Literature Review: Application of ML in Accounting Practices

This report provides a comprehensive literature review on the application of Machine Learning (ML) in accounting. It examines various aspects, including the impact of ML on auditing processes, such as automating tasks and improving accuracy, and its role in detecting tax evasion through co-evolutionary approaches. The review also explores ML's application in invoice payment systems, sales management, and cognitive network management within the accounting field. Several articles discuss how ML is disrupting the accounting industry, leading to automation and improved decision-making. The report also highlights the ethical implications and potential challenges associated with ML adoption, offering insights into the future of accounting practices and the skills required for professionals in this evolving landscape. The review encompasses various perspectives, including those of academics and industry experts, providing a well-rounded overview of ML's transformative influence on accounting.

Running head: APPLICATION OF ML IN ACCOUNTING
Application of ML in accounting
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1APPLICATION OF ML IN ACCOUNTING
1. Jordan, M. I., & Mitchell, T. M. (2015). ML: Trends, perspectives, and
prospects. Science, 349(6245), 255-260.
In this article, Jordan & Mitchell, (2015), discusses the way by which the modern-day
computers can develop themselves so as to improve themselves to learn through experiences.
Learning through experiences is what ML concerns to and is one of the major technical field
with respect to the technology related to AI and data science. This particular article aims at
discussing the major methods by which the ML algorithms can be adopted where machines will
get trained based on the data obtained via online or through various technologies or science
while helping in to make evidence based decision making process that can be used in various
sectors such as healthcare, marketing, education and most importantly in the accounting field.
The article here reflects the core methods and progresses that are related to ML while sufficiently
discusses about the emerging trends in the field of ML while discussing how the technology can
be used to calculate the maximum balances around asset of accounts.
2. Raphael, J. (2017). Rethinking the Audit: Innovation Is Transforming How Audits Are
Conducted-and Even What It Means to Be an Auditor. Journal of Accountancy, 223(4), 28.
In this article by Raphael, (2017), the author tries to represent the idea about how
innovation is gradually changing the way by which auditing is done in the accounting field. The
article describes some of the breakthrough ideas such as the application of ML, AI , data
analytics and many more so as to make the auditing process more interesting for future auditors.
The application of ML in the auditing field helps in eliminating the intensive manual process that
are invested upon auditing process while delivering powerful insights by incorporating the ML
algorithms in enhancing the quality of the audits. This helps in delivering higher value to the
future stake holders while influencing them to invest more capitals in the markets. The article

2APPLICATION OF ML IN ACCOUNTING
successfully reflects the way by which the ML technology can be applied in the accounting field
while helping to analyze the data obtained from different samples into small meta data. Applying
ML in the accounting process thus can reduce several auditing risks and can help users from
unusual transaction issues.
3. Jaslove, C. (2017). The rise of AI : An analysis on the future of accountancy.
In this article the author Jaslove, (2017), successfully presented the idea about how the
ML technology can be used within the accounting field. The article reflects the present issues
that are present with respect to the accountancy field. As new professionals are entering into the
field of accounting there is a growing need to adapt to new trend and technology and this where
the importance of ML lies within the field. The article analyses the potential impacts that are
created by the use of AI and ML in the accounting industry. The article also describes the way
by the ML technology adds value to the accounting industry causing the shift of attention from
monotonous task to a more analytical way of driving data within the decision-making process of
the accounting field. The author of this article also describes the risks that are related to the use
of the ML technology with respect to business ethics or human interaction. The author also
depicts the potential threats that might affect the future accountants and the application of the
ML technology can help in mitigating the accounting process risks.
4. Hu, P. (2015). Predicting and improving invoice-to-cash collection through ML (Doctoral
dissertation, Massachusetts Institute of Technology).
The author Hu, (2015) in his article reflects the importance of using the ML within the
invoice payments which is one of the essential parts of accounting system. The article points out
the issues that can be faced if the invoice payments turns out to be inefficient at times. The

