Connect with us

Accounting

The CFO’s role in navigating gen AI transformation

Published

on

Artificial intelligence, and generative AI in particular, catapulted onto the scene at lightning speed in November 2022. And today, 250 years after the first industrial revolution, experts believe we have entered the next (some say fourth, others fifth) industrial revolution as the latest advancements in automation and artificial intelligence (AI) are transforming industries and societies. This current industrial revolution is set to be one where humans and AI-powered technology will work hand in hand. 

In many ways, the effective adoption of AI, specifically gen AI, both in finance and across an entire organization, rests with each company’s chief financial officer. This has placed the CFO into the driver’s seat and at the forefront of company strategy. It is now within the CFO’s power to decide where to allocate resources and how to effectively integrate AI into their company’s daily activities. By striking the right balance between risks and growth opportunities, CFOs can navigate and manage genAI transformation, maximize returns from AI investment, and create value for organizations both large and small. 

The transformation pressure for CFO’s is firmly in place. And navigating and managing this transformation, both digital transformation and AI/GenAI, are the top two trends at the top of minds for CFOs and finance leaders, according to a December 2023 poll of the AICPA-CIMA Future of Finance Leadership Advisory Group. In addition to the focus on digital transformation and AI/gen AI, it is important to focus on the third-noted top issue of ‘Need for upskilling and reskilling.” The need for new skills like storytelling, data analytics, collaboration and strategic thinking are essential to elevate and accelerate finance and accounting teams to keep pace through these transformations.

I recently hosted a gen AI panel at the North America Finance Executives Summit, and along with two members of our AICPA-CIMA Future of Finance Leadership Advisory Group — Rachael Crump, chief accounting officer of Insight Enterprises, and Claire Bramely, CFO of Teradata Corp. — we addressed common misconceptions and barriers about AI, and shared AI implementation guidelines for CFOs and finance leaders to follow to ensure and enhance team efficiency, productivity, and accuracy. 

“While broadly being led by finance, it’s important for gen AI implementation to be a collaborative process. Ideas from [all over the organization] are important and keep the conversation on ways to implement open,” noted Insight’s Crump.

Key guidelines for CFOs to follow when implementing gen AI:

  1. Start small and start now: There’s a strong consensus among finance leaders on the need to initiate gen AI projects on a small scale. This approach allows for manageable experimentation and learning, reducing risk while gaining valuable insights. The repeated advice is to “just start” and “start somewhere,” emphasizing the urgency of engaging with gen AI without being overwhelmed by its scope.
  1. Prioritize data security and intellectual property protection: Security and protection of intellectual property are critical considerations. Ensuring that information is safeguarded while exploring gen AI capabilities is paramount to maintaining trust and compliance.
  1. Learn from others: The importance of learning from the experiences of others before diving in too deeply cannot be overlooked. This can help avoid common pitfalls and leverage best practices for more effective implementation.
  1. Build a roadmap and plan strategically: Developing a clear plan and roadmap for gen AI integration is essential. This includes organizing data, aligning initiatives across the organization, and focusing on areas where gen AI can deliver immediate value.
  1. Evolutionary, not revolutionary: Adopting an evolutionary approach to gen AI is advised. Move forward with incremental changes rather than attempting an overnight transformation. This method supports sustainable progress and allows for adjustments based on lessons learned.
  1. Finance as a key leader in gen AI implementation: The CFO and finance team should play a leading role in the adoption and governance of gen AI, leveraging its unique position to drive process improvements and analytical enhancements.
  1. Addressing skepticism and building support: Winning hearts and minds across the organization is crucial for successful gen AI initiatives. This involves addressing skepticism, demonstrating value, and ensuring there is a common understanding of gen AI’s benefits and objectives.
  1. Navigating through disillusionment: Prepare for questions about managing expectations and navigating through potential disillusionment with gen AI. The key is to maintain open dialogue, adjust strategies as needed, and keep focused on long-term goals.
  1. Emphasizing data quality and trusted AI: The quality of data and the trustworthiness of AI systems are foundational. Emphasizing trusted, safe AI practices and ensuring high-quality data inputs are essential for reliable and effective outcomes.
  1. Experimentation and value focus: Encouraging experimentation and focusing on use cases that offer tangible value are effective and recommended strategies. Starting with pilot projects can help demonstrate gen AI’s potential and build momentum for broader adoption.
  1. Engagement and involvement: There is a call to “get more involved” and to “just try it” that reflects a proactive stance towards gen AI, suggesting that hands-on engagement is key to understanding and leveraging this technology effectively.

