Introduction

In recent time, the level of digitalization and technological development has taken place rapidly and has affected different fields. The accounting and reporting field is no exception and has undergone rapid changes. The technological advancements which can bring about maximum changes in the accounting field are Artificial Intelligence (AI) and Blockchain technology. The main purpose of this assessment is to explain in details the concepts of the above stated technology and there impacts on accounting profession. The assessment will also be analyzing the article which is provided (Russell & Norvig, 2016). The assessment will also be discussing about the possible changes which can be brought about in the accounting profession with the implementation of the technologies which are stated above.

1. Artificial Intelligence and Blockchain

Artificial intelligence may be defined as a part of the technological development in computer science which deals with creation of machines which will be having intelligence similar to that of a human being.  In today’s generation, computers have been built which has artificial intelligence incorporated in the same and are capable for performing numerous activities of the business (Michalski, Carbonell & Mitchell, 2013). Machines which have artificial intelligence incorporate in them can perform activities such as learning, voice conversation, speech recognition, problem solving, searching and planning. Examples can be given of IBM Watson and Chase which are used by KPMG and JPMorgan for minimizing the time required and also the make the operations of the business more efficient (Nilsson, 2014).

Blockchain technology is related to transactions and the technology provides the users to make payments or receive the same in cryptocurrency bitcoin. The concept of bitcoin is from a transaction ledger which records lists which are known as blocks. The parties who are involved in bitcoin transactions have unique identifiers and also have technology which can be used for encrypting and decrypting of transactions (Pilkington, 2016). The identifiers are used for the purpose of identifying the parties who are involved in the transaction. The time-stamp functionality which is associated with the technology provides the users with the benefit of relying of the accuracy of the information which relating to specific transactions of the business.

It is anticipated that use of blockchain technology can bring about positive changes in the accounting and auditing professions. The appropriate recording of transaction can bring about reduction in fraudulent activities in a business environment. The implementation of blockchain on a universal basis in a business can be beneficial to the auditors as the technology is automated and thereby improves security and real time verification of financial data. The information can also be confirmed and evaluated using block chain technologies (Crosby et al., 2016). In addition to this, the advancement of blockchain in business has implications in accounting process as well as the currency is virtual in nature and therefore will be more efficient and time saving for the business.

2. Application of Artificial Intelligence and Block Chain in Accounting

Artificial Intelligence can be used in the accounting framework for extraction of information or evaluation of information and even both for analysis of risks. In a business environment it is often the case that management cannot generate invoices and also estimate revenue generating possibilities which can be addresses by using Artificial intelligence (Wenger, 2014). A company which faces such issues can effective addresses such issues by using Pegg which is innovative application which is developed by artificial intelligence. Pegg can manage transaction of the business and the application is also fast and reliable and can even be used for communication process.

In case a business uses Sage Cloud Accounting, Pegg can easily be supported by Sage software and can synchronize all transactions of the business. The application is capable of generating invoices automatically without needing any human interventions (Pannu, 2015). Thus, it can be said that the artificial intelligence can bring about improvements in the accounting process and can reduce the time which the management spends on business administrations.

When considering blockchain technology, an example can be given for transactions between two companies. Even for a simple sale transaction, the management of the company needs to maintain various ledger account which are sales ledger, outward product shipment ledger, records for customer invoices and cash ledger for recording cash inflows of the business.

In the case which is stated above if the business used Blockchain technology, the management will be able to improve the supply chain, logistics and payment function of the business. The parties who are involved in the transaction will be having full information about the progress of the transaction using blockchain technology. In addition to this, the auditor of the business can also rely on the information which is provided for such transactions. The major advantage of using blockchain technology in the reporting framework of the business is to ensure that the response time for the business is reduced and also to help in the validation of the transaction which is undertaken by the business.

