ChatGPT and the Accounting Profession: A transformation in the early stages

By Christina M. Olear, CPA, and John Peatross, CPA

While often considered a traditional profession, accounting has always evolved and embraced innovative technologies to remain competitive and enhance efficiency.

One such advancement that has garnered significant attention in the past year is the emergence of generative artificial intelligence (AI), with ChatGPT leading the way. The technology has the potential to transform many industries, including accounting.

ChatGPT vs. Generative AI: Is there a difference?

AI tools have been around for decades, so why has there been a lot of hype around ChatGPT (a form of AI) this year? We will first review AI and consider specific AI examples before we dive into ChatGPT.

As described on Investopedia.com, artificial intelligence refers to machines that are programmed to simulate human intelligence and actions. Often, the term is applied to machines that exhibit learning and problem-solving traits.1 AI examples include the virtual assistants Alexa and Siri, chatbots and self-driving cars.

Essentially, AI uses logic and algorithms to identify patterns and efficiently solve problems. Its integration into mainstream consumer products and services (Alexa, Siri), along with advances in machine learning and algorithms, have led to explosive growth in this technology.

Generative AI is a subset of AI that focuses on generating content based on patterns it picks up from existing data. It involves large datasets and training a model through the process of machine learning to generate content that is both contextually relevant and coherent.

ChatGPT is one of many generative AI tools. What makes it different is its ability to generate human-like text responses in a conversational manner. While many other AI applications have the ability to process text inputs, ChatGPT’s design allows it to do so in a way that is accessible to a wider population while maintaining its efficacy. Currently, there are two versions of ChatGPT available: ChatGPT-3.5 and ChatGPT Plus. Access to ChatGPT-3.5 is free when creating an account with OpenAI, the developer of ChatGPT. You will need to pay a monthly subscription for ChatGPT Plus, which includes ChatGPT-4.

The latter version opens the door to many more uses and produces better results.

These tools facilitate efficiency and automation, and the possible uses are endless. Some general examples include the following:

• ChatGPT can generate letters and emails with only a sentence or two of input.

• ChatGPT can summarize a 20-page report into one page of main points in seconds.

• ChatGPT can dramatically reduce the time needed to produce Power Point slides. The human-like, textbased platform mentioned above offers users an interaction that feels as if you are communicating with another person. When we ask ChatGPT to perform a task, this is known as “prompting.” As society gets better at asking questions (prompt engineering), the technology will produce better results.

There are numerous generative AI tools available to explore. Google’s Bard and Microsoft’s Bing function similarly to ChatGPT, and there are various other generative AIs that focus on image and audio generation, among other specializations.2

Why is everyone talking about ChatGPT?

ChatGPT sure seems to have everyone excited (in both positive and negative ways). This is because of the huge value proposition ChatGPT has going for itself. The program in its latest version significantly increased its accuracy, performance and capabilities while still maintaining accessibility. The table highlights five ChatGPT features and compares the performance of GPT-3.5 versus GPT-4.

Identifying risks

The potential benefits that ChatGPT can bring to the accounting profession boggle the mind, so it is critical to understand the relevant risks of this controversial technology. Here are some of the more current and pragmatic risks accountants will encounter with the current iterations of ChatGPT and similar programs.

Misinformation/Inaccuracy/Quality Control – ChatGPT can create fabulously flawed content because it has a remarkable ability to produce information that is incorrect but sounds accurate. The content product is based on the data it was trained on; and, as a machine, it lacks true understanding and context. It’s also not uncommon for the software to misunderstand prompts created by its users.

Because most users opt for the free version of the software, some of these drawbacks should be expected. However, a lack of quality control around content inaccuracies has gotten many users into trouble.

Bias and Inappropriate Content – ChatGPT is trained on enormous sets of data so that it can perform its conversational functions, but there are limitations to this method. For one, the data used for training only goes through September 2021. In addition to the historical time limitation, data has been pulled from a wide range of internet sources, which could lead to unintended biases in the software’s responses to prompts. If a user asks ChatGPT for information that is based on biased training data, they could end up with a biased, harmful, or inappropriate response.

Privacy – To further develop the software, ChatGPT collects data about the prompts and conversations that users have within the software. As is the case for every social media platform, it is important to consider the content we want to disclose. Since working with ChatGPT feels like you are texting a friend, you could easily be lulled into a false sense of security or safety. Inadvertent inclusion of private or sensitive information about yourself, others or employers is a real risk as prompts are created and your focus is on the tasks ChatGPT is being used to complete.

Some organizations have been communicating to their employees to not put sensitive or proprietary information into ChatGPT out of fear that they will inadvertently leak information. Many others have remained silent on the issue. Ideally, more organizations would come out with guidelines for their employees on how to use the software in a professional environment to enlist the efficiencies of the tool without adding unnecessary levels of exposure.