When navigating gen AI-driven transformation within your organization, Teradata’s Bramley emphasized that, “It’s important to remember that the role of gen AI is a journey. Be evolutionary rather than revolutionary. This start-small, functional focus approach will ensure you gain value from your implementation.”  

The inevitability and transformative potential of generative AI in finance is unquestioned and advocating for a strategic, informed, and cautious approach to its adoption is key to success. For the CFOs driving AI strategy and implementation starting small, focusing on security, planning strategically, and building organizational support are essential steps toward harnessing Gen AI’s capabilities while navigating its challenges and opportunities.

Continue Reading

Accounting

House passes tax administration bills

Published

on

The House unanimously passed four bipartisan bills Tuesday concerning taxes and the Internal Revenue Service that were all endorsed this week by the American Institute of CPAs, and passed two others as well.

  • H.R. 1152, the Electronic Filing and Payment Fairness Act, sponsored by Rep. Darin LaHood, R-Illinois, Suzan Delbene, D-Washington, Randy Feenstra, R-Iowa, Brad Schneider, D-Illinois, Brian Fitzpatrick, R-Pennsylvania and Jimmy Panetta, D-California. The bill would apply the “mailbox rule” to electronically submitted tax returns and payments to allow the IRS to record payments and documents submitted to the IRS electronically on the day the payments or documents are submitted instead of when they are received or reviewed at a later date. The AICPA believes this would offer clarity and simplification to the payment and document submission process while protecting taxpayers from undue penalties.
  • H.R. 998, the Internal Revenue Service Math and Taxpayer Help Act, sponsored by Rep. Randy Feenstra, R-Iowa, and Brad Schneider, D-Illinois, which would require notices describing a mathematical or clerical error to be made in plain language, and require the Treasury to provide additional procedures for requesting an abatement of a math or clerical error adjustment, including by telephone or in person, among other provisions.
  • H.R. 517, the Filing Relief for Natural Disasters Act, sponsored by Rep. David Kustoff, R-Tennessee, and Judy Chu, D-California. The process of receiving tax relief from the IRS following a natural disaster typically must follow a federal disaster declaration, which can often come weeks after a state disaster declaration. The bill would provide the IRS with authority to grant tax relief once the governor of a state declares either a disaster or a state of emergency and expand the mandatory federal filing extension under Section 7508(d) of the Tax Code from 60 days to 120 days, providing taxpayers with more time to file tax returns after a disaster.
  • H.R. 1491, the Disaster related Extension of Deadlines Act, sponsored by Rep. Gregory Murphy, R-North Carolina, and Jimmy Panetta, D-California, would extend the amount of time disaster victims would have to file for a tax refund or credit (i.e., the lookback period) by the amount of time afforded pursuant to a disaster relief postponement period for taxpayers affected by major disasters. This legislative solution would place taxpayers on equal footing as taxpayers not impacted by major disasters and would afford greater clarity and certainty to taxpayers and tax practitioners regarding this lookback period.

“The AICPA has long supported these proposals and will continue to work to advance comprehensive legislation that enhances IRS operations and improves the taxpayer experience,” said Melanie Lauridsen, vice president of tax policy and advocacy for the AICPA, in a statement Tuesday. “We are pleased to work closely with each of these Representatives on common-sense reforms that will benefit taxpayers, tax practitioners and tax administration and we’re encouraged by their passage in the House. We look forward to continuing to work with Congress to improve the taxpayer experience.”

The bills were also included in a recent Senate discussion draft aimed at improving tax administration at the IRS that are strongly supported by the AICPA.

The House also passed two other tax-related bills Tuesday that weren’t endorsed in the recent AICPA letter. 

