Faculty of economics and business administration a future in accounting without human intervention

UNIVERSITY OF GHENT FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION A FUTURE IN ACCOUNTING WITHOUT HUMAN INTERVENTION Number of words: 17,117 Master’s Dissertation submitted to obtain the degree of: Master of Science in Business Economics - Accountancy Academic year: 2017 – 2018 Student: Mélanie Simon Student number: 01615385 Melanie.Simon@UGent.be Promotor: Prof Dr Patricia Everaert Patricia.Everaert@UGent.be Title page Title: A future in accounting without human intervention Author: E-mail address: Student number: Mélanie Simon Melanie.Simon@UGent.be 01615385 University: Faculty: Study: Study year: University of Ghent Faculty of Economics and Business Administration Master of Science in Business Economics – Accountancy 2017 – 2018 Promotor: Email address: Prof Dr Patricia Everaert Patricia.Everaert@UGent.be Document status: Number of words: Date: Place: Final version 17,117 4th of June 2018 Ghent Abstract Objectives: The aim of this study is to examine the impact of automation on the accounting profession, in order to answer the question if a future in accounting without human intervention is possible Background: In order for automation to replace the accountant, technology needs to provide useful financial information; it needs to be relevant, represented faithfully, comparable, verifiable, timely and understandable Systematic literature study: 32 articles were selected, main subjects identified were: consequences on accounting, moral decision-making, future role, implications on small accounting firms, implications on the labour market and solutions Methods: Semi-structured interviews were conducted with accountants from eight different companies in Belgium and Luxembourg Professionals have been interviewed regarding their use of technology and their future perspective on the accounting profession Results: Eight interviews have been conducted, main subjects identified were: the use of automation, qualitative characteristics, skills and implication on small accounting firms Results show that the accountant will be using automation for routine tasks, rather than being replaced by it Tasks that require critical-thinking and creativity seem to be more difficult to be automated In the coming years, the technology will be able to assist accountants in non-repetitive tasks The business model of accounting firms will change and accountants who are not ready for automation will be at risk of being replaced by automation Specific skills will already need to be acquired before starting to work Relevance for practice: Accountants will shift to either advisory or consultancy IT-, tax- and analytical skills will have to be developed Universities will need to change their education programs in order for future accountants to be ready to work alongside automation Table of content Introduction 1.1 Context 1.2 Problem Statement 1.3 Research question 1.4 Structure of the thesis 9 10 10 Artificial Intelligence and automation 11 The Accountant, Auditor and Management Accountant 3.1 Definitions 3.2 A brief history of the accountant 3.3 Financial reporting 3.3.1 Objectives of the financial reporting 3.3.2 Qualitative characteristics of useful financial information 13 13 14 15 15 16 3.3.2.1 Fundamental qualitative characteristics 3.3.2.2 Enhancing qualitative characteristics 16 17 Systematic literature study 4.1 Databases and search strategy 4.2 Study selection 4.3 Quality appraisal 4.4 Data extraction 4.5 Description of the studies 4.6 Consequences on the accounting profession 4.7 Moral decision-making 4.8 Future role 4.9 Implications on small accounting firms 4.10 Implication on the labour market 4.11 Solutions Methodology 5.1 Research design 5.1.1 Interviews 5.1.2 Population 5.1.3 Place 5.1.4 Description of the respondents 5.2 Data collection 5.2.1 Semi-structured interviews 5.3 Reliability and validity 5.3.1 Reliability 5.3.2 Validity 5.3.2.1 Internal validity 5.3.2.2 External validity 5.4 Ethical considerations 19 19 19 18 24 24 25 30 30 32 32 33 35 35 35 35 35 36 37 37 37 38 38 38 39 39 Results 6.1 Description of the results 6.2 The use of automation in the company 6.3 Qualitative characteristics of the financial information 6.4 Skills 6.5 Small accounting companies 41 41 41 47 51 57 Discussion 59 Conclusion 61 Limitations 63 10 Future research 65 11 Management and policy implementations 67 References 69 Annexes Annex 1: Printscreen databases a ABI/INFORM Collection b Accounting, Tax and Banking Collection c Web of Science Annex 2: Overview selected articles Annex 3: Interview guideline Annex 4: Confidentiality agreement 77 78 78 78 79 80 89 89 Acknowledgments The completion of this thesis has been very fascinating and instructive, but also hard work These seven months of work have been very challenging for me and I would like to thank the people who contributed directly or indirectly to the completion of the work presented in this thesis This accomplishment would not have been possible without them I would first like to thank my promoter, Prof Dr Patricia Everaert The door to her office was always open whenever I had questions about my research I thank her for advising and guiding me to the right direction during these last couples of months I would like to express my gratitude to all the respondents of the interviews for taking time to participate in this study My sincere gratitude also goes out to Inge van der Veen and to Casper van den Berg for carefully and critically reviewing my thesis I would especially like to express my gratitude to my partner for providing me moral and intellectual support throughout the