Artificial Intelligence and Block chain as Trending Topics in the Financial Market
Discuss about the Evolution of of Artificial Intelligence.
As the Daniel Hood in his article has said, the artificial intelligence and block chain is the one of the most trending topic in the financial in market (Hood, 2018). The machines that operate the same consists of the capability to use the technology and get effective result in no time (Tapscott & Tapscott, 2016). At present the businesses have been influenced by the automation and digitalization this enhances their business process and leads to success (Dogru, Mody & Leonardi, 2018). It has been seen that the accountants working both in the private sector or the public sector has adopted this technology for accurate results. The digitalization has changes the accountant’s perspective, structure and operations of their profession for obtaining a true and fair financial position (Hood, 2018).
The artificial intelligence mechanism is the process in which business operations are operated and demonstrated by the machines (Pannu, 2015). There is a difference between the human intelligence and the artificial intelligence as the behaviour and function of the artificial one can be manipulated and influenced according to the needs of the company. The machines and hi-tech instruments are manufactured for serving the specific use of the company (Hernandez, 2017). The organization in order to achieve their goals efficiently and effectively uses this technique (Hood, 2018). The tasks that the automatic machines can do in more or less no time, it is difficult for a human being to efficiently do the same task within the same time and quality. Moreover there is no labour cost involved in this, thus reducing the cost. Similarly, the block chain refers to as the digital currency which is transaction. New technological trend within the business that use the computer programming language to make the contracts and conduct a systematic transaction (Hofmann, Strewe, & Bosia, 2017).
The technology of block chain is created for the facilitation of the transaction by utilizing the crypto currency or bit coin. The block chain structure is the transaction ledger that records the transaction and its source in the lost known as ‘blocks’(Tapscott & Tapscott, 2016). The parties of the Block chain transaction has been assigned an identifier and is equipped with the technology to encrypt and decrypt the information that is communicated (Cohen & Feigenbaum, 2014) The blocks or the list of transaction is then can be viewed with the help of computer networks that are connected to the block chain. The block chain also facilitates the level of protection against frauds. The records are layered with privacy hence it is totally secured and the various finance data are safe (Hood, 2018).
There is much more than just the bit coin that is involved in the style of block chain technology (Vigna & Casey, 2016). There are many other kinds of crypto currency that is involved in the operations of this technology. The block chain technology in the financial sectors are known as smart contracts as it can effectively verify the transactions beyond the transfer value. The businesses who has adapted the artificial intelligence and block chain has a deep and a broad scope and potentiality (Hood, 2018). This has led to threat to the accountants and the auditors as the digitalized soft wares are capable of doing their jobs more efficiently with less time spent(Chan & Vasarhelyi, 2018). There are many renowned organisations uses the artificial intelligence and the block chain technology for their accounting process that helps them to report the codification item smoothly and the analysis is dome systematically without any hindrance as well as the performance can be evaluated. Various malpractices and fraudulent acts by human can also be avoided in this application. The various routine tasks by the accountants can easily be done by the block chain technology with clarity. However, with the help of block chain the accountants can also get a lot of information and techniques about the process of planning, valuation, record keeping and the optimum utilization of resources (Hood, 2018).
The Concept of Artificial Intelligence and Block chain
The block chain can lead to more and more level of transaction without the involvement of the manual accountant work. The interpretation of the block chain records can lead to a success for the finance based firms and to obtain an economic in interpretation of the records and combining them into economic reality and process of valuation (Lu, et al., 2017). It is a replacement of the book keeping process and reconciliation of the statements by the accountants(Tapscott & Tapscott, 2016). The increase in the trend of the block chain is giving rise to the threats to the accountants to lose their job by replacing the automated hi tech machines in their place. According to Hood, there has been a lot of innovation in the audit and accounting process with the evolution of the block chain and artificial intelligence. In much more easy way the financial status of the company can be ascertained (Bui, et al., 2016). The block chain has changes their work to a great extent. The accountants now just have to operate the machines and get the results. The calculation and evaluation is done automatically there is no need for manual work and involvement of accountants that increase the labour cost of the companies. Only a single capital investment is needed for the installation of the machine and the results can be obtained on a long term basis (Hood, 2018).