  • H.R. 1155, Recovery of Stolen Checks Act, sponsored by Rep. Nicole Malliotakis, R-New York, would require the IRS to create a process for taxpayers to request a replacement via direct deposit for a stolen paper check. If a check is determined to be stolen or lost, and not cashed, a taxpayer will receive a replacement check once the original check is cancelled, but many taxpayers are having their replacement checks stolen as well. Taxpayers who have a check stolen are then unable to request that the replacement check be sent via direct deposit. The bill would require the Treasury to establish processes and procedures under which taxpayers, who are otherwise eligible to receive an amount by paper check in replacement of a lost or stolen paper check, may elect to receive such amount by direct deposit.
  • H.R. 997, National Taxpayer Advocate Enhancement Act, sponsored by Rep. Randy Feenstra, R-Iowa, would prevent IRS interference with National Taxpayer Advocate personnel by granting the NTA responsibility for its attorneys. In advocating for taxpayer rights, the National Taxpayer Advocate often requires independent legal advice. But currently, the staff members hired by the National Taxpayer Advocate are accountable to internal IRS counsel, not the Taxpayer Advocate, creating a potential conflict of interest to the detriment of taxpayers. The bill would authorize the National Taxpayer Advocate to hire attorneys who report directly to her, helping establish independence from the IRS. 

House  Ways and Means Committee Chairman Jason Smith, R-Missouri, applauded the bipartisan House passage of the various bills, which had been unanimously passed by the committee.

“President Trump was elected on the promise of finally making the government work better for working people,” Smith said in a statement Tuesday. “This bipartisan legislation helps fulfill that mandate and makes improvements to tax administration that will make it easier for the American people to file their taxes. Those who are rebuilding after a natural disaster particularly need help filing taxes, which is why this set of bills lightens the load for taxpayers in communities struck by a hurricane, tornado or some other disaster. With Tax Day just a few days away, we must look for common-sense, bipartisan ways to make filing taxes less of a hassle.”

Continue Reading

Accounting

In the blogs: Many hats

Published

on

Teaching fraud; easement settlement offers; new blog on the block; and other highlights from our favorite tax bloggers.

Many hats

  • Taxbuzz (https://www.taxbuzz.com/blog): There’s sure an “I” in this “teamwork:” What to know about potential IRS and ICE collaboration.
  • Tax Vox (https://www.taxpolicycenter.org/taxvox): How IRS data would likely be unhelpful validating SNAP eligibility.
  • Yeo & Yeo (https://www.yeoandyeo.com/resources): How financial benchmarking (including involving taxes) can help business clients see trends, pinpoint areas for improvement and forecast future performance.
  • Integritas3 (https://www.integritas3.com/blog): One way to take a bite out of crime, according to this instructor blogger: Teach grad students how to detect, investigate and prevent financial fraud.
  • HBK (https://hbkcpa.com/insights/): Verifying income, fairly distributing property, digging the soon-to-be-ex’s assets out of the back of the dark, dark closet: How forensic accounting has emerged as a crucial element in divorces.

Standing out

Genuine intelligence

  • AICPA & CIMA Insights (https://www.aicpa-cima.com/blog): How artificial intelligence and other tech is “Reshaping Finance,” according to this podcast. Didem Un Ates, CEO of a U.K.-based company offering AI advisory services, tackles the topic.
  • Taxjar (https:/www.taxjar.com/resources/blog): How AI and automation can help even the knottiest sales tax obligations and problems.
  • Dean Dorton (https://deandorton.com/insights/): Favorite opening of the week: “The madness doesn’t just happen on college basketball courts — it also happens when your finance team is stuck using a legacy on-premises accounting system.”
  • Canopy (https://www.getcanopy.com/blog): Top client portals for accounting firms in 2025.
  • Mauled Again (https://mauledagain.blogspot.com/): Despite what Facebook claims, dependents have to be human.

New to us

  • Berkowitz Pollack Brant (https://www.bpbcpa.com/articles-press-releases/): This Florida firm offers a variety of services to many industries and has a good, wide-ranging blog. Recent topics include the BE-10, nexus and state and local tax obligations, IRS cuts and what to know about the possible bonus depreciation phase out. Welcome!

Continue Reading

Accounting

Is gen AI really a SOX gamechanger?

Published

on


By streamlining tasks such as risk assessment, control testing, and reporting, gen AI has the potential to increase efficiency across the entire SOX lifecycle.

Continue Reading

Trending