Artificial intelligence to be 'the norm' in law firms in 2020, is the title of an article claiming that all law firms will need to leverage artificial intelligence in the future as a standard technology investment.
So, my first question is this: how will artificial intelligence impact professional accounting firms? My second question is: what exactly do they mean by 'artificial intelligence'?
Merriam-Webster provides this definition of artificial intelligence:
: an area of computer science that deals with giving machines the ability to seem like they have human intelligence
: the power of a machine to copy intelligent human behavior
Basically, artificial intelligence is about making a machines mimic or simulate human intelligence. There is no magic involved. Machines, long before computers, have simulated human behavior. Take the Babbage difference engine. That was basically a mechanical calculator. All hardware. Computers are machines. But what makes a computer unique is that while you do have some hardware, you also have software which makes changing what the machine does significantly easier. That allows for the machine to change what it does because you can easily change the instructions.
Undoubtedly computers will have an impact on the work practices of accountants. While I personally don't like the term artificial intelligence because the term is somewhat overloaded and it means different things to different people; I do believe computers will have a significant impact on financial reporting and the financial report. I prefer to describe how this will happen as the creation of expert systems which leverage the structured nature of information which will enable new ways to create and work with financial reports.
The article goes on to give these steps to deploying the technology:
"Number one, you've got to get that artificial intelligence is going to fundamentally change the market. Number two, you've got to be able to deploy the technology - and that means you understand what's the right technology, what's available and how to use it. Number three, you've got to use it."
I completely agree that step 1 is "getting" that a fundamental change is about to take place. And I agree that step 2 is "understanding" so that you will not be fooled by those trying to sell you a bill of goods. And I agree with step 3 that "use it" is the best way to learn it and understand what the technology will and will not be capable of doing.
US public companies are getting the opportunity to have a look at the future of financial reporting. In fact, they are blazing the trail. Most don't even understand that that is what they are doing. They see the SEC mandate to report using XBRL as more of an expensive and useless nuisance than experimentation with a cutting-edge technology. But that will change; in fact, it is changing already although slowly.
If you want to better understand how law firms, professional accounting firms, and financial reporting will likely change; the document Knowlege Engineering Basics for Accounting Professionals is helpful.
The American Institute of Certified Public Accountants (AICPA) took bold leap back in 1998 when it started its journey toward digital financial reporting. Perhaps lawyers and other professionals can learn from what accountants have been able to put together with the help of some information technology professionals. While digital financial reporting still has some rough edges, a lot has been learned.
Digital financial reporting is not only inevitable, it is imminent. Could it be the norm by 2020?