As digitization and automation influence more business processes, the need increases to master emerging technologies. This will be key to professional success for accountants, regardless of whether they work in public practice or private industry. Two of these technologies—blockchain and artificial intelligence (AI)—have the potential to reshape the accounting profession as we know it.
It is imperative that faculty, students, and administrators understand the implications of these tools for the profession. Here's a brief overview of what exactly these tools are, followed by suggestions on how accounting departments can introduce them to faculty and students.
Blockchain is a technology that was created to facilitate transactions involving the cryptocurrency bitcoin. Structurally, blockchain is a ledger of transactions recorded in a list of source records, called blocks. Each party in a blockchain transaction is assigned a unique identifier and is equipped with the technology to encrypt and decrypt the information communicated via the transaction. The transaction is then recorded in a block that can be viewed by all computers connected to the blockchain. While the amounts of money changing hands are verifiable, the individual parties are identified only by these identifiers, adding a layer of security and privacy to the transaction. Taking advantage of time-stamp functionality, users are able to trust that records are accurate and identify whether transactions are altered later. In addition, in a blockchain, any attempts to alter blocks earlier in the chain would require all subsequent blocks be updated, adding a level of protection against fraud.
Blockchain-style technology involves much more than bitcoin. Dozens of other cryptocurrencies operate on similar technologies. And blockchain technology can verify transactions beyond transfer of financial value—such as terms in a smart contract.
The business potential for the technology is broad and deep. In the accounting profession, blockchain could have interesting implications for auditors. Due to blockchain technology's automated, real-time verification and enhanced security, auditors might not have to spend nearly as much time on verifications, confirmation, and analyses of specific accounts. Blockchain could make audits considerably faster and less expensive to perform.
Organizations of all types are using AI in new and exciting ways. Imagine being able to use a vocally activated AI tool (think Alexa, Cortana, or Siri) to help you research the applicable reporting codification or tax code line item. The integration of IBM Watson by KPMG for audit purposes demonstrates that this is not a distant possibility—it is here! JPMorgan Chase was able to use AI to reduce the time needed to review contracts from hundreds of thousands of employee hours to mere minutes.
CPAs will soon be able to use AI for a variety of applications and tools—everything from social media analytics to real-time analysis of financial and operating performance and fraud detection.
Because AI can perform many of the simpler, more routine tasks that human accountants can, it has sparked fears that CPAs will lose their jobs to software. A 2015 PwC study named accounting clerks and bookkeepers as the workers most at risk of elimination due to technology. By performing rote tasks, however, AI can also give CPAs the freedom to do more complex advisory work on behalf of their clients.
How to start integrating technological trends into accounting departments
As technology continues to advance, become more cost-efficient, and proliferate throughout nearly every industry, accounting professionals will have to evolve to keep pace. Faculty can help by teaching students how to use and analyze the output of different technology tools. Here are some suggestions for introducing technology topics into accounting programs:
Ask for faculty volunteers. Have some faculty members act as "early adopters" who can then share their knowledge and experience with the rest of the department. Seek out faculty and instructors willing to experiment and up for the challenge of learning new technology tools. Consider offering a course release or other incentive to help address time constraints. Asking for volunteers demonstrates the organization's intent toward integrating these tools and allows the most interested individuals to step forward.
Encourage faculty education. When it comes to trending topics such as AI and blockchain technology, the reality may be that all parties involved (faculty, students, and administrators) need to obtain a better understanding of how these tools function.
Build the fundamentals first. Before practicing specific technological tools, students need to understand the fundamental concepts that drive the technology. Faculty can discuss topics like blockchain and AI, their implications for the profession, and potential for future growth in existing accounting courses. Including relevant market examples, which are numerous in mainstream media, will help emphasize the critical nature of these tools to students.
Upper-level undergraduate or graduate courses can build on this knowledge by including specific tools, applications, and case studies focusing on using these different tools. In either case, educating students at the undergraduate level, and reinforcing this introduction with specific applications will prepare students for the emerging field of data science.
Assign research projects on emerging technologies. Having students research and analyze AI and blockchain is a great way to familiarize them with the technologies. I have found the following approach to be most effective.
First, introduce the topic itself by using resources such as articles, open source videos, or some of the online courses mentioned above. Make sure that students are actually becoming aware of these technologies and their implications. Second, reinforce students' knowledge by including a few open-ended questions on exams or by having students write a research paper. Third—and perhaps most important—is to discuss these topics and trends at every applicable moment. As educators, we have collective responsibility to make sure that students and graduates are prepared for the workplace of today and tomorrow.
Group projects are a must. As technology automates some lower-level accounting roles, cultivating both higher-level analytic abilities and people skills is a must for accounting students. Group projects, in particular, represent both a reality of the current workplace and a set of skills that accounting professionals will need to excel moving forward. Although some students find group projects a bit cumbersome, the reality is that virtually every job in accounting and finance requires working with other professionals.
Blockchain and AI are not trends that will go away any time soon, and they are having tremendous influence on the accounting and finance profession. Getting the ball rolling, and beginning the process of integrating these tools into the classroom, is something that departments can, and should, start today.
Sean Stein Smith, CPA, CGMA, DBA, is an assistant professor at Lehman College in New York City. To comment on this article, email lead editor Courtney Vien.