Artificial intelligence (AI) is regularly a hot topic in the news, and you may have recently heard about Open AI, Generative AI, or specific products like ChatGPT. As a tax and accounting professional, you might be asking, “What does all of this mean, and should I care?”
To answer those questions, let’s take a look at the generative AI: how it works, some interesting potential uses, and how it could affect the future of our profession.
What is generative AI?
At a high-level, generative AI is a type of artificial intelligence that can generate new data or content that is similar to or inspired by existing data. Machine learning is applied to the data to learn patterns and features that are used to create new data or datasets. ChatGPT is a type of generative AI that uses specialized techniques to create human-like responses.
For example, ChatGPT draws from large amounts of text data to generate new text that is similar to human language. When a user inputs a message or question (a prompt), ChatGPT generates a response based on its understanding of the input and its ability to use the patterns and features it has learned to create an appropriate response.
What do accounting professionals think about generative AI?
Most firms and accounting professionals I’ve spoken with are familiar with ChatGPT, as it’s been widely covered in the media this year. While they have started studying the technology to determine how it might impact the profession, there seems to be a sense of mistrust—which is often common in the early days of a new, disruptive technologies.
As we start down this path, it is clear that there is still a long way to go before tools like ChatGPT are fully embraced and relied upon with any level of confidence. Given that it is still early in the lifecycle of this technology, we recommend that—as a trusted advisor to your clients—it’s important for you to understand major trends that impact them and their businesses.
How do I learn more about generative AI, like ChatGPT?
The best way to understand this technology is to give it a try. ChatGPT has received much of the news coverage, but there are many other tools available today, and with the significant investment in this space you can expect to see more coming online soon. A handful of well-known AI tools include Google Bard (LaMDA), Microsoft Bing AI, DeepMind Sparrow, Character AI, and Amazon Codewhisperer among others.
What opportunities are made available by generative AI?
Since we’re still in the early days of generative AI tools like ChatGPT, how they will impact our profession remains to be seen. However, there are already plenty of examples of how these tools can be used. Some common tasks that could be taken over—or assisted—by a tool like Chat GPT include computer programming, basic email, mid-level writing, media planning and buying, and legal administrative functions.
But what about usage in the tax and accounting profession? Can ChatGPT help with tax-related questions, and is the AI-generated answer correct? As of today, the general consensus is “maybe, maybe not.”
What happens if you ask ChatGPT about filing an extension? I entered the following questions: “If I’m expecting a tax refund, what will happen if I file for an extension? Will I have to wait to get the refund?” Here is the response:
If you are expecting a tax refund and you file for an extension, you will still have to wait to receive your refund. Filing for an extension extends the deadline for filing your tax return, but it does not affect the timing of receiving your refund.
When you file for an extension, you are requesting additional time to submit your complete and accurate tax return. However, any refund owed to you will generally not be issued until after you have filed your tax return and it has been processed by the tax authorities.
The exact timeline for receiving your refund can vary depending on various factors, such as the volume of tax returns being processed, any errors or discrepancies in your return, and the method you choose to receive your refund (e.g., direct deposit or paper check). Generally, refunds are issued within a few weeks after the tax return is processed, but it can take longer in some cases.
It's important to note that filing for an extension only extends the deadline to file your tax return; it does not grant an extension to pay any taxes owed. If you anticipate owing taxes, it is generally advisable to pay the estimated amount by the original deadline to avoid potential penalties and interest charges.
But does this mean that tax advisors will be replaced by generative AI? Thankfully, the answer is no, but it shouldn’t come as a surprise that taxpayers are looking into this technology. As these tools mature, there is no doubt that the question will keep coming up.
So, as a tax professional what should you do?
- Educate yourself. This technology is here to stay and is going to increasingly become part of our daily lives.
- Try it out. You can use a tool like ChatGPT for free by creating an account on their website. Learning how to write a good natural-language query will result in much better answers.
- Look for opportunities to use it with your customers.
- Prepare for a world where basic tasks are automated. Accountants and tax professionals have been doing this for years as new technologies have been introduced. This is just the latest new technology that a firm can use in their practice.
- Explore Advisory Services as a growth area. If you’re not investing time and energy in developing your advisory skills, then consider starting today!
Repetitive, manual tasks are readily replaced, but human interaction, intuition, and connection are skills that are not easily duplicatable with AI.
What are the risks associated with this technology?
If you or members of your staff are still performing repetitive work, then now is the time to consider learning new skills or upskilling staff to take on more value-added tasks that people are best equipped to handle. Will you or your staff members lose their jobs in the future to technology? It's hard to say for sure, but a quick search will indicate the financial jobs that are most exposed to artificial intelligence.
As mentioned above, the best way to learn more about a technology is to try it. At this time, you can test drive ChatGPT for free by signing up at OpenAI.com. Here are just a few examples of prompts that you can use:
- How would I describe generative AI technology like ChatGPT to a professional who is afraid it will take away their job?
- How can ChatGPT augment the work of an accountant?
- I'm a tax preparer, should I be worried about ChatGPT taking my job?
- Can ChatGPT complete and file a US federal tax return?
- How long will it be before ChatGPT can completely prepare and file a US Tax return?
As with any new technology, there are always risks that could impact our profession. There is still a lot for us to learn about how AI tools like ChatGPT will impact the tax and accounting profession.
As a profession, we’ve seen many new technologies introduced that significantly improve our ability to do our work and provide exceptional service to our clients. This is just the latest technology that we need to learn and understand, but it certainly won’t be the last.
For the forward-looking professional, we recommend that you take time to learn the technology, understand how it can impact and improve the services provided by your firm, and create a long-term strategic plan to address it as it matures.
Where can I learn more about generative AI tools like ChatGPT?
There is a wealth of information available in this area, below is a short list of articles that you may find illuminating:
- “ChatGPT may be coming for our jobs. Here are the 10 roles that AI is most likely to replace.”
- “There 20 jobs are the most ‘exposed’ to AI, ChatGPT, researchers say”
- “Art of Accounting: ChatGPT”
- “From CEOs to Coders, Employees Experiment with New AI Programs”
- “Can I replace my Tax Advisor with ChatGPT?”
About the author
Matt Jagst is a seasoned tax and accounting technology product executive with over twenty-five years of experience. Matt began his career at Creative Solutions, which later became Thomson Reuters Tax & Accounting, and was the VP of Product Management for partner firm applications at Botkeeper, a start-up providing human-assisted AI for client accounting services. As Vice President and Head of Product Management at Drake Software, Matt connects with customers and prospects to identify pain points, track key trends and opportunities in their professions, and updates and releases products to market that solve those problems. Matt lives in Michigan with his wife and family.