process of researching and writing this dissertation Without him I would not have come this far List of abbreviations AI Artificial Intelligence BDO Binder Dijker Otte CEO Chief Executive Officer CFO Chief Financial Officer CO Controlling FI Financial Accounting GDPR General Data Protection Regulation IASB International Accounting Standards Board IBM International Business Machines IFRS International Financial Reporting Standards IT Information Technology KPI Key Performance Indicator KPMG Klynveld Peat Marwick Goerdeler LPL Lo Presti Ludovic PS Project System Introduction The first chapter describes the context and the problem statement Then, the research question will be presented and the structure of the thesis will be described 1.1 Context In today’s modern world, a lot of technologic advances have been developed at an undoubtedly fast rhythm, amplifying the need for companies to invest in Artificial Intelligence (AI) and automation At Google's annual Input/Output developer conference, Google affirmed its desire to integrate Artificial Intelligence into people’s daily life through a smart personal assistant (Staff, 2017) Other technology giants as Apple, Facebook, Microsoft and Amazon are also interested in AI and invest heavily in this technology The use of Artificial Intelligence and automation can reduce the need for human labour This leads to uncertainty concerning certain professions, such as accounting (Manjoo, 2017) According to a study conducted by Frey & Osborne (2017), 702 job titles are at risk of automation Among these professions, accounting is on top of the list with 94 percent probability of being computerized in the next two decades (Nagarajah, 2016) Artificial Intelligence can be integrated into accounting processes and thereby replace humans In fact, an artificial agent called Amelia has already started at Shell and Baker Hughes (two of the biggest gas groups) to take over the duties of accountants and call centre agents The system has the ability to understand natural language that allows to interact with humans It does not only recognize words, it also understands the meaning of them These are tangible signs that the employment of white-collar workers could be threatened by the rise of Artificial Intelligence (Twentyman, 2017) Recently, International Business Machines (IBM)'s AI has demonstrated its exceptional ability to replace humans in performing tasks previously reserved for human intelligence The software can answer any question asked by a human in natural language, orally or in writing, in eight different languages (Tual, 2017) 1.2 Problem Statement According to an analysis provided by Accenture, 40 percent of transactional accounting work could be automated by 2020 (Seek, 2017) As an authority on the profession, the Association of Chartered Certified Accountants is sceptical about the future of the accountants The skills that accountants nowadays apply may not be relevant anymore in the next coming years (Galarza, 2017) The aim of this study is to research the impact of automation in the accounting field In order for automation to be able to replace accountants, useful financial information still has to be provided Therefor, the attributes that make financial information useful also have been researched 1.3 Research question The following research question is formulated: is a future in accounting without human intervention possible? In order to answer this research question, a systematic literature review and interviews have been conducted First, all the literature regarding the impact of technology on the accounting profession has been gathered Later, several interviews have been conducted with eight different Belgian and Luxembourgish companies 1.4 Structure of the thesis This thesis consists of eleven chapters The first chapter is the introduction in which the context, the problem statement and the research question is described The second chapter consists of background information regarding Artificial Intelligence and automation The third chapter consists of definitions of the accountant, the auditor and the management accountant The qualitative characteristics will also be addressed in this chapter The systematic literature review can be found in chapter four including the search strategy and the results The methodology of the empirical study can be found in chapter five, where the study design, the data collection and the reliability and validity The sixth chapter consists of the results from the semi-structured interviews The discussion can be found in chapter seven, in chapter eight the conclusion and in chapter nine the limitations Suggestions for future research are described in chapter ten Finally in chapter eleven, the management and policy implications of this study are given 10 Annexes Printscreen databases a ABI/INFORM Collection b Accounting, Tax and Banking Collection c Web of Science Overview selected articles Interview guideline Confidentiality agreement 77 Annex 1: Printscreen databases a ABI/INFORM Collection b Accounting, Tax and Banking Collection 78 c Web of Science 79 Annex 2: Overview selected articles Author Title Year Country Al-Htaybat et al Big Data reporting: paradoxes and corporate impacts and 2017 United Kingdom Anonymous Expert Systems for Accountants: Has Their Time Come? 1987 United States Arntz et al Revisiting the risk of automation 2017 Netherlands Study objective Method Findings The purpose of this paper is to investigate the phenomenon of Big Data and corporate reporting, and to determine the impact of Big Data and the current Big Data state of mind with regard to corporate reporting, what accountant and nonaccountant respondents’ perceptions