Artificial intelligence (AI) is reinventing the way we conduct business. It is poised to have a particularly significant impact on the accounting profession. While it is mainly used to combat time pressure and capacity issues, it can also help firms adapt in an evolving regulatory environment.
Firms face data governance challenges due to the changing regulations around information security. The introduction of AI into the environment may be a solution as they navigate and adopt new technologies.
IT departments can look to AI solutions that enforce policies and build compliance measures
The risks
Due to time pressure, employees may deliberately avoid established company procedures and work outside of processes, using their own software and data storage solutions to meet deadlines. On the surface this may meet the end goal of the engagement, but it puts firms at risk of non-compliance.
International networks of firms have the additional complexity of tailoring practices to each region in order to adhere to local data security laws, industry regulations and standards.
To mitigate these risks, IT departments can look to AI solutions that enforce policies and build compliance measures into their information management systems.
AI can support data security compliance by applying pre-defined rules
How AI helps
The many thousands of documents that firms handle each busy season are subject to some level of compliance. It is easy to lose sight of what policies need to be applied due to document sprawl, complex information security requirements and the sheer volume.
AI can support compliance with data security protocols by applying pre-defined rules based on the type of document or information. This can include documents that require signature or review, those that include personally identifiable information data that is part of a specific or confidential client engagement, or those subject to a retention policy. The technology can identify the relevant category of information and apply predefined conditions, automatically eliminating manual error or workarounds.
Early on in the process, firms need to be hands-on to guide machine learning
At the same time, AI can capture summaries of information using large language models and retrieve relevant information quickly via prompts. This saves staff time when reviewing historical information or performing research. With less time pressure and AI-driven security measures, staff can focus on more complex areas of their work and the IT department can ensure that policies are enforced.
Learning on the job
The process of enhancing the information security environment using AI begins by setting up automated information management systems, where the firm classifies small sample sets of data in the system. AI begins to identify patterns in the classifications, and learns how to analyse the data and re-perform the classification correctly.
Early on in the process, firms need to be hands-on to guide machine learning and correct errors in the event of any misclassifications. The more widely the program is used correctly, the faster it can learn and apply logic to data based on the patterns identified during its learnings.
Firms can pair the AI with their third-party information management software and other existing tools, applications and document repositories. This creates a unified system that automatically updates itself, so it is also simpler to maintain.
AI capabilities are just getting started. Going forward, they will improve the oversight and compliance environment for firms and IT departments.
More information
AB has a range of articles on artificial intelligence, including ‘Improve client experience with AI', ‘Mitigating AI risk’, ‘AI helps create financial statements‘ and ‘How technology is transforming audit‘.
See also ACCA’s short guide to AI.
