Artificial Intelligence is perfect for a range of Finance tasks. Billing, analysis, data processing — in many cases, the mundane but critical duties that require staffers’ time.
One major exception? Accounting. The “Big Four” accounting firms (Deloitte, Ernst Young, PricewaterhouseCoopers and KPMG) all agree that AI and machine learning will certainly augment accountant and audit work, but can’t replace human beings. No wonder: Accounting is always changing based on the data coming in, while AI is best at sorting, and to a lesser degree analyzing, established data.
The stats on the ground back up the Big Four’s view: 73% of accounting firm leaders say they’re not using AI at all, according to a new whitepaper by Rightworks. The decision makers at the accounting, tax preparation and bookkeeping firms who were polled by Rightworks are certainly bullish on technology — 88% say that tech is positively impacting workplace efficiency and client services. Even so, just 35% plan to implement AI in the near future.
The Big Four clearly wants the next generation of accountants to think for themselves and not rely on AI to do it for them. Case in point: All four accounting firms are banning college graduates from using AI to write their job applications.
Accountant Talent is in High Demand
The number of business students choosing to sit for the certified public accountant (CPA) exam is cratering. Students cite the 150-hour requirement and relatively low pay compared to higher-paying finance jobs as roadblocks. Some states, such as Minnesota and New Jersey, are lobbying lawmakers to cut the 150 hours down to 120 to attract more college students.
Bottom line: For the time being, companies are desperate to find the next wave of talent, especially as baby boomers and generation Xers retire. “Strategies for beating the accountant shortage,” a white paper from Multiplier, estimates 340,000 new accountants are needed here.
Companies and employees are feeling the pinch: “It’s not just that experienced accountants are rapidly leaving the workforce. Fewer new recruits are entering [the accounting field] in part because of extensive education and work experience demands and in part due to an image problem. The shortage of accounting skills is placing pressure on existing staff and leading to high levels of burnout.”
Multiplier outlines steps companies will be taking to address the accountant shortage. Here are the three strategies:
- Outsourcing work to foreign contractors. Outsourcing usually saves money, and ensures critical accounting and auditing work gets done. The Phillippines and India are top targets for accountants. Keep in mind that outsourcing doesn’t come without risks: Consider the CFOs of ADM, Bluebird and Synchronoss who were all fired in 2024 due to costly accounting errors. The optimal place for accountants to work is on site or nearby so they can better learn from company leaders and embrace company culture.
- Hiring younger workers. Multiplier reports a big jump in its client companies taking a chance on younger folks. Prior to 2023 just 4% of firms hired workers under 30 to be accountants. Since 2023 that percentage jumped to 24%. Surveys show younger job applicants value on-the-job learning, good benefits and signing bonuses to help pay off debt.
- Eschewing contractors for full-timers. Multiplier’s data shows more firms “are hiring permanent accountants than independent contractors … this makes sense when considering that … a freelance accountant’s rates are often higher than the equivalent full-time employee.”
AI Worries Many Accounting Leaders
The majority of execs, including CFOs, admit they don’t know enough about AI and want to learn. The recent Rightworks survey is no exception — just 4% of respondents think they’re “very” knowledgeable about AI. The majority (49%) of surveyed accounting pros say they’re only “slightly” knowledgeable.
Their top two concerns regarding the burgeoning technology are inaccuracy (cited by 59%) and data privacy (56%). Accuracy is a hot topic for numbers-crunchers these days. For example, the Public Company Accounting Oversight Board (PCAOB) is warning accounting firms about high error rates and is putting pressure on the sector to improve.
Accountants told PCAOB they’re wary of using AI tools like ChatGPT for audits and financial reporting. The board advised that tech-assisted analysis is fine but that firms are ultimately responsible for the results. Accountants must use technology responsibly and appropriately, and verify that analyses are correct.