are of the phenomenon, what the accountants’ role is and will be in this regard, and what opportunities and risks are associated with Big Data and corporate reporting Furthermore, this study seeks to identify the inherent technological paradoxes of Big Data and corporate reporting The paper identifies the benefits of automation Interview Three topics, or categories, emerged from the data analysis, which have sufficient explanatory power to illustrate the phenomenon of Big Data and corporate reporting, namely the Big Data state of mind and corporate reporting, accountants’ role and future related to Big Data, and perceived opportunities and risks of Big Data Features of a new approach to corporate reporting were identified and discussed Furthermore, four paradoxes emerged to express inherent opposing positions of Big Data and corporate reporting, namely empowerment vs enslavement, fulfilling vs creating needs, reliability vs timeliness and simplicity vs complexity Literature review Various empirical assessments suggest that up to half of all jobs in western industrialized countries are at risk of automation in the next 10 to 20 years This paper demonstrates that these scenarios are overestimating the share of automatable jobs by neglecting the substantial heterogeneity of tasks within occupations as well as the adaptability of jobs in the digital transformation Quantitative research The benefits from using expert systems to perform these tasks include: the preservation and distribution of expertise, the improvement of personnel productivity, The enhancement of quality control, the facilitation of education, and the facilitation of complex analyses Potential accounting applications of Expert Systems include: audit and tax planning, internal control and accounts attribute analyses, quality reviews, decision making, management consulting, and training The study reveals a serious and systematic upward bias in occupation-level estimates of automation potentials compared to a job-level approach, as workers specialize in nonautomatable niches within their profession The automation risk of US jobs drops from 38% to 9% when allowing for workplace heterogeneity 38% of the workers perform jobs with a risk of automation above 70% 80 Baldwin et al Opportunities for artificial intelligence: Development in the accounting domain: the case for auditing 2006 United States This paper reviews the nature of accounting and auditing problems and the need for application of Artificial Intelligence (AI) technologies to the discipline Literature review Beaman et al Information Technology, Decision Support and Management Accounting Roles 2007 United States Two surveys Blum, Albert A Job skills for automated industry 1986 United States The paper investigates the possibility that accounting functions within organisations are becoming restricted to the areas of financial reporting and transactions processing, rather than decision support and problem solving The paper studies the required skills for automated industry Literature review A number of types of decisionmaking theory and AI technology have been applied to auditing and assurance problems Not all applications of AI to audit problems have proven successful in the long run Abdolmohammadi (1991) studied 332 tasks that auditors perform Although the number of potential tasks is high, not all are suitable for AI application Some are very structured and fairly routine, such as computation of inventory ratios Others are much less structured and rely on uncertain and incomplete information, such as a going-concern determination Research on AI for these tasks will be improved if accounting researchers and AI researchers across disciplinary lines and work together Furthermore, most of the AI research in auditing and accounting has involved expert system technology Clearly, more complex AI applications can be created to solve some auditing problems more fully Audit tasks, such as analytical review procedures, materiality assessments, going-concern decisions and risk assessment, are complex and important Performing these tasks poorly has dire consequences (e.g Arthur Andersen) The potential for improvement through the development and use of complex AI applications, such as expert systems, genetic programming, neural networks, fuzzy systems and hybrid systems, should be investigated to the fullest extent possible The findings of both studies show that management accountants perceive they spend on average only a third of their time on the latter types of management accounting activities The paper also identifies the specific IT skills necessary for decision support systems and discusses how such skills should be incorporated in accounting education programs Present employees tend to lack “basic qualifications”, and that the schools have to provide them, as well as provide retraining for the adults Companies will not retrain employees who not have adequate basic training Employers are often requiring a high school diploma for jobs that formerly did not require it, and those jobs that require more education are increasing faster in our labour market than those, which require less education 81 Chase et al Artificial Intelligence and Big Six Accounting 1991 United States This article studies the use of Artificial Intelligence in the form of Expert Systems in large accounting firms Literature review Chelliah Will artificial intelligence usurp white collar jobs? 2017 United Kingdom In view of recent advances in Artificial Intelligence (AI), has the time arrived for the demise of white collar jobs and how does this change the shape of the workforce, and HR’s role in managing it? Literature review