3APPLICATION OF ML IN ACCOUNTING
delinquent way of invoice payment is one of the sources that leads to financial instability if not
managed efficiently. It is seen in various researches that effective invoice collection can lead to
positive impact on the overall financial performance of a company and hence needs to managed
effectively. Here in comes the use of ML. The overall paper demonstrates the way by which the
supervised method of ML model can be applied within the invoice payment systems while
helping to customize the actions collectively from the firm. The author through his research tried
to apply the ML algorithm so as to get high accuracy with respect to build and train the invoice
payment system to produce real world invoice data while gathering information from a set of 500
Fortune companies.
5. Weber, F., & Schütte, R. (2019). A domain-oriented analysis of the impact of ML—the
case of retailing. Big Data and Cognitive Computing, 3(1), 11.
The article written by Weber & Schütte, (2019), mainly concerns about the impact that
ML created over the accounting industry mainly in case of retailing. Retailing or wholesaling are
two different aspects in case of accounting industry which are regarded as a natural fit for the
application of ML or AI technology. The paper examines the way by which the ML technology
can be applied within the field while evaluating the main problem that are often faced within this
field. The author of this article thus conducted an empirical analysis so as to determine the
numerous possible areas where the retailing industry can be improved with the help of ML. The
author of the article pointed out the areas where the retail trade is actually very low and
considered the application of ML at those core points. The application of ML within the retailing
field thus can solve a series of retail-based problems such as classification, optimization,
clustering, anomaly detection and many more which are well defined within this article.

4APPLICATION OF ML IN ACCOUNTING
6. Syam, N., & Sharma, A. (2018). Waiting for a sales renaissance in the fourth industrial
revolution: ML and AI in sales research and practice. Industrial Marketing
Management, 69, 135-146.
In this part of the article, the author Syam & Sharma, (2018), focuses on the methods by
which the ML technology along with AI can impact the overall sales management process.
Within the industry of accountancy, managing the sales within the industry is an important part
and needs to be maintained efficiently. The article examines the seven steps that comprises of the
selling process and points out how these processes can be improved by the application of the ML
so as to shift the overall decision-making process from human centered to machine oriented. The
article also pointed out the possible impacts that would be created both on the selling as well as
on the management of sales while bringing in ML within the practices of Industrial market
managing resulting in the renaissance of sales in the era of fourth industrial revolution.
7. Bräuning, M., Hüllermeier, E., Keller, T., & Glaum, M. (2017). Lexicographic
preferences for predictive modeling of human decision making: A new ML method with an
application in accounting. European Journal of Operational Research, 258(1), 295-306.
The author Bräuning et al., (2017) in his article, represents the idea based on which the
ML method can be applied within the accounting field leading to the evaluation of lexicographic
preference fir generating a predictive modelling towards human decision making. The author in
his article, establishes a novel learning algorithm that helps in inducing the generalized model
based on lexicographic preference. With the evaluation of this model, the author hence tries to
point out the problem that are often observed within the decision-making process I the
accounting field from the perspective of ML. The model is introduced within the entire article
giving rise to a set of training data sets. The article also represents a case study based on the

5APPLICATION OF ML IN ACCOUNTING
accounting field that helped readers to understand the effectiveness of lexicographic preference
while making any decision within the accounting field.
8. Ayoubi, S., Limam, N., Salahuddin, M. A., Shahriar, N., Boutaba, R., Estrada-Solano, F.,
& Caicedo, O. M. (2018). ML for cognitive network management. IEEE Communications
Magazine, 56(1), 158-165.
In this article, the author Ayoubi et al., (2018), represents the way by which ML can be
used for Cognitive network management. Within the field of accountancy, cognitive network
management is an important aspect. Within the article, the author includes a detailed description
on how the ML technology can be applied within the systems of managing network so as to
minimize the human role in controlling a loop in order to reduce the cause of network outages
during accountancy related works such as financial transactions. The article mainly contributes
to expose how the ML algorithm can be used in realizing the autonomic of the performances in
accounting field while maintaining the security within the management areas. Accounting is one
of the most important area in business that leverages several other models including decision
making, delivery, service planning and many more and hence the author of this article tends to
reflect the use of ML for managing the integrity between thee models while maintain the
network of the accounting management.
9. Hemberg, E., Rosen, J., Warner, G., Wijesinghe, S., & O’Reilly, U. M. (2016). Detecting
tax evasion: a co-evolutionary approach. AI and Law, 24(2), 149-182.
In this article, the author Hemberg et al., (2016), tries to present an algorithm related to
the use of ML in one of the important fields of accounting that includes tax evasion. The article
reflects how the presence of non-compliance malicious tax evasions can account for several

