Have you heard of ChatGPT?  Artificial intelligence?  Right now it’s making a huge splash.

Alarmism over ChatGPT

I’ve heard a lot of alarmism about AI models over the past few weeks.  It’s been blamed for everything. From the end of tech and white-collar work, to the end of the world as we know it, AI is being blamed. So what will be the effect of AI tools such as ChatGPT?  Are we facing a dystopia controlled by computers like the HAL 9000 in 2001: A Space Odyssey?

AI Becoming Vital Tool

AI tools are quickly becoming vital to marketing, advertising, and content creation.  Software engineers are using them to simplify the coding process.  I am looking into ways to use them to streamline analytical processes for my clients.  However, AI has some severe limitations which are not likely to be overcome soon.

Why I’m Excited Over Ai

Before entering the accounting field, my original major in college was computer science, which is part of the reason I’m so excited about this emerging field.

“Computerphobia”

The personal computer era dawned in the early 1980s, bringing with it a wave of apprehension known as “computerphobia.” People expressed concerns about job displacement, complexity, and a dystopian future caused by computers.

Such fear was widespread that Time magazine published a cover story in 1983 titled “The Year of Living Dangerously,” highlighting common objections to personal computers. These objections encompassed privacy concerns, potential health risks linked to radiation exposure, and worries about computers dominating people’s lives.

Risks Vs Benefits

We have harnessed the power of computing to benefit ourselves and humankind, disregarding some valid risks like the NSA and cyberstalkers. Similarly, AI operates within limitations set by its programming and learning capabilities. While it can assist with cost/benefit analysis, it cannot make value judgments or reliably identify and solve problems. Thus, AI isn’t suitable for independent problem-solving or strategic planning.

It can’t even pass the CPA exam.

It can take over some entry-level jobs that do not require manual labor, creativity, or problem-solving.  I expect this to make job hunting a challenge for new graduates who have no experience. New grads, however, will likely be hired to help make sure AI doesn’t make egregious mistakes (it does).

How Intuit Uses AI

To enhance expense categorization for bank downloads, Intuit utilizes a combination of AI and rules. However, it is necessary to manually review and verify transaction accuracy. Determining the appropriate classification, whether it’s a capital expenditure on the balance sheet, an expense on the income statement, or an owner draw, cannot be automated. Additionally, revenue recognition timing is also a manual process.

Accounting Requires Judgement Calls

Accounting demands substantial judgment informed by GAAP, IFRS, the tax code, and the specific client’s needs. That’s why the most frequent response in accounting is, “It depends.” While AI can provide information and data analytics to aid in making these judgments, it cannot independently make judgments.

Donna Harris holds a BSci in Accounting and an MBA, and is the owner of Bookkeeping Made Simple.  If you’d like to have Bookkeeping Made Simple do your books, or you have questions, you can schedule an initial assessment online or call 801-692-0032 and one of our experts will be happy to help.