Leon Grassi happened to be drafting the in-house rulebook for how Sax LLP accountants might use artificial intelligence platforms minutes before speaking to ROI-NJ on the exact same topic.
It’s less coincidence than predictable that he was occupied by the thing a lot of accounting firms are right now.
“To be honest, an AI acceptable use policy for staff is not something we ever thought we’d be creating at an accounting firm,” he said. “But we’re by no means the progenitor of this. It’s spreading around like wildfire now.”
Grassi, chief marketing officer and head of business development at Parsippany-based Sax LLP, said that, with the emergence of AI-driven language processing tools such as ChatGPT, accounting firms aren’t just thinking about how their staff might interact with these tools far down the line. … It’s already happening.
In other words, as Grassi said, the cat’s out of the bag. The technologies are readily accessible to anyone. And accounting firm leaders don’t see themselves as in a position to tell their staff that they shouldn’t be used for research, emails, articles or other tasks.
They wouldn’t want to risk being the last ones in line to embrace it, anyway.
“AI might be a buzzword, but it’s by no means just a buzzword,” Grassi said. “It’s a world-changing technology. And, as a professional services industry, we’re trying to stay ahead of it. That process has been very enlightening, if not somewhat terrifying.”
The accounting industry has historically relied heavily on human labor to accomplish tasks for clients. The profession as a whole was already moving toward implementing tech shortcuts and automation of some of those manual tasks, in line with the industry’s larger shift to more advisory and consulting services. Popularization of platforms such as ChatGPT might be speeding that transition along.
Instead of pretending it doesn’t exist or panicking about its implications, Grassi said the approach should be to think about how these tools are going to make accountants more effective on behalf of clients.
Edward O’Connell, the newly minted president of the board of trustees for the New Jersey Society of Certified Public Accountants and an audit partner in the Technology and Life Sciences practice at Withum, believes it will be used as a resource for years to come.
Although it’s still early in its adoption, he suspected that there are a lot of firms looking into the use of these tools internally. Right now, the most popular use of ChatGPT prompts in accounting is written forms of communications. It significantly speeds up first drafts of emails, O’Connell said.
Alan Sobel, managing principal in the New Jersey offices of CliftonLarsonAllen LLP, said he has — like he believes most accountants have — experimented with it. His test was how it might be used to write a memo to clients.
“And it gave me a first draft within nanoseconds,” he said. “It wasn’t perfect, and, hopefully, it’ll improve as time goes on. But, already, if you could get a first draft out of these platforms in 15 seconds versus a couple of hours, that’s a game-changer for this profession.”
Most accounting firm leaders see the output of these platforms as first-pass solutions that need expert review to ensure accuracy. There are rumors of these chatbots being infected with biases while still in their development infancy, Grassi said. Knowing precisely where those exist and how they could slip into an accountant’s communications could prove troubling.
There are also more serious potential downsides to be mindful of that internal AI policies are trying to account for.
“What we want to be cautious of is, without question, we want to make sure no client-related data is being shared on these platforms,” Grassi said. “Our primary concern is, and has always been, the confidentiality of our clients’ data. You can use these tools to improve or better your knowledge on specific areas of the business, as long as client information stays out of the picture.”
Here’s the plan: Explore it, use it, leverage it. But don’t blindly trust it.
“We all know the digital space can be messy, where there’s a lot of different, sometimes conflicting, information,” Grassi said. “This technology is still in its infancy. So, while it’s effective and does a great job of getting very close to where you need to be from a data standpoint, there’s still a lot of questions I’d be asking.”
On the consumer side, there are no doubt going to be more individuals and businesses using these platforms over time to solve tax riddles. The platforms can already give detailed descriptions of specific tax scenarios, Grassi said, even if there are variables that might not be considered or presented upfront.
For now, however, ChatGPT alone can’t do your taxes.
“We might not be there yet,” Grassi said, “but we’d be foolish to think that manual process in accounting will always be in place when we have these types of technologies in the market.”
What all accounting firm leaders tend to agree on is that those in the profession should be at the very least familiarizing themselves with the latest tech advances.
“I believe those who embrace it will be successful as a result,” Grassi said. “Those who deny it might see, very short-term, how that boat has been missed, and could see ramifications in their business.”
Audits and AI
A years-long initiative is underway that could offer each and every one of the country’s accounting firms the same foundational industry-standard artificial intelligence audit software.
The development of what’s being referred to as the Dynamic Audit Solution Project is being led by the national accounting trade group, the American Institute of Certified Public Accountants. Citrin Cooperman is one of the 36 large accounting firms pooling financial and talent resources together to help with the project, along with the AICPA’s technology arm, CPA.com, and CaseWare International.
“We’re all working together to develop this AI software into something that will be available to all firms in the industry,” said Scott Derco, a partner at Citrin Cooperman. “It’s something we’re excited about and heavily involved in.”
More than 14,000 firms with auditing practices in the U.S. could benefit from the project, which has been in the planning and development stages since its 2018 announcement. Many of the specific details of the platform have yet to be revealed.
In general, Derco said accounting firms have an interest in exploring how AI could be used to automate audits.
“No different from our clients, we lack human capital in our profession, and so we’re figuring out how to be more efficient in adopting technology to overcome that,” he said. “(Accounting firms) want to free up our professionals for other value-add services.”
