Artificial Intelligence for Audit, Forensic Accounting, and Valuation

CHAPTER 4Rise of Machine Learning

ACCOUNTANTS UNDERSTAND AND SPEAK the language of business. Becoming an accountant is not a trivial undertaking. Through their training and education, they acquire the ability to abstract all the activities of a business to a higher dimension and then provide a measure of the business's performance at any given time. That ability to abstract and translate business activities into accounting frameworks requires years of sophisticated training. One has to understand the business context, observe the activity, determine if it is accounting worthy, abstract the key features of the transaction, cull out the recordable elements, and then record the transaction in the right buckets. The cognitive tasks of doing these steps are complex. Yet, experts are forecasting that most, if not all, of the accounting process will be automated. Many projects are underway to do just that. The optimism about the ability to achieve that automation is driven by the recent developments in machine learning. As previously stated, machine learning is a branch of artificial intelligence.

POWER OF PATTERNS

Point to a toy car and ask a child what is it that you are pointing to and it is likely that the child will respond “a car.” The child never sat in the toy car. She never went in that car for a drive. But she calls it a car anyway. In her mind the toy car carries some properties of a real car and therefore it is a car.

Nature's strategy for achieving complexity from simplicity ...