As artificial intelligence (AI) capabilities rapidly evolve, the imperative to experiment and identify valuable ways to use it becomes increasingly crucial for finance and accounting functions seeking to create business value, as well as boost productivity and efficiency. AI has the potential to transform the work of finance, but it is also important to recognize its limitations and implement the right checks and balances to ensure its responsible use.  

Text Box

To explore the opportunities and challenges of AI utilization in finance and accounting functions, IFAC’s Professional Accountants in Business (PAIB) Advisory Group held a session on AI during its recent meeting in Cape Town. ACCA’s Head of Technology Research, Alistair Brisbourne set the context for the session, sharing insights on the evolving role of finance functions, and their increasing application of the different types of AI - machine learning, computer vision, natural language processing, and generative AI. Findings from ACCA’s Digital Horizons survey revealed that almost a fifth of those surveyed have adopted AI in some form, with generally positive attitudes towards AI and its potential benefits, including freeing up time to focus on business-critical tasks. 

Focusing on generative AI and large language models (LLMs) as the next evolution of AI, Alistair highlighted the major investments being made such as PwC’s US$1bn investment in generative AI capabilities over a three-year period, and KPMG’s collaboration with Microsoft on AI and cloud services over five years. Alistair also discussed the complexities and challenges of training and improving LLMs and the potential risks of generative AI, including that accuracy and reliability of these models cannot be assumed to be stable as they develop. Specific capabilities may even deteriorate as models continue to train due to the hundreds of billions of parameters used. Using examples, he demonstrated the fundamental and technical limitations of models and emphasized the importance of asking these tools the right questions and having mechanisms to catch mistakes when, and not if, they are made.  

The discussion also highlighted a need to focus on augmenting the role of finance, using AI to provide enhanced insights to support domain experts, rather than solely focusing on efficiency gains.  

Watch Alistair’s presentation in full: Future-ready finance: Unlocking new paths in finance and accountancy using AI, presentation by Alistair Brisbourne, Head of Technology Research, ACCA 

The PAIB Advisory Group then discussed how finance and accounting functions are currently using AI, the implications of AI on roles and skills, and the support needed from the global accountancy profession and professional accountancy organizations (PAOs). Key highlights from their discussion are summarized below. 

Areas that finance and accounting are using AI  

A group of blue objects with black text Description automatically generated

When asked what percentage of their work is currently done using AI, two thirds of the PAIB Advisory Group said this was less than 10%. To increase the use of AI, they highlighted the need for organizations to: 

  • Experiment and just get started. The advice was to start small and scale up. Identify the “quick wins” – for example, simple AI tools that can be incorporated into existing systems (tools such as Microsoft co-pilot and ChatGPT) vs the more disruptive transformations as part of a broader strategy.
  • Protect data in a closed environment. Confidential financial data cannot be fed into free, open access systems. Larger organizations in particular have the ability to invest heavily in developing enterprise specific tools and through partnering with large tech organizations active in this space.
  • Invest in training to build internal capabilities and develop the expertise required.
  • Consider ethical challenges such as security and the risk of bias within learning models.

AI use cases in finance and accounting functions

  • Automation of routine finance tasks, for example data entry, invoice processing, expense management, transaction monitoring, and reconciliations 
  • Resource allocation and budgeting
  • Data analysis and forecasting
  • Data modelling and scenario planning
  • Market trend analysis
  • Credit risk assessments
  • Tax planning through analysis of data against tax laws to identify potential savings and issues
  • Evaluation of potential mergers, acquisition and other transactions through data analytics and broader assessments of strategic fit
  • Due diligence and compliance
  • Supply chain finance, including optimizing working capital such as through payment timing

(Read more on how the digitalization of procurement and supply chain operating models are changing the role of finance functions, see pages 10 – 12 of the IFAC report: Enabling purpose driven organizations.) 

For more examples and use cases of AI, see AI & Intelligent Automation – Disrupting Business; Elevating the Work of Accounting & Finance Professionals | IFAC, which includes an example of the use of ChatGPT to analyze an annual report to highlight key risks, performance, and to identify an audit plan to address risk areas. 

Impact of AI on roles and skills 

The increased use of AI in finance and accounting functions will require a culture that embraces innovation and a continuous learning mindset, as well as AI literacy and skills such as: 

  • Curiosity and exploratory skills to experiment with AI. There is a need to rethink the way work gets done to optimize the use of AI. 

  • Contextual understanding of the organization and its environment. This helps to ensure that AI is used for appropriate areas (not everything should necessarily be automated), and that the right questions are being asked of AI tools. 

  • Critical thinking and professional judgement, particularly when interpreting and analyzing outputs from AI models. 

  • Digital savviness 

  • Emotional intelligence and social skills (which AI cannot replace) 

  • An ethical foundation. Accountants will need to keep ethical principles in mind, using relevant guidance from the IESBA Code and its principles. 

AI accountability – co-pilot not auto-pilot

A diagram of a diagram Description automatically generated

ACCA’s recent report, AI in the finance profession, highlights the key role of finance and accounting functions in ensuring effective and ethical use of AI, outlining 6 core practices in a circle of accountability.

READ MORE: Quick guide to AI | ACCA Global 

The role of the accountancy profession and PAOs 

For companies to look to the accountancy profession to help address AI talent and skills gaps, and for the profession itself to attract and retain members, it must be seen to have credibility in the AI space. Both IFAC as the global organization for the profession, and individual PAOs have important roles to play. 

IFAC & the global profession PAO Actions

At the global level it is important to: 

  • Demystify AI and its impact on the profession, including more optimistic messaging around the opportunities it provides to enhance (not replace) roles. 

  • Promote the importance of guardrails and ethical and responsible use of AI, highlighting how accountants, as trusted professionals bound by an ethical code, can play a pivotal role. 

  • Convene PAOs to ensure knowledge sharing on AI as it continually evolves. 

  • Provide further guidance, resources, and thought leadership to help PAOs keep up to date with AI developments..

Potential actions for PAOs include: 

  • Incorporating AI into curricula development and using AI tools as part of the student assessment process. 

  • Providing continuous professional development (CPD) and learning opportunities 

  • Showcasing operational use of AI through case studies and guidance 

  • Providing membership services around AI, for example to support small and medium sized entities who may not have sufficient resource in-house. 

  • Considering sector specific guidance on the effective use of AI, for example the public sector. 

Further reading 

Laura Leka

Principal, IFAC

Laura Leka is a Principal in IFAC's thought leadership team, focusing on initiatives in support of finance and accounting professionals working in business and the public sector. She was previously an Audit Manager at Grant Thornton, specializing in public sector audit in the UK, and prior to that worked for the Audit Commission. She also spent a year on secondment to the International Integrated Reporting Council (IIRC), where she was responsible for managing their public sector and business network programs. Laura is a member of the Chartered Institute of Public Finance and Accountancy (CIPFA), and holds a Bachelor of Science (Hons) degree in Mathematical Physics from the University of Nottingham (UK).