As a student currently participating in the MIS BBA/MAcc Double Dawgs Program, the intersection point between accounting and technology is something that I have found very interesting. Since we are discussing Artificial Intelligence this week in class, I specifically wanted to research how AI is affecting accounting. Over the next decade, the value of Artificial Intelligence will be captured in all industries, including accounting. Broadly, the accounting industry is hopeful that AI can allow CPAs to find more career opportunities and allow them to work smarter, not harder. From the client’s perspective, AI will provide them with more value through deeper insights.
According to an article from Emporia State University, there are four ways that AI is currently affecting the future of accounting. First, there is the ability to automate accounting and bookkeeper activities. AI is expected to replace 40% of work in auditing, payroll, uploading files, accounts payable and receivable, inventory control, and other accounting functions. There is also a new evolution of “invisible accounting”. This idea is referring to the fact that AI can do compliance work while humans can be used in more valuable ways. AI is also helping accountants by delivering actionable insights. With internal and external data, AI can help executives make smarter decisions. Lastly, AI will be used in accounting as Robotic Process Automation gains popularity. RPA will decrease the need for human labor in the manual accounting process, allowing humans to spend their time on more meaningful work.
A fairly recent innovation in the accounting world is Pegg. Pegg is a smart assistant chatbot for accounting. Pegg can “help businesses manage everything from money to people by texting…through a familiar style messaging platform on their phone, tablet or laptop”. In 2018, Pegg was created by Sage, a cloud-based accounting software company. According to another article, “three-quarters of small businesses use excel or even paper to manage their accounts.” Now, they can use Pegg. By using Pegg, businesses decrease the burden of administrative work which allows their time and resources to be better used solving problems and providing value to their customers. Pegg’s target audience is small businesses because it provides them with a simpler and more convenient way to manage their administrative tasks.
For example, Pegg can be used to ensure expenses are recorded or to find the status of an invoice. A company can use Pegg within existing software like Facebook Messenger and ask questions as one would to Alexa. You could ask “who owes me money” and Pegg would respond. All companies need to track expenses and do tax returns, but very few people enjoy those things. Pegg gives these people a way to manage those things, so they have more time to do the things they love. Pegg has won awards like Best AI-Based Solution for Financial Services and Software Excellence Innovation Award. Pegg isn’t meant to replace the need for humans, but, rather, to expand the possibilities created for businesses when humans and machines can collaborate. At the end of the year, taxes would be much easier to file with Pegg because companies’ or individuals’ financial records would be better recorded throughout the year. Pegg is just one example of how AI is revolutionizing business and accounting. The biggest concern I have regarding Pegg is that it was created nearly five year ago yet most of the articles about it were from 2018-2020. I am curious to know the current progress of the chatbot because I think it has great potential.
Kriti Sharma is the Vice President of Artificial Intelligence and Ethics at Sage. She recognized the issue of AI reinforcing human stereotypes; therefore, when creating Pegg, she made the chatbot gender-neutral. An example of AI’s gender stereotype issue was shown through a study at Boston University. In this research study, an AI program was trained with text from Google News. “When the AI was asked, ‘Man is to computer programmer as woman is to X,’ the program’s response was “homemaker”. She blames some of the stereotype issues of AI on a lack of diversity on technology teams. Sharma said in an interview “a child growing up in an AI-powered world today could be learning to bark orders at a female voice assistant — I think we all would agree this is dangerous.” Due to Sharma’s efforts, Sage published an ethical code for developing AI. This article urges companies to build AI services to tackle social issues ethically. Because of these efforts and her work to create Pegg, she was named in the Forbes 30 under 30 list in Europe. Sharma should be recognized as a pioneer in making Artificial Intelligence ethical.
In addition to the ethical concerns of AI, there are more concerns with digitizing the accounting profession. Mostly, people are afraid of data privacy and confidentiality. The only way to gain value from AI is to have access to large amounts of data. Therefore, this need for data also creates privacy concerns. Furthermore, since AI’s algorithms are so complex, there is a lack of transparency with AI’s proposed solutions. It is often hard to understand how an AI program gets to a certain solution, which would make it hard to know if the AI is biased or bad. Although all of these concerns do need to be addressed, the opportunities AI will bring to the accounting world need to be pursued.
Additionally, in a world where technology is constantly evolving, the next generation of accountants need to be prepared to use Artificial Intelligence to help automate minute tasks and drive deeper insights.
