How do accounting firms use AI? That’s what a team of Binghamton students found out

No matter where you look, artificial intelligence systems have become an integral part of various areas of the business world. But what difference could it make in the accounting department?

For six Binghamton University School of Management accounting students — Ernest Pang, Bonnie Huang, Carleigh Newman, Keith Pacia, Michal Seinfeld and Grace Sharon — that question helped launch a class project exploring the use of AI by half a dozen accounting firms to examine the Big Four. Some unique insights emerged.

“We wanted to approach this from all angles. Some people say AI is good for accounting because it increases productivity, but others believe it will lead to accountants being replaced one day,” Pang said. “One of its strengths is the ability to analyze large amounts of data. “However, to address the concerns surrounding AI, the policy, at least in the big four accounting firms, is to encourage accountants to use AI in their work while ensuring that they make all key judgments themselves.”

Students learned that in 2015, 10% of companies were using AI or planning to do so soon. By 2019, that number increased to 37%. After analyzing some of the ways accounting firms have integrated AI into their business strategy, the six students presented their findings to their classmates in Assistant Professor of Accounting Flora Sun’s cost accounting class.

As the students found in their research, all four major companies – PwC, Deloitte, EY and KMPG – have used AI in similar ways:

• EY, which announced a $1.4 billion investment in AI in September 2023, is using it for market insights and social monitoring, better interaction with customers through chatbots, and optimizing operations and cybersecurity. This enabled EY to increase its global GDP by 1.4% and strengthen international competitiveness through a unified, data-driven approach.
• For PwC, which in April 2023 announced a $1 billion investment in AI over the next three years, uses included aggregating relevant data, conducting risk analysis for tax purposes and predicting client sales. As a result, PwC saw at least a 20% increase in IT, finance and marketing productivity, as well as other benefits in areas such as customer service with reduced call wait times.
• Deloitte launched an internal AI platform in fall 2023 and is using it to improve workplace efficiency by supporting employees with daily tasks such as writing code, creating content and research. With this came internal debates about whether AI would create or destroy jobs, and questions about how confident employees could be about its reliability.
• KPMG uses AI on multiple fronts: KPMG Ignite, an AI platform for rapid problem-solving support, and KPMG Trusted AI, which helps design, create, deploy and use AI technology solutions responsibly and ethically. The company employs various other generative AI initiatives to support content generation, customer engagement, and provide data-driven insights. Additionally, KPMG has formed strategic partnerships with Microsoft and IBM to support the development of tailored AI solutions for various industries and enhance data analytics and compliance capabilities.

While studying mid-sized companies, particularly Grant Thorton and RSM, SOM students learned that AI is primarily used in the areas of risk, compliance and internal audit; It helped create a framework for solving customer problems.

Seinfeld said their research made it clear that the Big Four and mid-sized companies appeared to understand the risks of AI in relation to privacy and governance issues.

“It also became clear that every company was doing its part to mitigate risk by implementing internal control systems,” she said, “and as far as we could tell, that seems to be working for all companies.”

Sharon said it was not surprising that major accounting firms wanted to be proactive with AI, which had become “a household name at this point”, but it was interesting to see how the different firms were making a point of using it for internal purposes .

When they began the project, team members assumed that AI would be used in a more comprehensive manner, but discovered that different AI systems were used for specific tasks within the field.

“If this was, say, five years ago and not many people had heard of AI or ChatGPT, it would be really confusing,” Sharon said. “But it makes sense that these large companies would find a way to put these systems to good use without taking risks that would put internal data at risk.”