Accounting
Managing expectations key to AI implementation for CAS
AI implementation at a CAS practice is hard enough, but it becomes even more so when people don’t fully understand what AI can and cannot do.
Speaking during the Information Technology Alliance’s spring collaborative in Memphis, Tennessee, Jessica Barnas, the partner leading the finance and accounting solutions advisory group for top 25 firm Wipfli, lamented that public discourse around AI has given people the impression it’s some sort of magic wand that can fix anything, which then leads to unrealistic expectations around its capabilities.
“I talked to a lot of clients, I think they think that AI is like an elf that jumps out of the box and does things magically. They just say, ‘Can’t AI do that?’ I even had one of our partners [tell me this recently], we’re working on a five year revenue prediction—he said, ‘Well, can’t you just upload that to Copilot and have it spin up the business plan and everything?’ and I’m like, ‘Do you have any idea how generative AI works? It doesn’t do that.’ But I think that there’s just this misconception [that], oh, technology it is just this magic wand that’s going to make all of my accounting problems disappear,” Barnas said.
Chris Gallo, director of outsourced business accounting services with Kansas-based firm Creative Planning and another one of the panelists, made a similar point, saying that it’s important to be realistic about what technology can do. While it can do a lot, he echoed Barnas in saying that some people seem to think it is magic.
“If we believed everything that everybody told us you would be flying around in flying cars right now. I think we need to kind of take it with a grain of salt at some point. Because why wouldn’t we just say ‘ChatGPT build me a flying car,’ and then the bot people that you know Tesla’s building will just go do that. Right? It becomes a little bit ridiculous at some point too… There’s a lot of expectation, or unaligned expectations,” said Gallo.
Misconceptions about AI capabilities also serve to drive fear on the part of accountants. Barnas said that a big part of the change management process when it comes to implementing AI is allaying fears from staff that they’re not going to fire everyone and replace them with bots. While there have been major improvements in AI over the years, she does not believe it is in the position to wholesale replace human accountants just yet. Instead, it has become a great way to augment those humans and make them more competitive against the humans who are not using AI.
“They think ‘AI will eliminate my job!’ So we talk about our philosophy. We’re looking to adopt these tools to help you get bigger and better and embrace the advisory role, but the only way AI will replace you is if a person using AI will replace you. You need to give that level of comfort to your teams so that everyone knows we’re just trying to get better, we’re just picking up new tools, this is not a replacement for you,” Barnas said.
There is a similar fear when it comes to billable hours, also explored in another panel (
“Okay, I took this process down from seven hours to half hour every week. Now what? Teach me how to do advisory. Because being a CFO, doing modeling and projections, it is not something [you learn] from reading a book or sitting in on one webinar. We would all be doing that if that were the case. So how can we train our teams on what to do next? All of that is involved in change management: being a guide and providing the safety for each step,” she said.
Gregg Landers, the last panelist and managing director of client accounting and advisory services and internal control services with Top 10 firm CBIZ, talked about how a lot of the misunderstandings and misconceptions regarding AI can be allayed from people just experimenting with it themselves, which not only lets them get a better impression of its current capabilities but will train them in using those capabilities to their fullest potential.
“I’ve been encouraging some of my teams to use their personal generative AI a little Black Mirror-like, [where you] keep talking to it, and it talks back. You get accustomed to how to give a context, how to get better answers. Sometimes, if you’re nice to it, [you get] a tighter answer than if you’re not. So experiment around with it.
He gave an example from his own life, where he needed to learn more about digital services taxes. Through an extended conversation with an LLM he was able to understand what the DST is and how it works and how accountants manage it. He was able to get good outputs from the model, though, because previous experience taught him that he needs to provide more context and information for a decent answer, because these models can get tripped up by ambiguities. He compared it to a fortune cookie that could be interrupted in many ways, people should be clear and concise when prompting AIs.
“We’ve become a society of fortune cookies. I may ask ‘how is that project going’ and you tell me ‘it’s going good’ but what I mean is ‘is it on time?’ and what you might mean is ‘I had this hiccup that put me two weeks behind but now it is resolved so it is good.’ We can’t have fortune cookies when interacting with generative AI. You need clear, concise, contextual communication,” he said.
When it comes to AI in accounting, the future is already here but not everyone seems to have noticed.
Deloitte is moving its North American headquarters to Hudson Yards in New York City.
The Big Four Firm committed to 800,000 square feet of the 1.1 million-square-foot tower known as 70 Hudson Yards, the
Related Companies, the real estate developer behind the more-than 60-floor tower, reportedly reached an agreement with Deloitte before construction even began, which is slated for June.