Sources:
https://online.emporia.edu/articles/business/ai-and-future-of-accounting.aspx
https://tipalti.com/robotic-accounting/
https://theworld.org/stories/2018-03-28/meet-pegg-gender-neutral-robot-assistant https://www.linkedin.com/pulse/story-behind-pegg-building-worlds-first-smart-alex-fawcett
Hi Mary! I recently read an article that explained the AI revolution and ways we can prepare for it. The same author also wrote an article about how AI is going to change accounting. It seems like it’s going to make the job a lot easier. Accountants no longer have to worry about endless hours of entering data and it is supposed to help detect fraud. I don’t see AI replacing peoples jobs, but rather making it a lot easier. This AI revolution is going to be an interesting one for sure, especially for people in the business industry. That’s why it’s important that a lot of us try and develop technical skills now so we can keep pace with the change.
Hey Mary, when reading about AI, I think everyone thinks about how it has the opportunity to replace jobs and keep people out of work. However, I believe that AI can’t take the place of an actual human in a lot of industries. Like you said earlier, it will be able to do the job of gathering data, similar to what accountants have been doing for years. When AI becomes a normal thing, I believe its potential could actually make one of the biggest differences we’ve seen from technology in a while.
Hey Mary, I think Pegg is awesome and revolutionary! The idea of AI was always intended for making our lives easier. The simple book keeping working of logging new data entries and minute tasks should have always been something that a working class person shouldn’t have to worry about. I also don’t think this will truly take anyone’s job and if it does, the job wasn’t something of crazy high value and was something that could be easily automated, then why keep it?
Hi Mary! Your blog post was very interesting to read, especially since I am also an Accounting major. I have seen through internships and other part-time accounting jobs I have worked, how technical the accounting world has become. The first time I ever used Sage was in 2019, when I spent the summer working for a small accounting firm in Atlanta- I had no idea that they released Pegg. Pegg seems very helpful for smaller businesses, and I am also curious as to how many small businesses use it today. I wonder how accounting will change by the time we’re ready to retire.
Hey Mary, I love how you brought light to how AI can affect any and every profession. If accounting is affected by artificial intelligence then I can imagine how other industries will soon be affected. Although, there are downsides from this innovation and you highlighted the one that everyone one is worried about, breach of privacy. Technology isn’t perfect, meaning that mistakes with confidential pieces of data aren’t impossible. How will the accounting profession combat this and move forward?
Hi Mary! Great post. On top of the breach of privacy, I’m curious if programmable “cooking of the books” will occur. If a company can automate the accounting process, it can maneuver funds in a seemingly vanilla way. I remember two Clemson grads scammed the U.S. government by funneling money into a sneaky account writing it off as I believe Accum. Dep. A machine could definitely top that.
At what point does the necessity for human data cross the line? Data protection and privacy is a hot topic, so how will AI respond to backlash against knowing too much about human behavior. The whole concept is that they know more about us than we do, and that itself is an invasion of privacy…
On another note, AI use in the audit field and it seems to have a great upside. In terms of tax, its application seems to be rather limited as as a lot of it is very subjective. When taking an aggressive tax position you have to prove that there is “substantial authority” to the position which is largely a subjective process based on similar cases and the client.
Great post! I’m interested in seeing where you investigate the role of AI in the accounting field this semester, and I suspect that pursuing this angle could have a pretty significant impact on your future career if you can become an expert in this area. You might even consider doing additional research (as an independent study) in this area, as I suspect it will be one with a huge impact in the coming years! Great start!
This is some great information. I had no idea AI was involved in the world of accounting. Personally, the biggest takeaway is that the information comes from 3 to 5 years ago. Could they have lost funding, or even just interest, in further development? Is there no progress to report due to the pandemic? What does this mean for the future of Pegg and AI in accounting? I believe Pegg is a phenomenal piece and would be really beneficial for smaller firms who may not have as many employees to bigger firms. Curious on the current progress of the chat bot as well!
This is amazing! I had no idea this was a thing. Pegg seems like such a cool and advanced concept and will definitely take a lot of burdens off the shoulders of small businesses who can’t afford top organizational accounting softwares and personal accountants. I also find it so interesting how Krita Sharma was able to take a lot into consideration when creating this bot, including gender-neutrality and removing the stereotypes creators sometimes embed within their AI creations. I agree that privacy concerns may be the main issue with an app like Pegg, I am curious to see about where this goes later on.
Hi Mary! This is a great blog post! What caught my eye the most was how taxes would be much easier to file with Pegg because companies’ or individuals’ financial records would be better recorded throughout the year. This is amazing because I know how gruelling and exhausting filing taxes can be for individuals, much more for larger companies. My main concern is how privacy comes into play, just due to everything going online and being automated. The cyber security team at Pegg must work hard to maintain privacy for their users.
Hey Mary! This was a very interesting article to read because this something that could really improve the everyday lives of an accountant. It will take a lot of the busy work out of the job and allow more accountants time to focus on the important tasks, which in turn would lead to higher quality and higher efficiency of work. One question that I do have is will the adaptation and implementation of this software decrease the need for more accountants?