Accountants will be the profession best placed to bring the necessary rigour to the analysis and governance of critical data in the age of AI, writes Sharon Cotter

Canadian philosopher Marshall McLuhan has suggested: “We become what we behold. We shape our tools, and thereafter our tools shape us”. This is important to remember today, when the spotlight is on the potential consequences, intended and unintended, of the artificial intelligence (AI) tools being shaped by humans.

The rise of AI

AI encompasses a vast range of computer science research. Since the 1950s, scientists have pursued the goal of building machines capable of completing tasks that normally require intelligent human behaviour. 

Machine learning (ML), a subset of AI, enables machines to extract knowledge from data and to learn from it autonomously. 

In the past decade, the exponential increase in the volume of data generated, captured, stored and available for analysis, coupled with advances in computing power, have created the impetus and means to rapidly advance ML, which in turn has facilitated the development of narrow AI applications. 

In essence, narrow AI applications are computer programs, or algorithms, specifically trained, using very large datasets, to carry out one task, or a limited number of tasks.
Best suited to tasks that do not require complex thought, narrow AI algorithms can often accomplish such tasks better and more swiftly than humans. 

Most of the AI capability we use today is narrow AI – from Alexa and Siri, which carry out human voice commands, to ChatGPT and Bard, which generate output based on conversational text prompts, and Dall-E2, which generates visual images based on text prompts, to name but a few. 

In the field of accounting, we can utilise coding languages and software tools such as Python, ‘R’ and Alteryx to generate predictive forecasts and models. 

We often use these tools without realising that we are using elements of narrow AI. For example, these programming languages and software tools embed many of the statistical algorithms that allow us to easily carry out linear regression analysis, a common method of predicting future outcomes based on past data.

Adapting to broaden our role

The word ‘computer’ was first coined by the English poet Richard Brathwaite in 1613 to describe a person who carried out calculations or computations. For the next 350 years or so, most humans who needed to perform calculations used mental arithmetic, an abacus or slide rules until the widespread availability of electronic handheld calculators in the 1970s.

As accountants, we have seamlessly adapted to the tools available to us – whether these are an abacus, double-analysis paper, a totting machine, or computer software tools like Excel and Alteryx.  

The use of these tools, and the time saved by their use, have allowed us to broaden our role from recording, summarising and presenting the underlying economic transactions to providing a much wider range of useful information to decision-makers both within, and outside, organisations. 

This is reflected in commentary from the professional accountancy bodies emphasising the importance of good organisational decision-making and suggesting that the core purpose of our profession should be to facilitate better decisions and identify the business problems that better decisions will resolve.

Asking the right questions

In 1968, Pablo Picasso is reputed to have said: “Computers are useless. They can only give you answers”. While the remark may have been dismissive of the then cumbersome mainframe computer, it does encapsulate the notion that the real skill lies in figuring out the right question to ask, as this requires both judgement and creativity. 

Useful, timely and relevant information for decision-making can only be produced if the right question is asked of the right data at the right time. On the face of it, this seems simple and straightforward, but in practice it is often much more difficult to achieve. 

• Deciding what question to ask requires knowledge of the business context, and an understanding of the issue being addressed as well as an ability to clearly articulate the issue. Critical thinking is key to identifying what answers are needed to identify the range of solutions for the issue at hand.
• Deciding what data is appropriate to use in the analysis requires an understanding of what data is available, where it is stored, how it is stored, what each data element selected represents, how compatible it is with other data, and how current that data is. It also requires knowledge of the limitations posed by using particular sets of data.
• Being able to generate the answer to the right question using the right data is only relevant if it can be produced at the point at which this information is needed. Sometimes, not all the data needed to answer the question is readily available, or available in the required format. Data from several sources may need to be combined and, where data is incomplete, judgement will be needed on the assumptions necessary to generate a relevant and timely set of data.

Accountants are well-positioned

The skills, experience and mindsets we develop as part of our professional training positions accountants well to provide the best possible decision-enabling information to decision-makers. 