Cole, R C Jr & Hales, H L How Monsanto Automation justified 1992 United States The paper identifies the keys to success in automation Case study Coyne, J G., Coyne, E M & Walker K B Accountants and Tech : A game changer 2017 United States The paper studies the skills that accountants will need to be able to work with automation Literature review In the future the number of experts systems will increase heavily To survive to this new technology, expert systems will not be only used by big accounting firms, but by small companies as well Public accounting is an activity that lends itself to the application of AI technology It seems clear that AI will be integrated into the daily operations not only by the larger firms but of all public accounting firms that wish to maintain a competitive advantage in the twenty-first century The humans are clearly in competition with AI Since 1950 the increase in investments in capital dropped the employment in manufacturing However, it increased the jobs in services from 50% to 70% The employees will have to work with machines and the whitecollar jobs might be replaced by AI Develop an overall vision of the future – a long term plan – and justify the entire plan as a whole; Analyse and define the key cost drivers at each step of the production process; Implement measurement techniques to track improvements and their impact on operations; and Concentrate on overall process and quality improvement, not just direct labour savings Because employers have begun to demand new skills of accountants, professional organizations like IMA® (Institute of Management Accountants) should continue to encourage and work with the university community to reevaluate the current model for accounting information systems and the encompassing curriculum to determine what revisions are necessary to train accountants Additionally, we suggest exposing students to enterprise-grade operating systems (Unix and Linux) and database management systems (Oracle, MySQL, Apache Cassandra) Because of an increase in in-house software development, we also propose that students learn about opensource software and current software development methodologies, especially DevOps 82 David H Why are there still so many jobs? The history and future of workplace automation 2015 United States The paper investigates the impact of automation and new technology on middle class jobs Literature review Frey et al The future of employment: How susceptible are jobs to computerisation? 2013 United States The article examines how susceptible jobs are to computerisation To assess this, we begin by implementing a novel methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier Quantitative research Gamage Big Data: are educators ready? accounting 2016 Australia Literature review Gonzalez et al Factors Influencing the Planned Adoption of Continuous Monitoring Technology 2012 United States This paper explores the latest developments in Big Data and its impact on accounting education As such, it reviews Big Data developments with specific reference to the accounting profession It also presents some of the initiatives taken by the professional accounting bodies and universities to address Big Data topics in the accounting curriculum The authors are interested in the general adoption of the technology, whether by management or auditors, and therefore make no distinction in this regard Survey While some of the tasks in many current middle-skill jobs are susceptible to automation, many middle-skill jobs will continue to demand a mixture of tasks from across the skill spectrum For example, medical support occupations radiology technicians, phlebotomists, nurse technicians, and others— are a significant and rapidly growing category of relatively well remunerated, middle-skill employment Significant stratum of middle-skill jobs combining specific vocational skills with foundational middle-skills levels of literacy, numeracy, adaptability, problem solving, and common sense will persist in coming decades The issue is not that middle-class workers are doomed by automation and technology, but instead that human capital investment must be at the heart of any long-term strategy for producing skills that are complemented by rather than substituted for by technological change 47 percent of total US employment is at risk The wave of automation will be followed by a subsequent slowdown in computers for labour substitution, due to persisting inhibiting engineering bottlenecks to computerisation even with recent technological developments, allowing for more sophisticated pattern recognition, human labour will still have a comparative advantage in tasks requiring more complex perception and manipulation Yet with incremental technological improvements, the comparative advantage of human labour in perception and manipulation tasks could eventually diminish The findings suggest that Big Data will have an impact on the future role of accounting professionals Therefore, this study proposes that Big Data topics be embedded in existing courses across accounting curricula to prepare twenty-firstcentury accounting professionals with skills related to Big Data analytics The authors' findings indicate that practitioners who can convincingly harness or communicate social influence, champion the effort, and enhance the perception of the technology's efficacy with a perception that facilitating conditions exist, will build more support for CM 83 Henry et al A Survey of Perspectives on the Future of the Accounting Profession 2015 United States The authors studies differing prognostications on the state and direction of the accounting profession Literature review Herbert et al The future of professional work: will you be replaced, or will you be sitting next to a robot? 