How Accounting Firm Owners Are Thinking About AI's Potential for Auditors
How Accounting Firm Owners Are Thinking About AI's Potential for Auditors
AI's impact on the workplace and society quickly became one of 2023's hottest topics and one ripe for speculation. Into the new year, while the advancements of AI's capabilities in certain fields are already being felt, the story of how this new technology will impact the working lives of auditors and accountants is still largely yet to be written.
As firms position themselves as experts in the field, ready to sell lucrative advisory services to clients, everyday auditors wonder what the future of their profession holds in a landscape of generative AI.
Industry Leadership Perspectives
AccountingToday asked firm leaders what they anticipated will transpire in 2024 with regard to AI for the industry. Not surprisingly, many responses included mentions of AI's ability to take on menial tasks and free accountants to be more productive in other areas or perhaps even achieve greater work-life balance.
But how ready are both large and small firms to deliver on the vision of AI they're predicting?
The Vision: Enhanced Productivity and Advisory Services
Industry leaders, including several from the Big Four, told AccountingToday that AI transformations will allow auditors to:
- Focus on the most valuable components of their jobs
- Free up capacity to deliver better client experiences
- Shift some compliance responsibilities to AI, allowing more advisory work
- Improve margins in core assurance practices
This potential for AI to enable firms to focus on higher-margin projects would be particularly impactful for firms struggling to maintain margins in traditional assurance practices.
External AI Services: The Client-Facing Opportunity
Coinciding with these internal efficiencies is the component of AI capabilities that firms look to sell externally. Often by partnering with large LLM developers, several firms have launched initiatives to sell solutions to clients seeking help with complex accounting topics using LLMs specially trained on financial reporting standards.
Example: Marcum is launching their service first with Marcum employees, integrated into Microsoft Teams.
Client Adoption Challenges
While this service may prove beneficial in scaling financial accounting advisory projects, it's difficult to gauge how receptive clients are to taking recommendations from generative AI for their financial statements. The discomfort with real or perceived lack of human oversight ranked highly in CFOs' reservations about using AI.
The Implementation Gap
Despite being a major focus of industry leadership's predictions, there has been less public roll-out of AI capabilities for automating repetitive tasks. Perhaps an LLM that has mastered US GAAP disclosures is more impressive than one that can trace or vouch client data, but there appears to be a disconnect between what firms are predicting and what is being brought to market.
Current AI Investment Focus
Internal Operations vs. External Services
Firms are investing in both directions:
- Internal efficiency: Automation of menial tasks to unleash productivity (and potentially reduce headcount)
- External services: AI analysts that can spot trends and make recommendations
Microsoft has launched a finance-specific instance of its Copilot product, trialed by their own finance team. Interestingly, the functionality focuses on those in industry, particularly internal reconciliation and other month-end related tasks.
The Integration Challenge
Within assurance, the question remains: How exactly will auditors automate menial tasks when most are currently using in-house or third-party large language models?
A chatbot is useful for drafting certain wording, but absent the ability to integrate seamlessly with audit data, it will be difficult to automate even basic audit procedures. For assurance practices to realize the full potential of generative AI and deliver on the speculation of automating repetitive tasks, they'll need to move beyond simple input/output chatbots and integrate AI automations into existing audit procedures.
The Partnership Solution
AccountingToday outlined how firms, particularly smaller firms, may be able to implement AI functionality without developing it themselves from scratch. They mentioned the advantages of partnering with developers to develop prompting that can further refine models to perform specific tasks.
Tellen's Approach
At Tellen, we believe that by working with our partners, we can develop refined prompt engineering within our applications to unlock the potential that so many in the audit industry are anticipating.
We're developing tools to integrate our automations into every phase of the audit lifecycle and have already partnered with several firms who will help us develop and customize these applications to suit their needs.
The future of AI in auditing isn't just about having smart tools—it's about seamlessly integrating those tools into the workflows that auditors use every day.
Ready to explore how AI can transform your audit practice? Contact our Head of Growth, Jason Jones at jason@tellen.ai to learn more about our process and see if Tellen could be a good partner for your firm.