3. Analysis of the Viewpoints of the Author 

As per the author, Hood (2018), the introduction of AI and Blockchain technology in business environment will be more beneficial than causing any threats. The author is of the opinion that AI will allow auditor to conduct audit procedures at a deeper level as AI technology will allow the auditor to access wide volume of data. This will be improving the overall audit process and leave little room for detection errors. However, the only consideration is that the auditor should have adequate knowledge about the AI technology and its workings. The accountants of the business also have a vital role to play in this aspect in the operation of the machine system and inputting financial information in the system. The level of accuracy is anticipated to rise with the implementation of AI system in accounting field. Thus, AI will help professional accountants to grow and also improve the reporting framework of the business.

Block chain technology as pointed out by the author is still a developing prospect and at present has limited use but the same will have significant impact in the future operations of the business. Blockchain technology can be used for wide range of purposes such as record maintenance of real estate business or any other business and can be used for personal record maintenance. Blockchain can be used by individuals to maintain bank accounts and communicate with different parties. Bitcoin which is a form of cryptocurrency also uses the technology of blockchain. Bitcoin is a virtual form of money which will be having quite a significance in future.

Therefore, it is clear that author Hood (2018) is correct in estimating that AI and Blockchain technology has more benefits than threats and therefore such technologies needs to be further developed in order to make these useful in the coming future.

4. Changes in Financial Reporting Regulations along with Technological Advancements

The financial regulations which are followed at present will not be the same in coming future which is mainly due to the advancements in the accounting field as well. The boards of accounting are continuously working on making improvements in the present conceptual framework and accounting standards which are issued by such boards. The technological level is also improving and research shows that with improvements in technology all fields are impacted and rapid changes also takes place in them as well (Kokina & Davenport, 2017). In accounting process as well changes are inevitable with the developing technology. The reason for changes to take place can be pointed below:

• The accounting professionals will be using smart software and integrated accounting programs in order to maintain accounting information or even generate financial reports for the business. Various accounting software are coming into existence such as ERP system, integrated packages and some of the business have already implemented the same in the reporting framework.
• Amendments which are brought about by IASB in accounting process so as to keep up with the changing market and address new issues or making improvements in earlier standards. This is a continuous process and the board continuously updates the reporting framework in order to keep up with transfer pricing, tax regulations, reduction of frauds.
• Changes in regulations also takes place due to bring about a transparency and accountability in the reporting framework of the business.

Conclusion

The above discussion and analysis of the journal paper reveal the fact that Artificial Intelligence and Blockchain technology are products for future and will have significance in coming future. Both the technology in present time itself are getting popular and in due time this popularity and usefulness will only increase. The assessment shows hypothetical examples in order to explain the usefulness and application of both AI and Blockchain technology in accounting profession. The assessment in the concluding paragraphs emphasizes that accounting profession is bound to undergo changes as the technology changes and thus making the accounting process more effective and efficient.

References

Crosby, M., Pattanayak, P., Verma, S., & Kalyanaraman, V. (2016). Blockchain technology: Beyond bitcoin. Applied Innovation, 2, 6-10.

Kokina, J., & Davenport, T. H. (2017). The emergence of artificial intelligence: How automation is changing auditing. Journal of Emerging Technologies in Accounting, 14(1), 115-122.

Michalski, R. S., Carbonell, J. G., & Mitchell, T. M. (Eds.). (2013). Machine learning: An artificial intelligence approach. Springer Science & Business Media.

Nilsson, N. J. (2014). Principles of artificial intelligence. Morgan Kaufmann.

Pannu, A. (2015). Artificial intelligence and its application in different areas. Artificial Intelligence, 4(10), 79-84.

Pilkington, M. (2016). 11 Blockchain technology: principles and applications. Research handbook on digital transformations, 225.

Russell, S. J., & Norvig, P. (2016). Artificial intelligence: a modern approach. Malaysia; Pearson Education Limited,.

Wenger, E. (2014). Artificial intelligence and tutoring systems: computational and cognitive approaches to the communication of knowledge. Morgan Kaufmann