2016 United Kingdom Interview Kim et al The rise of technological unemployment and its implications on the future macroeconomic landscape 2017 United Kingdom This article explores the often overlapping concepts of work automation and robotic technology before considering the possibilities for transforming the way professional work might be carried out in future This paper aims to track the relative quantities of jobs that are either susceptible or non-susceptible to computerization in the future Kokina et al The Emergence of Artificial Intelligence: How Automation is changing Auditing 2017 United States This paper is motivated by the need to explore deeply the use of Artificial Intelligence in accounting Literature review Quantitative research Accountants will be expected to serve as advisors and participate more in decisionmaking Accountants will pursue more education and specialization as firms seek more ways to evaluate the qualification of workers Firms will continue to struggle to recruit and retain staff, who will opt for more flexible and transient work arrangements Firms will seek to develop practice niches, such as forensic accounting, to increase profit margins; this may lead to further consolidation Competition to provide accounting services will increase from outside of traditional providers Despite the many expected changes, trust will remain the hallmark of the accounting profession For management accountants, there is a risk that many present jobs will be eliminated unless they can create new ways of leveraging the new data rich environment that is rapidly enabling a new approach to management information control and decision-making Technological progress in recent years has negatively affected employment to a greater degree than ever before Government intervention and policy changes could help to reduce the impact of technological advancement and an appreciable proportion of total future employment will consist of new occupations that will provide employment opportunities for humans Senior accountants in large firms uniformly argue that the need for human accountants will not go away anytime soon But many argue that the skills for successful accounting and auditing are likely to be different in the future, and some admit that they will need substantially fewer entry-level accountants in coming years At least over the next couple of decades, accounting is one of the many business fields that is likely to be augmented by technology rather than fully automated 84 Liu et al Big Questions in AIS Research: Measurement, Information Processing, Data Analysis, and Reporting 2014 United States This editorial poses and explores big questions that emerge from the five aforementioned attributes of accounting Literature review Marcello et al The Future of Auditing: roundtable discussion A 2017 United States Interview Moudud-Ul-Huq, Syed The Role of Artificial Intelligence in the Development of Accounting Systems: A Review 2014 This paper examines the state of the auditing profession Has the profession met the expectations of the user community? How will technology transform the practice of auditing? What skills will future auditors need, and how will tomorrow's auditors be trained, selected, and prepared for the profession? The study analyses the relative impact of AI on two different types of accounting works—auditing and tax Accounting tasks involve a wide range of structured, semistructured and unstructured decisions Omar Artificial decision-making and artificial ethics: A management concern 1993 Netherlands This papers addresses three basic reasons for ethical concern when using the currently available expert systems in a decision-making capacity Literature review Oschinski et al Future Shock? The Impact of Automation on Canada’s Labour Market 2017 Canada This article assesses the impact of technological change on Canada’s labour market over the past 30 years and Literature review Literature review The locus and method of data capture, variables being collected, analytic information being incorporated, and frequency of reporting will undergo paradigmatic change, thus altering the method of business measurement The pace and adoption of these changes in external reporting is unpredictable due, primarily, to the rigidity of regulatory mechanisms and the strong aversion to usable accountability and disclosure by organizations The application of sophisticated data analysis technologies will bring great efficiency and support to accounting work, and render some traditional procedures obsolete Accountants will be able to expand service scope from financial to nonfinancial process measurement by using emerging data analysis technologies The implementation of exploratory and predictive data analysis approaches will bring fundamental changes to the work of the accountant as well Reporting will change by benefiting from big data, machine-to-machine communications, emerging analytic tools, and an increasing symbiosis between man and machine One of the professionals from the roundtable discussion believes that accountants and auditors need to be careful when using Artificial Intelligence According to this respondent, human intelligence exceeds machine learning The professional is sceptical about the use of Artificial Intelligence and does not trust machine learning concerning the decision-making The discussion indicates an impact on factors that ultimately improve productivity In aggregate, it indicates that expert systems are found to allow the user substantial control of search for solutions and discretion on whether to