queries. The small forms based on accounting would also think of
adopting.
The AI is a kind of technology that would be helpful for enabling computers for
performing the decision based tasks that used to be performed by humans previously. In the
recent times, the AI technology is being developed by several accounting firms. This form of

6IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
technology would be changing the face of the accounting firms in the coming years. West and
Bhattacharya (2016) have discussed that the study of Artificial Intelligence is largely been used
for digesting and analysing various volumes of data at different speeds. The use of AI has also
helped for developing a sophisticated version of the spreadsheets that would be able to perform
different kinds of transactions in a much more decision-oriented and analytical manner.
There are several kinds of accounting firms that made use of the traditional kinds of tools
for performing different accounting processes. With the advent of AI, auditors have made the
extensive usage of AI based tools that are supported by capabilities powered by natural language
processing. Liu and Vasarhelyi (2014) in their study have stated that the new form of technology
could prove to be useful for interpreting millions of contracts. The AI technology would be able
to extract the primary terms, compile them and perform deep kinds of analytics. This would
prove to be useful for gaining information about the key risks that might occur within the
accounting systems. Hence they would prove to be helpful for mitigating the several kinds of
risks.
2.4 Collaboration of Humans and AI within Accounting Sector
The advent of technology could be very much powerful and hence has been improving in
a quicker manner. The AI technology provides accurate forms of outputs based on certain kinds
of inputs that would be accurate. Hence, these technologies would be replaced and would
supersede the effort of humans. However, these kinds of technologies would not be able to
replicate the AI technologies. The study of Holtgrewe (2014) have discussed that humans should
be able to measure the strengths and weaknesses of the forms of intelligence and this would
hugely help for the successful collaboration of humans and machines to work together. The
extensive research in the field of AI have been focusing on the replication of the capabilities

7IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
based on human reasoning. The AI systems had attempted to capture the knowledge shared by
different experts and thus implement those form of ideas within the rule engines in order to make
different forms of decisions and thus suggest recommendations.
The approach based on the acceptance of AI based technology had some form of success.
There was a number of technical issues within such kinds of systems. These issues were later
solved with the high implementation of improved forms of technical systems Kokina and
Davenport (2017) have suggested that the recent forms of successes with the implementation of
AI in accounting systems would take a different form of approach. Rather than making a varied
use of top-down model of approach, the AI based technologies make use of bottom-up approach.
This would be useful for the learning if rules that would be based on observation of the activities
that would take place in the accounting sector.
2.5 Use of Accountants with AI Capabilities
Different accountants apply the technical knowledge based on finance and accounting for
helping stakeholders and businesses for the purpose of making better forms of accounting based
decisions. Chan and Vasarhelyi (2018) have discussed that accountants have been researching
for the use of technology in the past years that would prove to be helpful for them in order to
provide them with the best kinds of advices and thus take better forms of decisions. With the
effect of AI within the sector of accounting, the accountants have been helped for providing
better advices to the people by advising them with better decisions.
AI based technical services could be helpful for accountants for solving three forms of
broad problems. These are:
 Generate new kinds of insights based on the analysis of data.

8IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
 Freeing up of time in order to put major focus on important tasks such as building of
decisions, development of strategy, solving of problems, building relationships and thus
perform leadership.
 Provide cheap and better quality of data based on supporting of the making of decisions.
The research made by Jiang (2017a) have focused on the kinds of technology
implemented behind machine learning have helped majorly for the making of several vital forms
of improvements in every areas of accounting. These technologies have also equipped
accountants with the help of serving them with new kinds of capabilities that might be able to
automate the processes of work and thus also be able to support them with making of decisions
based on accounting services. Based on the understanding of Bravo (2014a), the various kinds of
problems that might be affecting the sector of businesses and accounting, it could be useful for
the AI technology to implement relatable solutions. This would ensure better forms of adoption
of AI technology based on the needs of different accounting firms.
2.6 Impact on Different Accounting Sectors
The use of AI within the accounting sector would also involve the use within the different
business aspects such as B2C, B2G, B2E, B2B and several other externalities. Chou and Bui
(2014) have studied that AI would also be able to impact these sectors as the technology has
massively impacted these areas. The technology has put major improvements within the sector
by impacting them with new functionalities and also serving them with the latest models of
technical services and softwares.

9IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
3. Recommendations
Based on the discussion from the report it could be recommended that the AI technology
have proved to be a major help for the accounting sector. The impact of predictive models based
on machine learning would be helpful for forecasting of revenues. AI should also be able to
perform varied analysis on unstructured form of data that includes emails and contracts with the
help of deep learning models. AI should also be improved within the use of the sector as they
would help for the detection of frauds within the systems.
4. Conclusion
The discussion within this report focuses on the major forms of impacts that have been
made with the implementation of AI technology. The roles of accounting have been changing
with the implementation of new kinds of technology. AI has brought about new kinds of
capabilities in the sector of data analytics. With the adoption of such latest forms of technologies,
the accountants would need to get trained based on the use of such kinds of skills. This would
also help in making of critical decisions and improvement of communication skills. Hence, it
could be concluded that the implementation of AI technology within accounting systems would
prove to be a major help for the further progress within the sector.

10IMPACT OF AI ON ACCOUNTING SYSTEMS IN FUTURE
5. References
Bond, A.H. and Gasser, L. eds., 2014. Readings in distributed artificial intelligence. Morgan
Kaufmann.
Bravo, C.E., Saputelli, L., Rivas, F., Pérez, A.G., Nickolaou, M., Zangl, G., De Guzmán, N.,
Mohaghegh, S.D. and Nunez, G., 2014. State of the art of artificial intelligence and predictive
analytics in the E&P industry: A technology survey. Spe Journal, 19(04), pp.547-563.
Chan, D.Y. and Vasarhelyi, M.A., 2018. Innovation and practice of continuous auditing.
In Continuous Auditing: Theory and Application (pp. 271-283). Emerald Publishing Limited.
Chou, J.S. and Bui, D.K., 2014. Modeling heating and cooling loads by artificial intelligence for
energy-efficient building design. Energy and Buildings, 82, pp.437-446.
Cohen, P.R. and Feigenbaum, E.A. eds., 2014. The handbook of artificial intelligence (Vol. 3).
Butterworth-Heinemann.
Dalkir, K., 2013. Knowledge management in theory and practice. Routledge.
Holtgrewe, U., 2014. New new technologies: the future and the present of work in information
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Jiang, F., Jiang, Y., Zhi, H., Dong, Y., Li, H., Ma, S., Wang, Y., Dong, Q., Shen, H. and Wang,
Y., 2017. Artificial intelligence in healthcare: past, present and future. Stroke and vascular
neurology, 2(4), pp.230-243.
Kokina, J. and Davenport, T.H., 2017. The emergence of artificial intelligence: How automation
is changing auditing. Journal of Emerging Technologies in Accounting, 14(1), pp.115-122.

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Liu, Q. and Vasarhelyi, M.A., 2014. Big questions in AIS research: Measurement, information
processing, data analysis, and reporting. Journal of information systems, 28(1), pp.1-17.
Rich, C. and Waters, R.C. eds., 2014. Readings in artificial intelligence and software
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Sol, H.G., Cees, A.T. and de Vries Robbé, P.F. eds., 2013. Expert systems and artificial
intelligence in decision support systems: proceedings of the Second Mini Euroconference,
Lunteren, The Netherlands, 17–20 November 1985. Springer Science & Business Media.
Steels, L. and Brooks, R., 2018. The artificial life route to artificial intelligence: Building
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exaggerated”—Artificial intelligence research in accounting. International Journal of
Accounting Information Systems, 22, pp.60-73.
Wenger, E., 2014. Artificial intelligence and tutoring systems: computational and cognitive
approaches to the communication of knowledge. Morgan Kaufmann.
West, J. and Bhattacharya, M., 2016. Intelligent financial fraud detection: a comprehensive
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