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A blog by Leon Oudejans

Accounting, Auditing & AI robotics

29 September 2016

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The impact of Artificial Intelligent (AI) robots on society and also on human jobs has been the focus of several of my blogs (eg, 17 Feb 2016). Today I’m zooming in on Accounting and Auditing as I am reading opinions that are far too gloomy. The graphic below outlines my scope.

Based on my graphic above, it’s unlikely that Accounting and/or Auditing can be taken over by AI robots. The workload will however shift in nature, scope and volume.

The main area for AI robots is the Electronic Data Interchange (EDI) with suppliers and customers. EDI reconciliation – or the use of blockchain technology – between companies would indeed minimise a human workload regarding tangible and bilateral transactions involving goods and money.

Accounting also involves non tangible and unilateral entries that relate to information and time (eg, accruals, adjustments, depreciation, provisions, reclassifications). I do not expect AI robots to assume such entries in the foreseeable future. A 2013 Oxford University study states: “the decline of employment [is] in routine intensive
occupations – i.e. occupations mainly consisting of tasks following well-defined
procedures
that can easily be performed by sophisticated algorithms.”

Another approach comes to a similar conclusion. The Financial Statement (FS) assertions (see midst of graphic above) ultimately require humanmanual involvement, both in Accounting and Auditing. I doubt that AI robots can ever be made responsible for certain FS assertions and for human processing leaks like fraud, theft and waste.

The audit opinion on a company’s FS makes clear that management is responsible for the FS. There is however a distinction between accountability and responsibility. An auditor cannot claim being an expert in auditing and similarly deny being accountable for FS errors.

The real threat to the audit profession doesn’t come from AI robots but from within. The fear for making professional errors (ie, accountability) is preventing auditors from delivering added value to their clients. It’s a mistake to believe that the audit opinion is creating enough added value to clients. It’s mostly a legal must-have and a requirement in credit facility agreements by banks.

The current “risk-free” attitude by auditors is a dead-end street and potentially undermining the entire audit profession. Auditing is not in the same field as science and technology which would indeed enable a hand-over to AI robots. Auditing is a human skill – and to some extent even an art – based on known-knowns (facts), unknown-knowns (intuition), known-unknowns (beliefs), and unknown-unknowns (imagination). Also see my 3 April 2016 blog.

Visage – Fade to Grey (1980) – artists, lyrics, video, Wiki-1, Wiki-2

Aaah, we fade to grey (fade to grey)

Devenir en gris

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