How do accounting firms use AI? Here’s what a team of Binghamton students found out

No matter where you look, artificial intelligence systems have become integral to different areas within the business world. But when it comes to the accounting field, how much of a difference could it make?

For six Binghamton University School of Management accounting students - Ernest Pang, Bonnie Huang, Carleigh Newman, Keith Pacia, Michal Seinfeld and Grace Sharon - that question helped launch a classroom project to examine the use of AI by a half-dozen accounting firms, including the Big Four. It resulted in some unique insights.

"We wanted to approach this from all angles. Some people say AI is good for accounting because it increases productivity, but others feel this will cause accountants to be replaced one day," Pang said. "One of its strengths is being able to analyze large data sets, but to mitigate the concerns surrounding AI, the policy in at least Big Four accounting firms has been to encourage accountants to utilize it in their work while still ensuring they make any important judgments themselves."

The students learned that in 2015, 10% of organizations used or planned to implement AI soon. By 2019, that number jumped to 37%. After analyzing some of the ways accounting firms have adopted AI into their business strategy, the six students presented their findings to classmates in Assistant Professor of Accounting Flora Sun's cost accounting class.

As the students uncovered in their research, each of the Big Four firms - PwC, Deloitte, EY and KMPG - have employed AI in similar fashions:

• EY, which announced a $1.4 billion investment in AI in September 2023, has been using it for market insights and social monitoring, better engaging with customers through chatbots and optimizing operations and cybersecurity. As a result, it's helped EY raise its global GDP by 1.4% and helped shape international competitiveness through a uniform, data-first approach.
• For PwC, which in April 2023 announced a $1 billion investment in AI over the next three years, uses included summarizing relevant data, performing risk analysis for tax purposes and predicting client revenue. As a result, PwC has seen at least 20% growth in IT, finance and marketing productivity, along with other benefits in areas such as customer service with reduced call waiting time.
• Deloitte launched an internal AI platform in fall 2023 and uses it to improve workplace efficiency by assisting employees with daily tasks such as writing code, creating content and researching. Along with it came internal debates on whether AI would create or erase jobs and questions about how confident employees could be with its reliability.
• KPMG uses AI on several fronts: KPMG Ignite, an AI platform for rapid problem-solving assistance, and KPMG Trusted AI, which helps with designing, building, deploying and using AI tech solutions responsibly and ethically. The company employs various other generative AI initiatives to assist with content generation and client engagement and to provide data-driven insights. In addition, KPMG formed strategic partnerships with Microsoft and IBM to support the development of custom AI solutions for various industries and enhance data analysis and compliance capabilities.

When examining midsize firms, namely Grant Thorton and RSM, the SOM students learned AI was used mainly in risk, compliance and internal audit work; it helped create a framework for addressing client issues.

Seinfeld said their research made it clear that the Big Four and mid-sized firms appeared to understand the risks of AI regarding privacy and governance issues.

"It also became clear that every company was doing its part in mitigating risks by having internal systems of checks and balances put in," she said, "and from what we could tell, that seems to be working for all the firms."

Sharon said it wasn't surprising that major accounting firms would want to be proactive with AI, which has become "a household name at this point," but it was interesting to see how the different firms emphasized using it for internal purposes.

When they began the project, the team members assumed AI was used in a more overarching way, but they found that different AI systems were employed for specific tasks within the field.

"If this were, say, five years ago, and not many had heard of AI or ChatGPT, this would really be confusing to see," Sharon said. "But it makes sense that these major companies would devise a way to put these systems to good use without taking any risks that would compromise internal data."

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