Digital Financial Reporting

In his article, The 5 Jobs Robots Will Take First, Shelly Palmer lists the top 5 jobs that will be replaced by robots or computer algorithms.  Here is his list:

1. Middle management
2. Commodity salespeople
3. Report writers, journalists, authors, and announcers
4. Accountants and bookkeepers
5. Doctors

What does this mean for you?  It is worth watching this video interview to get important details.  An Oxford University study concludes that 47% of jobs in the United States are at risk of being automated using computers over the next 20 years.

Palmer says, "If your job is taking a number from one box in Excel and put it in another box in Excel and writing a narrative about how it got there, thinking that report is a big deal; machines are coming for you and coming fast."

Here is what Palmer says about accountants and bookkeepers:

4 – Accountants & Bookkeepers

Data processing probably created more jobs than it eliminated, but machine learning–based accountants and bookkeepers will be so much better than their human counterparts, you’re going to want to use the machines. Robo-accounting is in its infancy, but it’s awesome at dealing with accounts payable and receivable, inventory control, auditing and several other accounting functions that humans used to be needed to do. Big Four auditing is in for a big shake-up, very soon.

Technology is neither good or bad, it is simply a fact of life.  Just like machines replaced manual labor during the first industrial revolution, software will replace manual and cognitive work in the fourth industrial revolution.  You need not worry, you need to adapt.  

How do you adapt?  The best way to adapt is to forge man-machine partnerships; learn how to leverage machines.  Learn how machines work.  You need to wrap your head around "digital".  The first step in adapting is understanding the process that is about to occur.  In another article, The 5 Jobs Robots Will Take Last, Palmer points out that almost every human job requires us to perform some combination of the following four basic types of tasks:

• Manual repetitive (predictable)
• Manual nonrepetitive (not predictable)
• Cognitive repetitive (predictable)
• Cognitive nonrepetitive (not predictable)

Manual is using one's hands or physical action to perform work. Cognitive is using one's brain or mental action or a mental process of acquiring knowledge/understanding through thought, experience, use of the senses, or intuition to perform work. 

Predictable manual or cognitive tasks can be automated.  Unpredictable manual or cognitive tasks cannot be automated.  He gives the example of an assembly line worker that performs mostly manual repetitive tasks which, depending on complexity and a cost/benefit analysis, can be automated. On the other hand, a CEO of a major multinational conglomerate performs mostly cognitive nonrepetitive tasks which are much harder to automate.

If your skills include only the ability to perform manual or cognitive repetitive tasks, you need to get new skills.  Those most at risk are college students.  College students are paying very high prices for education in accounting that, if students are not careful, could be obsolete very soon.  Don't make that mistake.

I wrote a paper, Introduction to Knowledge Engineering for Professional Accountants, which goes into more detail.  In fact, it would be helpful for most accountants to read all of Part 1 of Intelligent XBRL-based Digital Financial Reporting. This will help you understand how to identify what may or may not be automated.

Information barbarians will not fare well in the information age. Adapt.  Further, accounting education needs to change.