KPMG, PwC, EY To Put $9B Toward AI, Data Tech

The largest accounting firms – EY, Deloitte, KPMG and PwC – are investing billions of dollars in artificial intelligence (AI) and data technology products to change the industry in new ways, according to a report by Bloomberg Tax.

The investment goes beyond the idea of just automating processes, moving into entrenched AI work, data analysis and tech training for all employees.

“We haven’t become a pure technology firm,” noted Christian Rast, KPMG LLP’s global head of technology and knowledge. “We are a professional services firm, but technology is core to our future.”

The head of business futures at the Association of Chartered Certified Accountants, Narayanan Vaidyanathan, said the new technology will permanently change how the industry works.

“Many of the routine jobs will go as areas such as invoice processing are automated. However, many more jobs will be created, as accountants and auditors have a wealth of more information available to them: They can now check all of a company’s transactions in real time, with data analytics allowing them to spot trends and anomalies,” Vaidyanathan said. “That means accountants will be expected to become business advisers, not just number checkers. They need to be on top of technology and train staff to use it.”

KPMG said it would make a $5 billion investment, PricewaterhouseCoopers said it will spend $3 billion and Ernst & Young plans to invest $1 billion.

The Big Four auditing firms have also recently requested that the Financial Accounting Standards Board (FASB) provide clarity in how corporates should classify their reverse factoring or supply chain financing agreements, adding more fuel to a long-standing debate as to whether such trade financing tools are considered debt.

In other news, the Securities and Exchange Commission (SEC) has approved a proposal to simplify its auditor independence rules and relax some conflict of interest regulations.

The new rules will also shorten the “look-back” period that U.S. companies need to go through to line up domestic requirements with rules for foreign companies. The “look-back” period is the time a company has to determine an auditor’s independence.