Generative artificial intelligence, or gen AI, is a type of artificial intelligence that can create content, generate insights and even simulate human-like conversations. Gen AI tools like ChatGPT and Microsoft Copilot are transforming the business world and accounting firms.
While the technology offers many benefits, its rapid adoption also creates challenges for firm leaders. We've talked to many firm leaders who think they can simply block these sites at their firms or forbid employees from using them, avoiding the inherent risks. However, this approach is short-sighted and risky. This article explains why and offers a better alternative.
What is gen AI?
Generative AI refers to machine learning models that can produce new data similar to the data they were trained on. These models can create text, images, music and more, making them incredibly versatile tools. You might not realize it, but AI is likely already a part of your everyday activities. Here are some common examples:
- Browsing social media. AI algorithms suggest content tailored to your interests.
- Using digital assistants. Virtual assistants like Siri and Alexa use AI to understand and respond to your commands.
- Online shopping. Websites generate personalized recommendations based on your browsing and purchase history.
- Unlocking your phone. Facial recognition systems utilize AI for secure access.
- Navigational apps. AI optimizes routes and provides real-time traffic updates.
- Editing photos. AI tools enhance and modify images seamlessly.
- Autocorrect and autocomplete. AI improves typing accuracy and speed.
- Playing video games. AI opponents provide dynamic and challenging gameplay.
- Auto-generated playlists. Music-streaming services curate playlists based on your listening habits.
The dangers of gen AI
While there are many benefits to using gen AI, it also brings several risks that firm leaders must address.
- Data protection and privacy. AI systems often require vast amounts of data, raising concerns about how tech companies collect, store and use that data.
- Ethical guidelines. We're still working out how to ensure that AI operates within ethical boundaries to prevent misuse.
- Industry-specific regulations. Because this technology is moving so quickly, accounting and tax-specific regulations haven't yet caught up.
- Data leakage. Protecting sensitive information from unauthorized access and leaks is a top priority. How can you stop employees from copying and pasting sensitive client or firm data into a Generative AI tool?
- Intellectual property protection. AI-generated content can blur the lines of intellectual property rights.
- Bias and discrimination. AI models can inadvertently perpetuate biases present in the training data.
- Fake content and misinformation. Generative AI is prone to "hallucinations" or incorrect or misleading results. It's easy to create realistic fake content without verifying authenticity.
Establishing usage policies and guidelines
Given the potential risks, firm leaders must develop comprehensive AI usage policies.
Proper guidelines help minimize the dangers of AI usage and give employees a reference point for ethical AI use. Trying to prohibit AI tools outright can lead to unauthorized use.
Consider the following findings from Microsoft and LinkedIn's
- 75% of global knowledge workers are using generative AI;
- 78% of AI users are bringing their own AI tools to work (BYOAI); and,
- 52% of people who use AI at work are reluctant to admit using it for their most important tasks.
You don't have to start from scratch — many of your existing data protection and privacy guidelines can be adapted for AI.
If you're wondering where to start, create an exploratory committee to oversee AI implementation. This committee should include a cross-functional group of people from multiple departments and be led by IT. The committee can vet AI tools and opportunities, compare the cost to the potential ROI and establish priorities. This helps ensure a structured approach to implementing and using GenAI.
It's also crucial to train employees, helping them understand how to ethically and responsibly use AI tools. This proactive approach safeguards the firm and empowers your team members to leverage AI's benefits responsibly.
Generative AI offers firms exciting opportunities to accomplish more and free up employees for higher-value work, but it also creates challenges for CPA firms. By developing an AI usage policy, exploring AI tools in your firm and educating your team members on how to use AI responsibly, you can harness the power of AI while minimizing risks. Remember, while the technology is new, you likely established principles of governance, ethics and data protection long ago. Embrace the innovation, but do so cautiously and responsibly.