Plagiarism – If writing reports that you purport to be your own work product, there is a chance that plagiarism or copyright issues could rear their ugly heads. Because generative AI is trained on massive amounts of accumulated data, there is a chance that the resulting text could be generated exactly the same as the input or too closely paraphrased that a notation would be required. To use another’s thoughts, observations or conclusions without proper acknowledgment is plagiarism. In addition, data used to build the generative AI often comes from sources that are copyrighted and used without permission. If this material surfaces in a recognizable form it could be a potential copyright violation.3

Common use cases for accountants

Accountants are finding numerous practical and innovative use cases for integrating ChatGPT into their daily workflows. AI-driven conversational tools are becoming valuable at streamlining processes, enhancing efficiency, and delivering more comprehensive service packages. For all accountants, ChatGPT can be a useful tool for creating content such as articles, reports, emails, and internal process documents.

Impact on accounting professionals

Much like Excel has been, ChatGPT will be a tool professionals use as they perform their work, but it has the power to revolutionize the way accountants perform certain tasks. Historically, new tools allow skilled accountants to spend less time on simple, yet time-consuming, tasks and more time on higher-level work. Is the current version of ChatGPT going to be as revolutionary for accountants as Excel? That is to be determined. We can certainly say, however, the technology is going to be transformative and has the potential to support accountants in areas where Excel cannot. Below are some of the high-level impacts that we believe ChatGPT will have on accounting professionals.

Skill Sets Will Adapt to the New Technology – A tool is only as good as the person using it. With the massive potential that ChatGPT brings to the table, CPAs need to update their skills to leverage the technology. In fact, a few surveys indicate a majority of business leaders are looking to hire candidates with some ChatGPT skills.4 One such skill is prompt engineering, which is the practice of carefully designing prompts to guide AI models. Better prompts equate to better results. Skilled users can create prompts that provide better content in less time. One day, entry-level employees may regard prompt-engineering to be just as essential as proficiency in Microsoft Excel. On top of the specific skills to use the software, continuous tech learning will be essential. Additionally, improvement in our emotional intelligence skills will be necessary as we become more involved in cross-department collaboration since we will have more higherlevel responsibilities and AI takes on more of the task work. An increase in technology skills, along with growth in emotional intelligence, will enable effective collaboration with departments such as IT, operations, risk management, legal, etc.

The tools will evolve with AI – One remarkable thing about ChatGPT is its adaptability to new information and situations. In recent years, accountants have been using a variety of tools to help read documents and process information to make their lives easier. ChatGPT can identify key information and summarize documents in a matter of minutes. In addition to improving on existing tools, ChatGPT can act as a virtual collaborator, offering real-time assistance and guidance. Accountants will rely on AI systems to automate repetitive tasks, flag potential errors and provide instant access to relevant information.

Job responsibilities will change – With the increased capabilities of AI-powered tools and the efficiency they bring, the role of accounting professionals will change. Time that was previously spent crunching numbers or reading through extensive contracts will be used to perform higher-level tasks, such as strategic planning and company innovation. This shift in responsibility could have a cascading effect on all levels of accounting, where even entry-level personnel may find themselves doing today’s manager-level tasks. While there may be some roles where AI tools act as more of a replacement, most accountants will adopt ChatGPT as a supplement to their current role and see their day-to-day responsibilities change as a result.

a supplement to their current role and see their day-to-day responsibilities change as a result.

In closing, this rapidly changing technology has the potential to be transformative for businesses. While some embrace it with excitement, others fear it will have a negative impact on the future of our society. One thing is for sure, we will continue to hear about this technology whether we like it or not.

1 Jake Frankenfield, “Artificial Intelligence: What It Is and How It Is Used,” Investo- pedia.com (April 24, 2023 update).

2 www.cpa.com/Gen-AI

3 Wes Cowley, “Why I Dont Use LLMs in My Work,” Words by Wes (May 5, 2023).

4 Aaron Mok,“ChatGPT Experience May Be Able to Get You That Job - More than 90% of Potential Employers Are Looking for Workers Who Use the Chatbot,” Insider (April 27, 2023).

Christina M. Olear, CPA, is an accounting professor with Pennsylania State University Brandywine in Media and is a member of the Pennsylvania CPA Journal Editorial Board. She can be reached at cmo16@psu.edu

John Peatross, CPA, is a financial advisory services manager at Siegfried Advisory and an adjunct instructor in the department of economics at the University of Maryland. He can be reached at jpeatross@siegfriedgroup.com

Reprinted with permission from the Pennsylvania CPA Journal, a publication of the Pennsylvania Institute of Certified Public Accountants