Can you use AI and ChatGPT in your accounting practice?

This article was current at the time of publication.

Accountants and auditors are among the occupations most exposed to the fast-moving capabilities of artificial intelligence (AI) systems.

That’s according to a joint study titled GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models released in late March by researchers at the University of Pennsylvania and OpenAI, the Microsoft-backed company behind the development of the revolutionary ChatGPT AI software.

These highly sophisticated software systems use natural language processing, machine learning and data analytics to automate and enhance different aspects of work functions.

When used well, these systems have been designed, to quickly extract and analyse publicly available content from the internet to collate information and data, to respond to a user’s specific questions, to produce written materials, and even undertake mathematical tasks.

These can also have their limitations. Used incorrectly, these tools may make available client data to external sources, breach copyright and/or privacy legislation.

Early adoption

The benefits to leverage AI systems have sparked a flurry of activity across the accounting world as firms explore ways to integrate AI systems into their operations.

In March, KPMG announced it had partnered with Microsoft to develop KymChat, a private version of ChatGPT designed to “allow the firm’s employees to safely use the ground-breaking technology in the workplace”.

Also in March, PwC announced it had partnered with the AI start-up Harvey to deliver “human-led and technology-enabled legal solutions” to its global legal business solutions team.

The University of Pennsylvania and OpenAI research study found accountants and auditors had a 100 per cent exposure score in terms of occupations where AI software can be used to drive at least a 50 per cent reduction in the time it takes to complete certain tasks.

These are occupations “where we estimate that GPTs and GPT-powered software are able to save workers a significant amount of time completing a large share of their tasks, but it does not necessarily suggest that their tasks can be fully automated by these technologies,” the study states.

Tiffany Tan, CPA Australia’s Audit and Assurance Policy Lead, says: “Anecdotally, we understand audit firms won’t be using the free version of the ChatGPT in obtaining audit evidence as the AI tool is only drawing data up to 2021, therefore, not up to date.”

Tan also notes that some audit professionals view ChatGPT as “language” assisted software which generates and presents information in a convincingly articulate fashion, which may not necessarily reflect an accurate response to what is being asked.  

Reliance on convincing, but incorrect AI-based output without reperforming the work independently could put audit professionals at a significant risk. 

Smaller accounting practices

It’s already clear that smaller practices are also testing the waters with AI technologies.

One such practitioner is Alan Giffard CPA, Co-principal of G2 Accounting, who says “we’ve been experimenting mainly at this point”.

“We probably still don’t have much of a handle on the role it’s going to play in the business. It’s something that will still take a fair bit more experimentation.”

Giffard says he has been testing ChatGPT to draft automated email responses to clients based on their queries.

“That works OK. It probably needs a lot more tweaking and a lot more direction,” he says.

Giffard adds that he remains conscious about security limitations, such as not embedding sensitive customer data, such as their tax file number.

“My understanding is that the ATO is pretty firm on the technology that can be used that has tax file numbers associated with it. So, I don’t think this meets the criteria, as far as I’m aware.”

Australian Tax Office Second Commissioner Jeremy Hirschhorn told an international tax administration conference in April that he was concerned about the ability of AI engines to “generate absolutely compelling, plausible but completely incorrect responses”, especially with tax.

Giffard says he is also acutely aware that AI systems may draw on incorrect tax or accounting information.

“If it’s looking at rules that are outdated, that immediately makes the advice outdated as well. The reality is that GPT, as a function, analyses what statistically appears is most likely to be correct. 

“There are plenty of examples where someone has given it a simple question and it’s given an incorrect response,“ he says. 

CPA Australia Public Practice Manager Kristen Beadle CPA says member feedback has ranged between being cautious about what it can do, and optimistic about future benefits.  

“Some members are already using the technology for marketing materials, saving them time to focus on client-facing work. Others are looking into it as a means to assist with staff shortages, to undertake repetitive tasks and free up staff for more complex work.  

“However, users of the technology need to be cautious and understand the implications of what client information they may be sharing with the technology that can be used by malicious actors who may use the data in a cyberattack,” she notes.