ChatGPT Isn’t Terminator for Accountants…Yet

Ed. note: the following is a guest post by Jack Castonguay, PhD, CPA, who has not yet been replaced by ChatGPT as far as we know. Or has he?

Was ChatGPT sent to us from the future to rescue the industry from the pipeline crisis by filling open accounting jobs with cyborgs and sentient machines? Not to my knowledge – though that doesn’t mean it won’t shake up our industry anyway.

Accounting is ridiculously rules-based: assets = liabilities plus equities; debits = credits; cash in > cash out, etc. It’s the black-and-white methodology that draws many students into it. And it’s the exact type of work that is prime for replacement by AI*. Some of it already has been. TurboTax and QuickBooks are full of rudimentary AI features and already have reduced the need for some bookkeepers and tax preparers. The products can sort accounts, predict the other side of a journal entry, and populate a tax form with high accuracy. However, compared to ChatGPT, their AI abilities are a toddler learning to walk. ChatGPT is Usain Bolt.

If you’ve been on an audit or prepared a tax return and at some point thought “a monkey could do my job,” you weren’t far off. A monkey probably can’t, but AI tools such as ChatGPT likely can (example: at Surgent, our algorithms can predict your exam score with over 90% accuracy, monkeys couldn’t even break 40). How much better would ChatGPT be at the same task with unlimited data inputs? If it can generate hundreds of thousands of protein sequences or map cancer progression, it can certainly summarize an FASB standard, assess a going concern risk, match documents, or determine the tax consequences for a partnership split. It’s the type of tool that the Big 4 firms envisioned having years ago and is part of the reason why they weren’t worried (until they were) about declining accounting enrollments in colleges and universities.

There are two ways we need to think about our Terminator moment: what it means today and what it could mean soon. Today, just because a tool with the ability to automate much of our work now exists, it doesn’t mean we need to drop everything and go back to school to become data analysts, engineers, or lawyers. But it does mean we need to learn how to utilize the tool in our jobs. Because ChatGPT is still “learning,” it’s currently far from perfect, even with the release of GPT-4, and can give inaccurate or incomplete information. It confuses like terms, particularly technical accounting terms.

Since it’s not perfect, it places an increased emphasis on knowledge and expertise. Sure, ChatGPT can write multiple memos in seconds that would’ve previously taken hours of work and five staff accountants, but we still need an accountant to determine if it’s right. And we still need an accountant to know what questions to ask it. The better the inputs, the better the outputs. The only way to know the best inputs is to have the existing knowledge. Knowledge will still be power. Accountants who can best work with ChatGPT will thrive, those who don’t will ultimately be out of a job.

The future is different. It isn’t just another game, it’s a different sport. The next version of language-based AI will be even more powerful, thorough, and accurate than we can envision right now. It’s going to improve and expand in mere weeks and months, not years and decades. It seems like every major tech company domestically and abroad is working to develop their own AI learning tools. More competition will lead to more innovation and abilities that we cannot even visualize today. The future ChatGPT may not look like the Terminator, but it will probably be way more advanced.

The largest accounting firms will start training their staff on the tools immediately, building existing employees’ knowledge and reducing the need to hire more staff down the road. It will also allow them to go after smaller clients and those with simple business models currently being audited or tax advised by small and medium-sized firms. It will eliminate the need for many entry-level and senior roles. It doesn’t seem like a stretch to look out and see a future where no one except the wealthiest clients prepare tax returns with human interaction or where large company audits are performed by auditor teams that can fit around a coffee table instead of a conference table.

ChatGPT may be a temporary solution for the pipeline problem of today. It already can do the work of entry-level staff. In the future, instead of eliminating the pipeline, it’s more likely to create an even greater need for technical expertise and the ability to synthesize outputs amongst a wide array of topics among entry-level staff. It will undoubtedly change the nature of work performed, but there will certainly still be work for accountants.

Maybe it was sent from the future after all – not to replace accountants, but to evolve us.

*In fact, a 2013 Oxford study predicted that accounting and auditing jobs had a 94% probability of being replaced with computers: https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf. This study caused quite a stir in the accounting profession when we finally noticed it a few years after it came out.