Business Insider published an article early this morning that blatantly suggests AI is a huge threat to the Big 4 revenue machine. Let’s include the intro here so you can see where they intended to go with it:
The Big Four — Deloitte, PwC, EY, and KPMG — are a select and powerful few. They dominate the professional services industry and have done so for decades.
But all empires fall eventually. Large corporations tend to merge, transform, or get replaced by the latest wave of innovative upstarts.
BI used two different headlines that we know of: “AI is coming for the Big Four too” and “It’s not just jobs on the line — AI threatens the Big Four’s dominance.”
For the article, BI spoke Alan Paton, noting that he was “until recently was a partner in PwC’s financial services division” and is now CEO of a Google Cloud consultancy called Qodea. And here’s what Alan had to say about AI hackin’ and whackin’ and smackin’ the Big 4 workforce:
Most structured, data-heavy tasks in audit, tax, and strategic advisory, Paton said, will be automated within the next three to five years, eliminating about 50% of roles. There are already examples of AI solutions capable of performing 90% of the audit process, he added.
Paton said automation could mean clients increasingly question why they should pay consultants big money to “give me an answer I can get instantaneously from a tool.”
Unless they become far more specialized, the Big Four will be in trouble, he said.
We’ll note here that Paton was at PwC for a little over a year according to LinkedIn. He spent eight years at Accenture and six years at Capgemini before that, with a two-year stop at Google prior to joining PwC. So this isn’t some 30-year lifer we’re talking about.
So, what do we think? Is this the beginning of the end for Big 4? Or just a guy waving an End is Nigh sign because that’s the cool thing to do these days?
“There are already examples of AI solutions capable of performing 90% of the audit process, he added.”
Did he elaborate on this or nah?
This looks like a marketing ploy to me.
AI may cause some “trimming at the edges” of B4 business, but that’s all I expect.
Word to the wise, develop professional judgment. AI hasn’t embraced this concept well at this point, but in the next several years we will see AI replace humans who lack professional judgment. I’m sure that certain firms are already looking for a good reason to purge those who don’t follow rules and procedures. Don’t make it easy on your leadership.
Totally. It’s cliche to say but yeah, professional judgment and communication skills are going to be critical. Salesmanship, too. Used to be if you could go along to get along, do your busy work, and not cause trouble you could get your two years and dip but now all that work is shipped overseas and/or automated so there has to be some other defining factor.
I think we’ll start to see firms drastically shift away from hiring accounting grads altogether. They’ve already sort of been doing that for years.
I think this guy has spent zero time in audit and would be very hard pressed to explain current processes/procedures, much less how AI will impact same.
I’m kinda thinking the same thing. Regardless, plenty of clients will spend the $$ on getting a “premium” opinion from prestigious firms–whether or not you think B4 audit work is superior, the name matters to some companies. I don’t see that changing any time soon, AI or no.
Big4 here … The senior P’s have a mega hard on for anything that is AI related – only problem is they lack the technical skills and understanding as it relates to the limitations associated with the use of the technology. LLM’s are token tumblers – they basically spit out the next most probable token (which is often a word or part of a word) based on the input in the context window – and we all know they can hallucinate big time. The key point here is the flawed assumption that: more AI = less people = more productivity = more profit = more units. Don’t think they’ve taken they’ve taken into account the associated risks though.
Does AI have the ability, combined with other technologies, to automate low level tasks that don’t require critical thinking? Sure thing … Will AI replace a tax expert who spends countless hours coming up with convoluted TP agreements? Don’t think so. Will AI result in chatbots that interact with the IRS to defend client’s interests / positions? Don’t think so either.
Lots of hype right now around the tech – it has advantages, but like anything in life, it ain’t perfect – it’s a tool – and you gotta know when to use the tool, and what it’s good for.
We have a bunch of A’s and SA’s using AI to auto generate work and the result is usually complete and utter garbage – sure it reads welll initially – but when you dig deeper there’s no way you’d be able to defend it in audit … it just gives them an excuse to cut corners to generate work product and they just don’t have the skill to interpret the result.
AI agents are already implemented in audit tools, so it for sure reduces monkey job audit routines.