October 2021
Artificial Intelligence is set to transform both business and society at large. Here is Narayanan Vaidyanathan explains some of the ethical issues that this brings with it.
Artificial Intelligence (AI) is a subject that often dominates the headlines. The conversation is slowly moving away form the people versus machine debate, as it becomes more and more entrenched in society.
From writing novels and creating adverts to detecting eye diseases and diagnosing dementia in a day, the adoption of AI will significantly increase over this next decade, touching the lives of everyone – citizens, employees and consumers alike.
How is AI relevant to accountancy
AI is relevant to accountancy and finance professionals because it is moving from the experimental stage to adoption at scale over the next decade. It will transform every aspect of our lives. AI presents considerations across all three of the environmental, social and governance (ESG) dimensions.
Managing the transition to mass adoption of AI in an ethical, responsible manner is essential if we are to derive equitably distributed sustainable long-term value from it.
The accountancy profession, with its long-standing commitment to ethical practices, is well-placed to guide organisations along a responsible AI adoption path.
ACCA recently joined forces with the Chartered Accountants Australia and New Zealand (CA ANZ) to highlight the need for effective governance mechanisms to achieve an ethical and sustainable adoption of AI. The global survey with over 5,700 respondents, called ‘Ethics for sustainable AI adoption’, outlines numerous ways in which finance professionals can play their part.
- Set the tone from the top of AI adoption: Some 66% of those asked said leaders in their respective organisations prioritise ethics as highly as generating profits. Accountants should prioritise an AI approach that is consistent with organisational values such as diversity and inclusion (i.e. consider the impact of AI on under-represented groups), fairness (i.e. when using AI for recruitment or surveillance of employees) and transparency (for example, appropriately disclosing AI use to customers).
- Deliver sustainable value: when evaluating the business case for AI, accountants should consider long-term value and alignment with the organisation’s strategy. They should also consider reputational risk from mishandling adoption, and the public interest, in addition to immediate costs. Of those asked, 64% believe that the impact of AI on overall standard of living in society is positive, but only half that proportion (32%) consider its impact on levels of inequality to be positive.
- Exercise professional judgement: AI may create unforeseen situations, so it’s best to avoid over-reliance on simplistic checklist-based approaches which don’t give the full picture or leave room for unintended consequences. ACCA and CA ANZ’s research also found fewer than half (43%) believe the impact of AI on their rights as an individual is positive (for example safety and personal security, levels of fairness, levels of choice, levels of transparency).
- Challenge greenwashing: Accountants are also urged to seek insights from AI tools to aid professional scepticism in examining the organisation’s claims about sustainability, such as on net zero requirements, are matched by its performance; and challenge suspect claims (‘greenwashing’) through this bottom-up view of the data, the preparation of statements and what is eventually reported. Looking ahead, there is an opportunity to leverage AI to a greater extend given that 19% use it for accountancy and finance related tasks or functions (preparing financial statements, management reporting, to inform decision making etc.); 15% outside the accountancy and finance function and 7% in audit and assurance.
- Comply with regulation and ethics policies: Accountants must push for regulatory requirements and AI-specific ethics policies to be set up and enforced. The majority of those using AI have implemented an ethical framework for it in their organisation (72%) and considered the regulatory requirements for doing so (87%). Accountancy and finance professionals will need to continue pushing this priority, despite the challenge that they may not always be direct owners of the AI.
- Prioritise data management: Finance professionals should recognise the fundamental role of data as the raw material that feeds AI; focus on data confidentiality and the improvement of data quality. Three in four report being effective / very effective at managing confidentiality, and two in three at managing data quality. An organisation should ensure confidentiality is maintained even when data is not being actively used or shared.
AI and ethical challenges
The data explosion has reinforced the importance of AI. There is now a wealth of data available, and we now have a processing power to make sense of it – which collectively presents a compelling case for AI.
However, with such a great data and processing power comes great responsibility. These responsibilities falls cross the environmental, social and governance (ESG) spectrum. On the environment, for example, ESG data is relatively unstructured and well suited for AI analysis.
Accountancy and finance professionals should consider new AI solutions as part of their toolkit.
The global accountancy and finance community should be cautions when considering the impact of AI on their rights as individuals, employees, and consumers. AI adoption must consider the needs of all, especially the under-represented and vulnerable in society.
AI is one of the most exciting, transformational technological developments of our time. But technology has the potential both to improve lives and to cause harm. Ultimately, it is the ethical and sustainable adoption of AI that will determine its relevance.
- Narayanan Vaidyanathan is ACCA’s head of business futures.
