Unless you've been avoiding the internet for months (smart), you've probably heard about ChatGPT and the rise of artificial intelligence technology. While there is plenty of A.I. technology that has emerged in the past year, ChatGPT has made the biggest splash. It reportedly reached 100 million monthly active users, just two months after its launch according to a study by UBS.

Developed by an artificial intelligence company called OpenAI, ChatGPT is a "language model" that is trained on data from the internet and paired with what OpenAI calls Generative Pre-trained Transformer architecture, which allows it to string together very human-like responses. The technology is also constantly being fine-tuned by human reviewers that provide feedback on the quality of responses.

In practice, ChatGPT functions like a chatbot developed in the Star Trek universe. You can ask it to write essays, jokes, scripts, recipes, code, and more. ChatGPT then takes your prompt and develops a relevant answer in mere seconds—for free. You can feel like Captain Picard querying the U.S.S. Enterprise from the comfort of your computer desk.

While the answers can vary in accuracy—the language model even admits it "may occasionally produce incorrect or nonsensical information," the stunning technology has ruffled the feathers of almost every professional industry that relies on providing expertise, including accounting.

How A.I. May Impact Accounting

Whenever automatic processes like ChatGPT rise in popularity, there is the inevitable question of whether they'll replace human jobs. Some dismiss ChatGPT as a super-powered text auto-complete, while others have declared it the beginning of the end for white-collar jobs, the true answer likely lies somewhere in between.

When asked how it could be used in the accounting field, ChatGPT wrote a 269-word response and listed several examples of areas it could be used:

• Financial Data Analysis
• Tax Planning and Compliance
• Bookkeeping Assistance
• Financial Reporting
• Auditing Support
• Cost Analysis and Budgeting
• Financial Planning and Advisory Services
• Training and Education

As incredible as the technology is, ChatGPT appears closer to a useful, efficiency-boosting tool for accountants, rather than the rise of the robot accounting department. The Journal of Accountancy detailed the story of Byron Patrick, CPA/CITP CGMA, Vice President for Client Success at The B3 Method Institute asking ChatGPT to take a single column of mixed data, including addresses and phone numbers, into a logical spreadsheet.

“I could have probably spent six hours and gotten to something that was 90% right,” Patrick told Journal of Accountancy. “This thing in 15 minutes got me there in a better path than I ever could have imagined." 

While ChatGPT and similar A.I. technology's first function may be crushing tedious clerical work such as sorting spreadsheets, the technology is built to improve over time.

Accounting Today reported this in real-time, ChatGPT 3.5 initially failed an accounting class in a study from Brigham Young University, earning 47% in the class. When ChatGPT 4.0 was put through its paces in a study that covered exams like the CPA, CMA, CIA, and EA it improved by an average of 16.5 percent, averaging a score of 85.1 percent across the exams.

Answering exam questions is still a far cry from the advisory services and complex financial work that accounting firms offer—if we do say so ourselves. As ChatGPT in its current state still provides incorrect or misleading answers with supreme confidence, it'll require the oversight of human expertise to confirm or deny whether its responses are helpful.

But as was the case with calculators, the internet, and the automobile, it's best to embrace and understand the best uses of disruptive technology, rather than ignore and fear inevitable change.

For human guidance on accounting services including attest, tax compliance, advisory and wealth management, and more the friendly and helpful team at MRPR is ready to assist you.