follow system recommendations, increased access to top management, and a decrease in the need for supervision Since expert systems with artificial ethics are not a fact of life, the responsibility for decision-making should not be completely abdicated to expert systems Managers should not abandon their responsibility for evaluating and rejecting the advice or conclusion of expert systems No evidence of an imminent threat of massive unemployment due to automation was found The automation of job tasks is part of the natural process of 85 highlights its implications for the near future Özdoğan The Future of Accounting Profession in an Era of Start-Ups 2017 United Kingdom The predictions of the future of the accounting profession are shared by taking into account the technologies that are being used in today, reflections of these into business and effects on the accounting sector Two surveys Parham et al Accounting majors’ perceptions of future career skills: an exploratory analysis 2012 United States This study examines the opinions of 205 students to determine what skills they deem to be important for their future careers The study then compares the opinions of accounting students against other Survey Rattunde, E S., Segura, J III & Wallace, S Technological change and job polarization: the Wisconsin experience 2016 United States business disciplines This study examines the impact of automation on the composition of occupational employment for the United States, Wisconsin and Central Wisconsin Specifically, the paper analyzes how computer-based technologies and robotics have contributed to job polarization by reducing the number of "middle-skilled" jobs while bolstering employment in both low-and-high skilled jobs Literature review technological innovation and a necessary engine of economic growth Labour market trends show a gradual shift in the skills level demanded, but new technology does not simply make people redundant; rather, it reduces the labour required for a given level of production This means that more of the same goods can be produced or people can be redeployed in areas that otherwise might not have been developed This process, already underway, can be moderated by policy that encourages collaboration between public and private institutions to ensure workers have the necessary skills for a technologically uncertain future Those whose qualifications are no longer in demand should be helped to gain the qualifications they need for new employment It has been predicted that technology-based accounting start-ups with both accounting professionals and entrepreneurs having an expertise on information technologies will come together and will increase in the future, and cloud-based accounting initiatives will shape the future of the profession The results of the study are mixed for the accounting profession Many of the skills accounting majors ranked as important for their future were not surprising However, there was some indication that accounting majors may be suffering from a “silo effect” and are not able to fully grasp how skills learned in other university courses impact their professional success The current pace and scope of technological change implies a need for workers at all skill levels to update their skills throughout their working years Unfortunately, the United States badly trails other developed economies in providing opportunities for job retraining As the capabilities of machines encroach on more abstract tasks, higher-skilled workers may find the need to update their skills as well 86 Sangster, A The adoption of IT management accounting: expert systems experience in the 1994 United Kingdom This article considers why, despite forecasts to the contrary and in spite of being apparently well-suited to the technology, management accounting-based expert system developments appear to be virtually non-existent Survey Silverman, W The Economic and Social Effects of Automation in an Organization 1966 United States The paper studies the economic and social effects of automation Literature review & Case study Sorgner, A The Automation of Jobs: A Threat for Employment or a Source of New Entrepreneurial Opportunities? 2017 Russia This paper investigates the relationship between the risk posed by the automation of jobs and individual-level occupational mobility It provides an overview of current trends and developments on the labour markets due to the automation of jobs It also describes the most recent dynamics of self-employment and relates it to the risk of the automation of jobs Survey Tuzhilin IT-Driven Automation: The Next Wave 2004 United States This article claims that the next waive of automation will affect not only routine production workers, but also what Reich calls symbolicanalytic workers Survey Wilson et al The automation of accounting practice 1992 United Kingdom This article examines the use of computer technology by the UK accounting profession and why the accounting profession should be aware about automation Survey The findings suggest that management accountants may lack both awareness of the term and understanding of the nature of expert systems and that they generally not believe that software can be trusted to make their job easier and improve the consistency of their decisionmaking It is concluded that a major educational initiative may be required if there is to be any likelihood of a significant change from the current position Automation usually reduces employment in organizations in which it is introduced The number of jobs that are lost depends on the demand for the product or service produced by the organization The people who are most likely to lose their jobs are