If the solution block chain is combined with the data analytics it could help in the assertions of the transactional level that is involved in the process of audit. Accountants who are the experts in the process of record keeping and standards setting can use the systematic process of block chain as an opportunity to provide guidance and influence the company on the way in which the block chain can be used.
In the article by Hood, he has made an advice that the financial systems, in order to innovate and become an integral part needs to develop, standardise and optimise the artificially intelligent machines and the block chain. Although the process is time consuming to adapt the machines and be habituated with the same (Hood, 2018). The block chain must be standardized to cover to overcome all the challenges in the process of accounting. Many accounting department processes can be optimized through block chain and other modern technologies, such as data analytics or machine learning; this will increase the efficiency and value of the accounting function (Tapscott & Tapscott, 2016).
Other tending technologies other than block chain and Artificial Intelligence
Other than block chain Technology of OCR facilitates accountants to translate the paper documents that is scanned, PDF files, or images captured by a digitalized camera into a data that is searchable and editable (Baron, 2017). This type of digitization of record has enhanced streamline the process of archiving by making documents searchable, storable, and transferable (Hood, 2018)Another added benefit to this type of technology is adopted by the accounting firms are process of empowering to be quicker in accounting processes. Andrew Marder from Accounting Web writes that, “OCR is the technology that finally kills the hand-entered receipt…The technology has already made leaps and bounds, but there’s plenty of room for process improvement.”
Conclusion
It can be said that the technological progress can affect the accounting their performance. According to the critical analysis of the article and views of various other scholars in this regard it can be said that it is both a threat and an opportunity for the accounting profession. The various accounting technology is replacing their job which is a thread at the same time the adaptation of the technology has a lot of scope for their enhancement in the field.
References
Baron, J. (2017). Blockchain, accounting and audit: What accountants need to know. Accounting Today
Bui, D. T., Pradhan, B., Nampak, H., Bui, Q. T., Tran, Q. A., & Nguyen, Q. P. (2016). Hybrid artificial intelligence approach based on neural fuzzy inference model and metaheuristic optimization for flood susceptibilitgy modeling in a high-frequency tropical cyclone area using GIS. Journal of Hydrology, 540, 317-330.
Chan, D. Y., & Vasarhelyi, M. A. (2018). Innovation and practice of continuous auditing. In Continuous Auditing: Theory and Application (pp. 271-283). Emerald Publishing Limited.
Cohen, P. R., & Feigenbaum, E. A. (Eds.). (2014). The handbook of artificial intelligence (Vol. 3). Butterworth-Heinemann.
Dogru, T., Mody, M., & Leonardi, C. (2018). Blockchain Technology & its Implications for the Hospitality Industry.
Hernandez, K. (2017). Blockchain for Development–Hope or Hype?.
Hofmann, E., Strewe, U. M., & Bosia, N. (2017). Supply Chain Finance and Blockchain Technology: The Case of Reverse Securitisation. Springer.
Hood, D., (2018)., Brace yourself for AI & blockchain: There’s less threat and more opportunity in emerging technologies than many think. Accounting Today., Vol. 32 No. 1, pp.1&30-31, Database: Business Source Ultimate
Lu, H., Li, Y., Chen, M., Kim, H., & Serikawa, S. (2017). Brain intelligence: go beyond artificial intelligence. Mobile Networks and Applications, 1-8.
Pannu, A. (2015). Artificial intelligence and its application in different areas. Artificial Intelligence, 4(10).
Tapscott, D., & Tapscott, A. (2016). Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin.
Vigna, P., & Casey, M. J. (2016). The age of cryptocurrency: how bitcoin and the blockchain are challenging the global economic order. Macmillan.
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