AI Can Replace Accounting Work But Not Judgement

Take AI Outputs with a Dose of Skepticism

Recently, I asked two different AI services the same accounting question about whether to net or present both revenue and expense for a payment we made in full that was later split by the partner upon repayment. They reached different conclusions. One was right and one was wrong. Both responses were detailed, well reasoned, and confident.  

This is the moment many finance teams are reaching. AI is very good at producing plausible answers at scale. It is not good at resolving ambiguity or owning outcomes. Someone still has to decide which answer makes sense in the context of the business.

AI doesn’t let you off the hook. You need to trust the output, but you also need skepticism. It requires the right skills and processes to review AI-generated work while still leveraging the benefits. Ultimately, it comes down to ensuring your team asks the right questions.

It’s easy to take things that sound reasonable at face value but that can lead to significant risk. 

From Processing Transactions to Applying Judgment

Historically, a lot of accounting effort went into processing transactions. Automation addressed a good bit of that work, and now AI is able to address even more. 

What replaces it is deciding where human judgment is required. AI increases the risk and frequency of error, even when outputs look well reasoned. These aren’t systems questions. They’re governance decisions that require experienced accountants with business context. 

What we often forget is that AI lacks context, unless a human provides it. It isn’t talking to the business. It doesn’t understand historical nuance or intent. It’s responding to a prompt using patterns in its training data. Humans still need to provide the context and judgment. 

The question many of us are now working through is how to use AI effectively without increasing risk. Here are a few suggestions: 

1. Use AI to execute and prepare, not to decide. AI is great for a first draft, summarizing information or surfacing options quickly but it shouldn’t replace judgment or an understanding of the business context. 
2. Apply skepticism through controls and governance. AI outputs need the same ownership, review and defined escalation processes we have for any other accounting work. Make sure you have the proper review process in place with the right level of oversight, and the right cadence. 
3. Rethink skills required for new hires.  As automation accelerates the work, certain technical abilities become almost commoditized. Raise the bar on hiring for critical thinking, curiosity and the ability to explain and defend decisions, not just technical proficiency. 

What AI shouldn’t replace is insight. You can outsource tasks, but you shouldn’t outsource your point of view. Judgment around materiality, intent, and business impact still requires human involvement.

The shift underway isn’t really about technology. It’s about ownership. In an automated world, accountants aren’t primarily accountable for producing the answer. We’re accountable for standing behind it.

AI can help us move faster and work more consistently. But it can’t replace judgment, context, or accountability. That is, and will remain, what AI can’t replace in accounting.