The technological advances that have been made in the past two decades have disrupted the many businesses and industries are run. The world seems to have moved from an era where everything was dependent on human input to a situation where machines, applications, and other software is doing a job just as good as what the human input was, and in many cases, even better. Here is a breakdown of how the changes in technology are affecting the accounting sector, and how you can adjust your sails so that you can cope with the changing times.
AI is making an accountant’s work easier
Artificial Intelligence and Machine Learning are the hottest topics in technology right now. The technology, which started with machines being able to follow a set of pre-programmed instructions to bring about a particular outcome, has evolved to a level where the machines can now use the same pre-programmed information to make decisions about certain situations. Fintech companies are employing these advances in ML and AI technology to improve their software. It is now possible to predict financial patterns based on past behavior. Machine learning will become a very useful tool in providing augmented analyses to the auditors. There are many benefits of using machine learning as an auditor.
Instead of using a sample of data to make an analysis that you can handle, you can push the entire ledger into the system and get a comprehensive analysis. With time, it may be possible to program AI systems such that they get an understanding of the patterns which indicate a normal transaction. This way, if something happens out of the said order, the system will be able to flag it down and prevent fraud. In addition, for management accountants, machine learning could be very instrumental in financial planning and analysis where data will be analyzed to define and refine data models that are used in the forecasting process.
These are just a few of the applications that ML and AI will have on accounting and auditing. Note that these systems are not yet advanced enough to replace the auditor, that will take a long time if it happens. The role of the auditor will, however, evolve to become one of overseeing the accuracy of the operations.
Blockchain technology and accounting
One of the most popular aspects of blockchain technology right now is cryptocurrencies. The currencies have been around for close to a decade now, with the oldest being Bitcoin. They have managed to create quite a disruption in the traditional banking model. It is predicted that if the technology is allowed to take course, it will end banks as we know them.
Blockchain technology is all about decentralization, which means that banking will still exist, but banks will not be the same. What this means for auditors and accountants is that it will take over some tasks such as record keeping and allow accountants to concentrate more on planning and valuation.
Another aspect of blockchain technology is the single immutable and serialized source of truth. This is a system that reconciles data about individuals and transactions and traces it all back to a source of truth. If this technology is applied to finance and accounting, fraud may become a thing of the past.
The immutable and serialized source of truth has the potential to even store sensitive data such as information contained in IRS tax forms. It could be used by accountants to verify this information and link it to the owners and other connected transactions.
The possibilities which are presented by technology in the world of accounting are limitless. As an accountant, you need to start thinking of what these changes will mean for you and start learning so that you can adapt to the times. It would be unfortunate to fail to catch up with the changes and end up falling behind the advances and their benefits.