In the accounting field, most industry professionals were thrilled to get rid of pen and paper books and go digital, saving time and money. While there are many advantages to having financial records go digital, there are also some drawbacks that many without an accounting background simply overlook. That is the potential for lack of controls in the reporting system that could increase the amount of errors that are present. Accountants now must trust that the technology they are using is correct, as they do not have the time to go through and manually record each transaction. This is also eliminating a whole sector of jobs, with AI being able to digitally bookkeep in a fraction of the time it takes a human to do it. That is thousands of jobs that are being eliminated by technology that can easily make major mistakes.
If poor controls are present, this can possibly lead to the incorrect solutions being provided as AI is only telling you what it believes to be true, even if it is not. Accountants must still check the information that is being provided is correct and accurate. Cybersecurity is another area of concern, where hackers can potentially get in and steal a companies information. Before digital audits, just paper copies were kept, but with the digital world, there must be strong compliance and security to ensure that the financial information is protected and private.Â
While there are many benefits to the digitization of accounting, there are also new problems arising that must be addressed.Â