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Why You Can’t Trust AI With Your Accounting

Ignoring technology is not an option in the fast-paced business world of today, and the accounting industry is no different. The level of application, however, should be limited. 

Artificial Intelligence (AI) is revolutionizing the accounting industry by helping firms increase efficiency, boost accuracy, and provide greater value to their clients. That said, businesses are still hesitant to integrate GenAI technology into their workflows. According to the Thompson Reuters Institute’s 2024 Generative AI in Professional Services Report (AI Report), 49% of tax and accounting firms currently have no plans to use GenAI tools, while 30% of them are still debating whether or not to do so. 

Their caution is warranted. You cannot trust AI with your accounting. 

CPA and owner of Go Figure Accounting Rachel Siegel says, “AI is proving to be a great tool and I’ve been having fun with it in my personal life. But professionally? Not yet. While AI can automate many routine tasks and enhance efficiency, it lacks the nuanced understanding of complex financial regulations and the critical thinking required for accurate accounting. Plus, AI can’t replace the judgment and ethical considerations that a real human brings to the table.”

Here are five reasons why you can’t trust AI with your accounting:

Data Security Concerns. Relying on AI for accounting involves sharing sensitive financial information with technology platforms, which can pose security risks. Human accountants are bound by confidentiality and professional standards to protect their clients’ data.

Lack of Nuanced Understanding. AI lacks the deep understanding of complex financial regulations and tax laws. Human accountants are trained to interpret and apply these rules correctly, while AI can only follow predefined algorithms.

Inability to Exercise Judgment. Accounting often requires professional judgment and ethical considerations, which AI cannot replicate. Human accountants can assess context, recognize subtleties, and make informed decisions that go beyond mere number crunching.

Risk of Errors and Oversights. While AI can handle repetitive tasks efficiently, it can also propagate errors if the initial data or programming is flawed. Human oversight is crucial to catch and correct these mistakes before they become significant issues.

Lack of Personalized Advice. AI cannot provide personalized financial advice tailored to an individual or business’s unique circumstances. Accountants offer customized strategies and insights based on their clients’ specific goals and needs.

According to Accounting Today, vice president of Intuit QuickBooks’s partners segment Jeremy Sulzmann pointed out that computers cannot take the place of the close relationship and comprehension that dependable professionals have with their clients. Accounting is still a relationship-based industry, and human oversight is still essential. 

Rachel agrees. “While technology and AI can assist with data processing and routine tasks, the true value of accounting lies in the personal insights, advice, and support that skilled accountants provide to their clients. It’s about understanding the unique needs of each business and individual, and tailoring solutions that technology alone simply can’t offer.”

This article is intended to provide basic information for starting a discussion with a financial professional about your specific financial situation. Please consult with a financial professional regarding your specific financial situation before making any financial decisions.

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