Related Companies and Oxford Properties Group, the codeveloper of Hudson Yards, declined to comment. Deloitte did not immediately respond to a request for comment.
KPMG is also planning to
KPMG currently leases approximately 800,000 square feet at 345 Park Avenue, where its worldwide headquarters are located, as well as 560 Lexington avenue and 1350 Sixth Avenue. In its relocated headquarters, it will occupy approximately 450,000 square feet across 12 floors in the new 58-story Two Manhattan West building, which finished construction in January 2024.
The Committee of Sponsoring Organizations of the Treadway Commission, in collaboration with the Association of Certified Fraud Examiners, have introduced the
The new certification, offered through the Institute of Internal Auditors and the Institute of Management Accountants in addition to the ACFE, aims to help professionals enhance their expertise in fraud risk management. COSO is jointly sponsored by the IIA and the IMA, along with the American Accounting Association, the American Institute of CPAs and Financial Executives International.
Alex/Getty Images/iStockphoto
The certificate program builds on the Fraud Risk Management Guide that COSO first introduced in 2016 and expanded in 2023, to provide a more comprehensive approach to identifying, assessing and mitigating fraud risks. The second edition of the guide outlines five key principles organizations should follow to establish an effective fraud risk management program.
The COSO Fraud Risk Management Certificate gives participants the necessary skills to implement a robust fraud risk management framework based on COSO principles. The program includes self-paced learning modules, and a certifying exam. Upon successful completion, participants will earn an official COSO Fraud Risk Guide Certificate and Digital Badge, demonstrating their proficiency in fraud deterrence and management.
“Managing fraud risk is a challenge for organizations of all sizes,” said COSO executive director and chair Lucia Wind in a statement Wednesday. “This program provides professionals with the knowledge and tools needed to build strong anti-fraud controls, risk assessments and programs, ultimately strengthening organizational resilience and fostering a culture of integrity.”
The certification program includes practical strategies for implementing COSO’s fraud risk management framework; best practices for fraud deterrence, detection and response; integration of fraud risk management with internal controls and data analytics; plus case studies and real-world applications.
“In continuing our partnership with COSO our organizations form a united front against fraud,” said ACFE president John Gill in a statement. “The ACFE is pleased to join forces once again to develop this new certificate that will assist professionals in navigating fraud risks, as well as continue guiding organizations in establishing a comprehensive and effective fraud risk management program.”
Separately, the ACFE recently released the
Accounting firms are among the groups with fraud experts who assist clients. “I have several fraud projects going on right now,” Brian Lafountain, a partner at The Bonadio Group in Pittsford, New York, told Accounting Today. “The thing that I’m running into in most of my jobs is a lack of adequate policies and procedures being in place. The key thing is the controls that are built into the policies and procedures, which are approvals, authorizations, reconciliations. As you’re going through the procedures or whatever your daily operational responsibilities are, there’s things that need to be built in to identify or to raise a flag when something is off or something doesn’t reconcile, or a prompt that you can’t go further in the process until you get somebody’s approval.”
He has recently been working on a project for a local municipality in which an employee has allegedly misappropriated funds. “I believe she purposely keeps no documentation, so that makes it very difficult for us when we come back and try to recreate events, to try to confirm that money is missing because there’s no source documentation,” he said. “She takes tax payments from local vendors or local residents, or she issues building permits and things of that nature. … They come in and they pay that, and she doesn’t ever give them a receipt.”
The lack of receipts or a cash log can make it difficult to accumulate the evidence. “We see a lot of that, honestly, a lack of documentation, a lack of documented policies and procedures, things of that nature, and a lack of internal control that severely increases the risk of something nefarious happening,” said Lafountain. “If you don’t have controls in place to monitor these things, then it can perpetuate itself and keep going on through months and months at a time before it’s ever caught. The vast majority of the frauds that we catch, we catch via a whistleblower of some sort. It’s a tip that comes in, whether it’s an email tip or a phone call, whatever it is.”
The Bonadio Group offers a toll-free fraud and abuse hotline that it sells to its clients. “The messages come directly to my group here at Bonadio, and we have a staff of Certified Fraud Examiners who answer that phone and document the allegations,” said Lafountain. “It’s all anonymous, so the organization is not involved. We prepare a report of what the allegations are, and then we send it back to the organization so that they can follow up on it.”
He noted that in the latest ACFE occupational fraud report, the
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