Accountants are not threatened by ChatGPT, at least for now.

Editor's note: The subsequent content is a contribution by Jack Castonguay, PhD, CPA, whose replacement by ChatGPT is yet unknown. Is he still in his position, or not?

Did ChatGPT come to our time to solve the pipeline crisis in the accounting industry by employing robots and intelligent machines? I don't think so, but that doesn't mean it won't revolutionize our industry.

The field of accounting relies heavily on strict rules and formulas, such as balancing assets with liabilities and equities, making sure debits match credits, and keeping track of cash flow. This straightforward approach is appealing to many students, but it's also an area of work that is likely to be overtaken by advancements in artificial intelligence. In fact, some basic AI features are already being used in popular products like TurboTax and QuickBooks, effectively reducing the need for some roles like bookkeepers and tax preparers. While these features can sort accounts, make predictions, and populate tax forms with impressive accuracy, they still fall short compared to ChatGPT - an advanced AI model that could be likened to Usain Bolt in the world of accounting.

If you ever felt like your job could be done by a monkey while auditing or filing taxes, you were pretty close. Although monkeys may not be able to do it, AI tools like ChatGPT can do it easily. For example, Surgent's algorithms can predict exam scores with over 90% accuracy, which even monkeys couldn't do better than 40%. If ChatGPT had unlimited data inputs, it could perform the same task even better. ChatGPT can generate numerous protein sequences or map cancer progression, so understanding an FASB standard, assessing a going concern risks, matching documents, or determining tax consequences for a partnership split would be much easier. The Big 4 firms have always hoped for such a tool, so they were not concerned about declining accounting school admissions until it was a reality.

We should consider our Terminator moment in two ways: its current implications and its potential future impact. Although there are tools available to automate much of our work, we don't necessarily need to abandon our current professions and seek education in data analysis, engineering, or law. However, we do need to learn how to incorporate these tools into our work. ChatGPT, despite the release of GPT-4, is still in its learning stage and may not provide accurate or complete information. It can also get confused with technical accounting terms and other similar words.

Since ChatGPT isn't perfect, having knowledge and expertise is even more important. Although ChatGPT can produce multiple memos in seconds that would've taken multiple staff accountants hours of work, we still require an accountant to verify its accuracy. Additionally, we need an accountant to ask the right questions. The quality of the output depends on the quality of the input. Therefore, having existing knowledge is crucial to knowing what inputs will achieve the best results. Knowledge will remain a significant asset. Accountants who can successfully collaborate with ChatGPT will prosper, while those who cannot will likely become unemployed.

The coming times are distinct. It's not a repetition of prior events, but rather a new ball game altogether. The forthcoming edition of AI, which relies on language, will surpass our current expectations. Its power, precision and accuracy will improve at an incredible pace, in a matter of weeks or months, not years or decades. Several reputed technological firms worldwide are engrossed in creating their own AI learning gadgets. With heightened competition, revolutionary ideas will emerge leading to capabilities that are unthinkable today. ChatGPT's future might not match the Terminator's appearance, but it will in all likelihood be way more advanced.

Major accounting companies will begin educating their employees on these tools, boosting their knowledge and potentially reducing the need to hire more staff in the future. These tools also open up the opportunity to work with smaller clients and those with uncomplicated business structures who are currently being assisted by medium to small-sized companies. This could result in a decrease in entry-level and senior positions. It may not be unreasonable to speculate that in the future, wealthy clients will be the only ones receiving personal assistance with their tax returns and company audits can be conducted by small teams sitting around a coffee table rather than a conference table.

The current pipeline issue can potentially be addressed by ChatGPT, although it may only serve as a temporary solution. ChatGPT is currently capable of performing tasks that are usually handled by those at the lower level. However, in the long run, ChatGPT will likely increase the demand for technical skills and the ability to combine a wide range of topics among the lower-level employees. Although it will undoubtedly change the nature of work done, accountants will still have work in the future.

Perhaps the AI technology came from the future, not to take over the role of accountants, but to enhance our capabilities.

Back in 2013, researchers from Oxford made a bold prediction: computers were likely to replace 94% of jobs in accounting and auditing. Their report, which can be read here https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf, made waves in the industry when it was discovered by accounting professionals a few years later.

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