6APPLICATION OF ML IN ACCOUNTING
billion loss of revenues and hence in order to solve this threat the ML technique is introduced
here so as to present a co-evolutionary approach towards eliminating the fraudulent attacks that
can eventually take place within the accounting field. The article also explores the different
forms of tax schemes that are related to accounting and tried to explore areas in ML that could
help in developing an early warning system so as to focus on the enforcement force.
10. Accaglobal.com. (2019). [online] Available at:
https://www.accaglobal.com/content/dam/ACCA_Global/professional-insights/machine-
learning/pi-machine-learning-2pp.pdf [Accessed 29 Sep. 2019].
The main theme of this article is to provide a brief introduction to the concept of ML
while emphasizing on the accountancy field. Here the article mainly focuses on the different
perspectives of the accounting field while considering it several applications that can be applied
in considering it several ethical implications for future skills. The report provides a brief
description of the trends of the accounting field starting from the late 1500s till the 1900s that are
linked to double approaches allowing professionals in the accounting field to converse in a
meaningful way. The report thus aims at introducing a new era of accountancy where ML can
create the next big transformation while being capable of doing several amazing things offering
assistance to the working professionals in the accounting field to stand out in various ways
within the proliferation of their data.
11. Medium. (2019). ML Is Disrupting the Accounting Industry. [online] Available at:
https://towardsdatascience.com/machine-learning-is-disrupting-the-accounting-industry-
dadca0daed5f [Accessed 29 Sep. 2019].

7APPLICATION OF ML IN ACCOUNTING
The term ML has become a trendy term in the last few years where companies are
investing a lost f money towards implementing machine earning in their fields. Financial services
are another important field that falls under the accounting platform that represents a collaborative
platform for both high technology and telecom sector. The article describes the prediction of Mc
Kinsky within these industries that will lead to the adoption of ML in the accountancy field
within the coming years. The article also describes the ways by which the ML is affecting te
finance field while eliminating the repetitive manual tasks with a more advanced technology that
enables auto allocation of the right accounts. The application of ML has also lead to the
automated system of bank reconciliations that helps in new bank transactions. Chatbots like Xero
ae the commonly known application of AI and ML in the accounting field that helps in resolving
queries of customers related to accounting programs.
12. Techadv.com. (2019). Why ML will Change Accounting Software in 2018 | Technology
Advisors, Inc.. [online] Available at: https://www.techadv.com/blog/why-machine-learning-
will-change-accounting-software-2018 [Accessed 29 Sep. 2019].
In this article, the main theme reflects on the reason for which ML will gain so much
importance in the accounting field. It is estimated that companies like Netflix, Spotify are
already making use of ML technology so as to track their user history while enabling suggestion
for them. ML has gained a lot of application advantages and hence it is seen to improve the
efficiency while automating the daily functions. The article reflects that with the sue of ML in
the field of accounting will help in making decisions more accurate and easier for accountant to
analyses them further reducing the overall manual effort to some extent thus increasing the
efficiency of work.

8APPLICATION OF ML IN ACCOUNTING
13. Ifac.org. (2019). Why Accountants Must Embrace ML | IFAC. [online] Available at:
https://www.ifac.org/global-knowledge-gateway/technology/discussion/why-accountants-
must-embrace-machine-learning [Accessed 29 Sep. 2019].
This particular article, talks about the reasons for which the accountants bust embrace on
the use of ML within their accounting field. The realistic application of ML and AI are very
much useful for the future accountants while helping them to meet the expectations that
organizations are expecting them to serve. With the help of ML the accountants will be able to
realize the patterns while being enable them to rethink about the implications of the particular set
of data within the accounting field. It would also help them to improve the interpretation and
analysis capability of data while making use of different ML techniques. The article successfully
points out the areas where the biasing of data has impacted the way of induced reasoning. ML
has a huge role for auditors in case of augmented analysis that the paper describes in an
exceptional way.
14. Forbes.com. (2019). The Digital Transformation Of Accounting And Finance - AI ,
Robots And Chatbots. [online] Available at:
https://www.forbes.com/sites/bernardmarr/2018/06/01/the-digital-transformation-of-
accounting-and-finance-artificial-intelligence-robots-and-chatbots/ [Accessed 29 Sep. 2019].
This article is mainly focused on the digital transformation technology that are affecting
the accounting and finance industry with the help of the application of ML. With the combined
maturation of different technological capabilities, digital transformation is gradually taking up
the accountancy platform. Various aspects of machine earning applications are gradually getting
introduced hat are taking over the jobs of many of the accountants causing to disruption in the
field. However there remains some of the benefits that are reflected in the article with the use of

