Digital Financial Reporting

Artificial Intelligence has made its way to the front page of the Journal of Accounting, the trade magazine of Certified Public Accountants which is published by the American Institute of Certified Public Accountants, in the article What’s ‘critical’ for CPAs to learn in an AI-powered world:

In the article, a panel of experts which includes David Cieslak (RKL eSolutions), Liz Mason (High Rock Accounting), and Amy Vetter (B3 Method Institute); make the following important points:

"Some young firms are pushing the industry forward, or I should say pulling it if you're looking at a tech adoption curve, but I believe the majority of firms are behind."

 

"... corporate accounting departments are probably the furthest behind. Companies are not making accounting a priority because it's 'overhead'."

 

"... every partner, every director, every manager, every senior, every staff - needs to be thinking about what technology could do to help them. We need to train people to have critical-thinking skills instead of 'we want you to be a robot and produce the same results as the prior year.' "

 

"It can seem overwhelming and daunting, but it's a mindset on the part of the individual."

 

"I think the problem is that there can seem like this huge hurdle we have to get over - new skills we have to learn, new technology we have to learn, new services we need to offer - and then all of that seems overwhelming."

 

"All of those small incremental changes add up over time, and that's what a great change management plan does."

I agree that a mindset change is in order. A paradigm shift is occurring, a transformation.  Gartner defines transformational as something that "enables new ways of doing business across industries that will result in major shifts in industry dynamics."  Major shifts means lots of change and some winners and some losers. Don't be road kill.  The territory of accounting, reporting, auditing, and analysis are changing.  Old maps will not work to understand this change.  You need a new map.

The entire article is work reading.  I would encourage you to take the time. There are additional articles related to using AI in an audit and how a not-for-profit made use of AI.

Want to get started on your personal journey into what I am referring to as accounting, reporting, auditing, and analysis in a digital environment?  Here are three easy incremental steps to take:

1. Watch the 5 minute video, How XBRL Works.
2. Scan or read the document Computer Empathy.  (Currently the document is 76 pages and you don't need to understand everything in the document.  I am trying to condense this document to make it more helpful to the average certified public accountant.)
3. Read the blog post, Everything you Need to Know to have an Intelligent Conversation about Digital Financial Reporting. This includes information about artificial intelligence, digital distributed ledgers, and XBRL-based structured financial reports.

If you want to continue your journey and know more, consider driling down on the links of the document in #2 or the blog post in #3 above.  Or, if you are really motivated and curious, here is a synthesis of my lab notes that I have been keeping for the past 10 years. Whether you want to use good old fashioned AI or add machine learning; that will provide you with the know how to get going down the right track.