Scepticism is a key tenet of our profession. We look to spot anomalies in data and information, and to question the information by asking “does it make sense?”

We are trained to be methodical, thorough and to look beyond the obvious. Training and experience enable us to develop our professional judgement, which we apply when determining what is relevant, appropriate and faithfully represents the underlying economic transactions. 

We are adaptable and flexible in the tools we use, and aware of the need to stay up to date with the law and regulation applying to the storage and use of data. In short, we are valued problem-solvers and critical thinkers.

Accountants’ ‘jurisdiction’

In his book The System of Professions: An Essay on the Division of Expert Labor, Andrew Abbott uses the term ‘jurisdiction’ to represent the link between a profession and its work. 

Jurisdiction is an important concept, as the acknowledged owner of a task is likely to be able to shape the characteristics of that task.

In the context of accountants’ work, the term ‘jurisdiction’ means the extent to which organisations, and society, accept that due to their professional expertise, only specific roles and responsibilities should be carried out by accountants. 

Within organisations, accountants’ jurisdiction is not static. The roles and responsibilities that fall within their remit can, and do, change. 

The jurisdiction of accountants can be encroached upon. Others within the organisation may also have expertise allowing them to claim work once exclusively identified with accountants.

Challenges to jurisdiction

The emergence of new roles, such as data or information specialists, who collect, clean and analyse data, has meant that complex analysis of financial information can now be done by non-accountants. 

Some organisations have explored ways in which operational managers and decision-makers can be given direct access to financial systems. 

Known as ‘self-service’ menus, such direct access to information allows decision-makers to drill down into the detail of transactions – for example, to identify the underlying causes of deviations from budget, all without the need to consult with their colleagues in the finance department. 

If an organisation transfers responsibility for data analysis and decision support to data specialists and/or decision-makers, then the jurisdiction of the accountant may be narrowed or reduced.

Opportunities for role expansion

Equally, however, accountants’ roles and responsibilities can be increased, resulting in their jurisdiction being broadened or expanded. 

The expansion of an accountant’s role requirements can either result from increased job tasks and responsibilities, or from changes in the tools and technologies available to carry out these tasks and responsibilities. 

Recent research and professional body commentary has, for example, explored the extent to which management accountants have embraced changes in their role or taken on wider responsibilities, such as business partnering. 

Multiple elements such as role identity, the ability to embrace change in a positive way and developing strong communication skills, to name but a few, all contribute to the successful adoption of additional responsibility.

Futureproofing with digital fluency

The rapid and on-going development, enhancement and availability of software tools that can be used to capture, store, identify, slice and dice data, and present information in visual graphics, are forcing accounting professionals to consider the level of IT competency required to operate efficiently and effectively in today’s digital world.  

Professional accountancy bodies emphasise the importance of digital skills in futureproofing the accountant’s role while many of the larger multinational companies espouse the need for finance staff to have good digital fluency.

Challenges and opportunities

Both encroachments and expansions to the jurisdiction of accountants bring their own set of challenges and opportunities. 

Maintaining, and expanding, accountants’ jurisdiction over the integrity of data, and the provision of information for decision-making, should be a key part of the profession’s strategy in the digital age. 

I believe that the ‘governance’ of data, rather than the use of specific AI tools, should be the focus of the accountancy profession when formulating strategies for its future direction.

In addition to enhancing our digital skills, we need to consider strategies such as adapting and changing the role of the chief financial officer to include overall direct responsibility for data analytics. 

The governance, management and analysis of data should be as important as traditional responsibilities in finance. 

Governance of data requires rigour and objectivity to ensure that its integrity is preserved. We should noticeably stake our claim as the profession best placed to bring that rigour and objectivity to the governance and analysis of data used for decision-making. 

Failure to consider such strategies may mean we increase the risk that encroachments rather than expansions to our role – our jurisdiction – will become a reality.

We should strive to ensure that our future role is shaped by us rather than by these new digital tools and techniques.