young female clerks Automation destroys old skills but at the same time creates new skills requiring operation of the more complex machinery Automation has both favourable and unfavourable effects on jobs quality The results suggest that the expected occupational changes such as losing a job, demotion at one’s current place of employment, or starting a job in a new field are likely to be driven by the high occupationspecific risk of automation However, the switch to selfemployment, both with and without employees, is more likely to occur from paid employment in occupations with a low risk of automation Hence, the rising level of entrepreneurial activities is less likely due to jobs becoming obsolete over the course of automation, but rather due to the high number of opportunities offered by the digital age Jobs including repeated, stabile and structured tasks, have been reduced dramatically since many years This article argued that technology will be developed and have a significant impact in the economy in the next 10-15 years The improvement in technology will have a positive effect leading to an increase in productivity and more job satisfaction In another hand, the labour market will change and needs to be managed properly The political and social issue should be solved before the automation affects the market The results also show that computer use differs from working environment but not from organizational size The development of the software will obviously increase the automation of the accounting and could have a big impact on the accounting profession 87 Zarowin CPA 2000: What's ahead for accounting software 1994 United States The purpose of this article is to study the impact of the computer revolution in the accounting profession Interview Most CPAs use computers simply to automate routine tasks That’s about to change, and the accounting profession is about is about to change too The change that will affect accountants immediately is increased user-friendliness The Software of the future will have more than context-sensitive help screens; will have built-in voice and video aids Most of tomorrow’s software will be designed to follow the user’s logic and intuitiveness Because computers will be easier to use, accountants will find them more effective Accountants shouldn’t worry that computers will make them obsolete Computer can’t think, they can’t perform accountants’ most valuable functions: interpreting and analysing financial information, legal developments or marketing trends and presenting the analyses to the decision makers 88 Annex 3: Interview guideline General questions • What is your current job title? • Since how long you work in the company? • Since how long you work as an accountant? Questions about automation • Do you use automation in your company? o If so, for how long is automation being used in your company? • Did you receive training in working with automation? o If so, how did that training look like o If not, you think it would have been helpful/necessary and how would that training would have looked like? • For which tasks you use automation? And why? • What are the main reasons for using automation? • Which tasks you believe are more difficult to automate? • Is it a realistic prediction to say that automation will compliment employees in their work tasks rather than replace them entirely? If so why or why not? • Do you believe the accounting industry is more likely to have technological unemployment than any other industry? • In your opinion, what will be the implications of automation in the accounting profession for the future? • What you believe is the main limitation of automation? Qualitative characteristics • Do you think that automation can provide useful financial information required by the qualitative characteristics of the Conceptual framework? (relevant, represented faithfully, comparable, verifiable, timely and understandable) • Which aspects of the qualitative characteristics you think automation can better? (than human intelligence) and which characteristics can automation not better? • Do you believe that automation reduces the risk of errors? 89 Skills of the accountant • What skills you believe the accountant possesses that cannot be done by automation? o Why? • Do you think accountant will have to develop their skills to remain important? o If so, what skills need to be more developed? • What are your thoughts on changing university courses so that accounting students learn to work with automation? o In your opinion, to what extent does automation needs to be taught at university? Small accounting firms • Do you think small companies are more likely to technological unemployment? • • Do you think small accounting firms will have difficulties to remain competitive due to the high investing cost of automation? o If so, what can they about this? 90 Annex 4: Confidentiality agreement PERMISSION I declare that the content of this Master’s Dissertation may be consulted and/or reproduced, provided that the source is referenced Name student: Mélanie Simon Signature: 91 ... Financial Accounting GDPR General Data Protection Regulation IASB International Accounting Standards Board IBM International Business Machines IFRS International Financial Reporting Standards... preparation, auditing and analysis of accounts Accountants prepare annual reports and financial statements for planning and decision-making and advise on tax laws and investment opportunities (Business. .. the International Accounting Standards Boards (IASB) to guide and harmonize the accounting practices The IASB develops and approves International Financial Reporting Standards (IFRS), a set of international