THE ROLE OF ARTIFICIAL ACCOUNTING FIRMS INTELLIGENCE (AI) AND CHATBOTS IN

By Neil Fauerbach, MBA

ccounting firms have been using AIpowered applications for several years, assisting in data entry, fraud detection, financial forecasting, audit support and content management. These tools help firms save time, reduce errors and provide better service. Wisconsin firms have been utilizing these tools for a while and are testing new tools as they are introduced.

“People are interacting with AI, and they don’t quite realize it because it’s infused in the applications they are

Ausing, including Microsoft products like Oracle and Salesforce. These are the tools many practitioners and professionals are using, and they may not recognize them as AI,” stated Allen Smith, Baker Tilly’s chief information officer.

Firms are using AI in automated data entry. It can extract data from invoices, receipts and financial documents and automatically categorize them, reducing the need for manual data entry. This AI tool shrinks the amount of time to prepare data for analysis. It can also provide highly useful management information.

“There are prediction models that help determine when a client will pay your invoice late, based on historic data points in the client’s data,” pointed out Kirstie Tiernan, CFE, OCA, principal in BDO Digital and co-leader of BDO’s data analytics & robotic process automation teams.

Public understanding of AI in the U.S. is relatively low. A study published by scientific publisher Springer found that many Americans have a patchy knowledge of what AI is and what it can do. They tend to get their information about AI from entertainment media, such as movies and TV shows. But movies like Blade Runner and Her, which feature AI-powered characters, don’t reflect reality and shouldn’t guide our thinking about AI.

That gap in understanding is changing with the rapid introduction of chatbots.

What are chatbots?

A chatbot is a computer program that uses natural language processing to understand and respond to a question or request. ChatGPT — which you may have heard a lot about — is becoming mainstream, giving the average person a look at what AI can accomplish.

“There are a lot of people who, with the introduction of ChatGPT, are finally seeing how applicable AI is to our everyday lives and that it is absolutely here to stay,” said Tiernan.

The explosion in the use of AI-powered chatbots around the world has drawn the attention of the accounting industry, as bots have been used for writing marketing content, client proposals, advertising copy and financial reports. ChatGPT is a powerful tool. Firms are working to understand how to best use the tool and how to control it.

The Jan. 27 issue of Accounting Today magazine ran an article titled “I am not a threat to accountants, says ChatGPT.” The article, written by ChatGPT, states, “While AI can process vast amounts of data, it is not capable of critical thinking and decision-making that human accountants are trained to do.” The article itself is an example of AI applied to researching and communicating ideas. It also alleviates fears that AI will replace accountants. The “humanness” of accountants will aways be needed.

How do chatbots work?

These AI chatbots use the same sources of information that Google uses: web pages, Google Maps, news, YouTube, Wikipedia, scholarly literature and social media. The difference is in the output. Where Google shows you web locations of relevant information, ChatGPT serves up natural language output, analyzing and explaining its findings in natural language. Microsoft’s BING application does both.

“These AI models take certain elements of the data set and sprinkle in how much of it should be applied based on the design of the AI model,” stated Jacob Rohrer, a senior consultant on Wipfli’s organizational performance team. “For example, 50% may be from scholarly articles, 20% Wikipedia, 20% web pages and 10% social media, according to my research.”

Rohrer recently co-presented a webinar for Wipfli staff on the topic of ChatGPT. “Interest was high in the new technology. We had over 800 attendees,” he said, and 6.5% of attendees were very familiar with apps like ChatGPT, while 33% were somewhat familiar — but 100% had an interest in learning more.”

People are experimenting to determine how AI can help in their work. Chatbots can generate blog post copy, write a proposal for accounting services, generate letters, and analyze and write financial reports. But is it safe and reliable? How do you manage and control it until it is better understood?

Firms that have started using chatbots use them as a starting point to generate ideas. Eric Trost, CPA, MST, a principal at SVA Certified Public Accountants, stated, “In the Tax Department, we have used ChatGPT to draft an outline for a technical tax PowerPoint presentation. While it is understood that any technical information provided by an AI tool must be verified, it is important to learn how to use these tools as they are developed and refined.”

Baker Tilly’s Smith stated, “It’s important to remember that AI is not thinking. It is looking at a string of characters and predicting what would come next.” So, those who use it are going to have to proof, edit and fact-check.

Tim Seidel, CPA, a partner at Wegner CPAs, said he uses ChatGPT to quickly generate ideas for marketing content. “It is saving me a lot of time in the process. Before, I would spend time brainstorming and writing from scratch. Now, I can have a starting point in seconds and spend my time editing and rewriting the content for originality, accuracy, tone, voice, etc.”

Not everyone is on board yet. Ben Hauser, CPA, managing partner at Northland CPAs in Rhinelander, said his firm doesn’t currently use any of the AI chatbot technology. “Our culture and mission is personal-service driven. I don’t see this type of technology hitting us soon. However, in this day and age, one never knows!”

Policies on the use of these new technologies vary with firm size and resources. BDO has limited internal access to the platforms until it is better understood, and policies will be developed around their use. Policies are currently being developed at SVA, Wegner and Wipfli.

Professor Collins advises firm management to consider these tools if they think it will help them do their work better. “You can get caught up in the technology, but effective companies are technology plus good people,” he said. “Ask yourself, ‘Is this what’s best for the organization?’”

All firms interviewed for this article stated that their No. 1 priority is protection of client data. Policies and firewalls need to be in place to eliminate risk to the firm, the clients and the industry.

Perhaps the best advice on the use of chatbots comes from a chatbot. When asked the question, “How do we know that ChatGPT answers are accurate and reliable?” the bot answered, “To ensure the accuracy and reliability of ChatGPT’s answers, it’s always a good idea to doublecheck the information provided and do further research if necessary. If you’re unsure about the accuracy of a particular answer, it’s always a good idea to seek the opinion of a human expert in the relevant field.”

One big drawback of chatbots is that they can be biased. Not all information on the internet is accurate and objective, and that’s where chatbots learn. “The data that chatbots are trained on have implicit biases, based on the sources that were used,” stated Seth Collins, professor of ethics at Edgewood College in Madison. Collins pointed out the importance of being aware that those biases will show up in the output. Users should proof carefully, check their facts and edit accordingly.

Neil Fauerbach, MBA, has 37 years’ experience in CPA firm marketing and business development, including a longtime post with Smith & Gesteland/BDO. He has been honored with CPA Marketing Report’s Accounting Marketer of the Year Award, inducted into the Association of Accounting Marketing (AAM) Hall of Fame and included in Accounting Today’s 100 Most Influential People in Accounting.

Full disclosure: For this article, the author used ChatGPT; Google Search; Microsoft’s BING, Dictate, Spellcheck, Grammar Check and Teams; and ZOOM.

Using Chatbots

1. Policies on chatbot use could list approved uses (such as scheduling appointments) and should point out tasks better handled by an accountant.

2. Security of clients' information is critical. Chatbots should be programmed to follow strict security protocols and only access the necessary information required to provide the requested services.

3. Clients should be made aware when they are communicating with a chatbot and should have the option to speak with a human representative if needed.

4. The chatbot system should be regularly monitored and evaluated to ensure that it is functioning as intended and providing accurate information.