The Impact of Automation on Accounting

Automation has created huge impact in all the sectors across industries and has helped to improve operational efficiency. Both positive and negative impacts of automation can be seen in different industries. Automation’s impact on the field of accounting cannot be denied; on one hand, it has helped to improve the quality of work and on the other hand has caused serious concerns on the future of accounting. During early 2000s, companies use to deploy 100s of bookkeepers to manually enter accounting information in accounting system. Manually entering the data caused lots of errors in reconciliation, during month end, quarter end and year end closing was nightmare. To win the trust, improve efficiency and provide accurate information, automation came into the picture. Technology can help in improving the quality of financial information, and thus it can lead to better decision making. Technology can help in reducing cost and can provide competitive edge in the market. Automation has reduced the burden of accountants and helped them to make better quality decision in lesser time (Wilson & Sangster, 1992, p. 66-74). With the adoption of automation, a new skill sets of jobs will emerge. With the collaboration between technology companies and auditors lots of repetitive jobs can be automated (Sutton, Arnold & Holt, 2018, p. 19). Nowadays technologies such as Robotic process automation and ERP system has helped to automate majority of data entry and reconciliation work, so that accountants can focus on value added activities and these technologies help to make better decisions. However, the profession of accounting requires judgmental decisions and detailed professional knowledge, and therefore, it is difficult to automate it with current available technology. Moreover, automation can cause high risk to the accounting jobs. Some economists believe that automation can eliminate many professional accounting jobs. Automation can cause too much of data available to the accounting professionals leading to confusion in making decisions. The use of Big data causes an increase in concern for its security, privacy and proper usage (Huerta & Jensen, 2017, p. 102-104). However, automation has benefited the accounting industries in several ways by helping in improving strategy, development, working environment leading to higher sales, better quality services, and reduced operating cost (Marshal & Lambert, 2018, p. 199). Automation will bring a positive revolution in accounting industry.

Auditing is one of the most important part of accounting profession. Auditing examines the financial statements and provides neutral opinion on their accuracy and determine if they confirm to the rules and regulations. There is huge competition in the business of audit. It’s a labor-intensive job which requires high skilled and qualified workers. Clients have options to switch from one audit firm to another for better cost-effective service. The audit firms provide several discounts to attract the clients. Automation provides cost effective audit tools and software packages to do the job of auditing in the most effective and efficient manner and helps auditors to reduce the price of their service without causing loss to the firm. Thus, automation helps the auditing firms to beat the competition in the market (Wilson & Sangster, 1992, p. 66-74). AI (Artificial Intelligence) systems will take automation to an upper level. Automation will help the auditors by performing some structured task and providing them with more free time to focus on more complex tasks and thus help in better decision making. Auditing will no more be limited to finding individual faults and mistakes but will help the accountants to find patterns recurring trends for better decision making (Huerta & Jensen, 2017, p. 103).

Moreover, technology is finding ways to help and support the accounting profession. Automation is going to benefit the sector of accounting in several ways. The profession of accounting will be benefited with the use of drones, mechanical robots, and robotic processes. The role of accountants may change to simply handling and supervising the machines. However, the robots and drones can’t make judgmental decisions on their own, for that they are still dependent on human accountants. Routine data collection jobs and procedures will be done by the machines or devices and human accountants will monitor these machines. In this way, they will have more quality time which they can spend in making judgmental decisions performing complex tasks. Automation is not meant to replace human force from the field of accounting but to assist them to work better. To compete and survive in an environment where automation can be seen everywhere, the accounting industry must accept automation fully. There is a great scope of automation in the field of accounting. The robotic process could help in improving the quality of routine tasks in a cost-effective manner. AI applications are going to help in the major area of taxation (Applebaum & Nehmer, 2017, p. 40-43). In future there is ongoing research where researchers are trying to find out how human and computers can collaborate to enhance the accounting processes. “Research might investigate organizational-change management programs for augmented intelligence that leverage human accounting knowledge and skills, heighten task performance, and support effective accountant reassignment to tasks of greater organizational value, resulting in increased job satisfaction” (Marshal & Lambert, 2018, p. 212).

The world is witnessing a technological advancement. The profession of accounting is going to see a great change in its processes and working because of the big technological advancements. Machines like robots, drones and bots are going to perform most of the regular accounting jobs. However, the role of the machines is only limited to helping and supporting human accountants. They are not going to replace them. They are meant to create better jobs and opportunities for the people in the field of accounting. Accountants will be able to focus on more complex and judgmental tasks. This will help them to improve professionally. The machines won’t be able to perform tasks themselves. They will need human supervision and monitoring, thus will create new roles for the accountants (Applebaum & Nehmer, 2017, p. 40-44). Big data has led to scope for more automation in the field of accounting leading to more career growth and various opportunities (Huerta & Jensen, 2017, p. 112). Many argue that all the accounting tasks can’t be automated. People believe that only the less complex and structured task can be automated. But this is not true. Technologies like; data analytics, and cognitive computing are working towards finding a way to enhance more complex accounting tasks like decision making and critical thinking. With better research and new discoveries, most of the accounting tasks can be automated (Marshal & Lambert, 2018, p. 202).

People fear automation. They think that new technologies and robotics will take away many professional jobs. Automation can cause high risk to the jobs that doesn’t require much professional knowledge and are of repetitive nature. The profession of accounting requires judgmental decision, critical thinking and professional knowledge and thus it is difficult to automate it with the current available technology. The current system of artificial intelligence can’t perform the tasks which requires deep knowledge of business and professional expertise (Huerta & Jensen, 2017, p. 102-103).

However, automation has the potential to create newer jobs. With the use of proper technology and better research most of the accounting jobs can be automated. Accountants will be able to focus on more complex and judgmental task. This will help them to improve professionally. The machines won’t be able to perform tasks themselves. They will need human supervision and monitoring, thus will create new roles for the accountants (Applebaum & Nehmer, 2017, p. 40-44). Big data has led to scope for more automation in the field of accounting leading to more career growth and various opportunities (Huerta & Jensen, 2017, p. 112). Many argue that all the accounting tasks can’t be automated. People believes that only the less complex and structured task can be automated. But this is not true. Technologies like data analytics and cognitive computing are working towards finding a way to enhance more complex accounting tasks like decision making and critical thinking. With better research and new discoveries, most of the accounting tasks can be automated (Marshal & Lambert, 2018, p. 202).