9APPLICATION OF ML IN ACCOUNTING
ML within this field which includes improvement within the accounting operations and reducing
in the overall costs that will cause value in the future of any business process towards
transformation. The use of ML in accounting field also helps in improving the digital process of
auditing making audits 100 percent relevant for financial transactions. Expense management is
another are of accounting that the article focuses upon while using the ML approach so as to read
the receipts and audit the expenses.
15. Algorithmia Blog. (2019). Five ML Applications for the Back Office | Algorithmia Blog.
[online] Available at: https://blog.algorithmia.com/five-machine-learning-applications-for-
the-back-office [Accessed 29 Sep. 2019].
Besides financial activities the field of accounting also comprises of several back-office
jobs which can also be transformed with the application of ML that is the main theme that the
article is mainly focusing on. ML combined with several other software specific solution has the
capability to bring in huge improvement in the back-office jobs while helping originations to
continue with their account related jobs. With this respect, the article describes the use of
Robotic Process Automation that mainly helps in the back-office jobs while minimizing the
manual tasks and helping in to achieve greater efficiencies within the work field. The article also
reflects the area of account reconciliation which is one of the critical aspects of every business so
it needs to ensure with proper controls which can be achieved using the ML concept while
helping in matching the reconciliation based on truth data.

10APPLICATION OF ML IN ACCOUNTING
16. Twitter.com. (2019). DLabs (@DLabsPL) on Twitter. [online] Available at:
https://twitter.com/DLabsPL [Accessed 29 Sep. 2019].
This part of the article reflects three different ML solutions in terms of AI that will help
in keeping the tax and accounting field in business alive. Accounting and tax issues maintained
and this particular article reflects the ways by which these two areas can be made efficient with
the use of older technologies like ML or AI. Application of these technologies not only helps
business to reduce their costs and time but also helps in improving the overall business ROI
while increasing the productivity of the business. In order to achieve this suitable ML approaches
needs to be adopted that helps in gaining the suitable ROI for the business thus helping in to
determine the earliest stages of the businesses. The article reflects the ost common types of
projects that involves classification of texts using emotion, and behavioral analysis which can be
achieved with the help of ML approaches.
17. Accounts Payable AI: The New Competitive Advantage - iPayables. (2019). Retrieved
29 September 2019, from https://www.ipayables.com/ai-increases-efficiency-in-accounts-
payable/
Accounts Payable AI is the new technological trend towards the accounting world. This
technology is the combined effect of both ML and AI technology that helps in sorting out the
data through the database systems faster and produces a more sophisticated reporting structure
reding the human error in the accounting field. The article thus communicates the way by which
the Accounts Payable technology can be used within the accounting field why helping
organizations to adopt more efficient way of accounting activities. Besides reflecting its
importance, the article also describes the different types of myths and truths that are related to
the use of Accounts payable technology in the accounting field providing beneficial

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implementation of the automated payments of the accounting systems. The overall accounts
payable automated system is designed in such a way that it helps in stimulating the human
intelligence with that of the business intelligences.
18. Ink.library.smu.edu.sg. (2019). [online] Available at:
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=2753&context=soa_research
[Accessed 29 Sep. 2019].
This part of the article reflects the reasons why business should embrace on the use of
ML in the accounting field. AI and ML are known to be one of the tedious tools that helps n
granting the complicated works in the field of accounting helping professionals to provide
valuable insights to the business. The article reflects the major practices in the field of
accounting that are making use of ML to streamline their daily accounting operations with the
aim to achieve a more improved accuracy in the analytic works. The recent trends within the
accounting field with the use of AI and ML has gradually increased the overall productivity of
organizations and this has led to the main reason for which the future professional s should lean
forward towards the use of ML within the field of accounting so as to ease their operational
process in the accounting field.
19. Parish, E. J., & Duraisamy, K. (2016). A paradigm for data-driven predictive modeling
using field inversion and ML. Journal of Computational Physics, 305, 758-774.
In this particular article the author Parish & Duraisamy, (2016), proposed a new method
of using ML in the field of inversion technique so as to predict the data driven during accounts
related work. The article describes the ways by which the ML techniques can be applied so as to
form a closure model towards predictive computational settings in the accounting background