“These changes may be brought about by the application of new developments in artificial intelligence and robotics to perform tasks previously conducted by humans, resulting in a reduction in costs and the need for outsourcing to offshore entities.”
This comment again raises the issue about the regulation and accreditation of providers of “artificial intelligence and robotics”. Who is going to check whether the way the AI and Robotics have been programmed is correct for the tax system? Who is going to provide assurance to a taxpayer or TP if they are using such tools, that the results can be relied upon? Who is the ATO going to challenge if incorrect tax outcomes are being provided?
The cost of understanding how to effectively use AI tools, let alone the cost of acquiring (subscribing to) those tools is a reallocation of the resources, not a reduction.
There is evidence that the improved technology is providing enhanced tools and solutions that assist with data entry, including the automation and creation of digital data. This is extending to automated data analysis, trend analysis, anomaly reporting (yet to be delivered in a productive form), verification and validation techniques.
The improved tools are permitting a change in workflow practices of businesses and TP. There is a reduction in time, and therefore cost, invested in data creation tasks. This alteration in practices permits a shift of that investment to allow greater assurance and certainty. The improved tools require a change in approach, training in the new technology and new techniques.
The improvement in data creation tools allows the production of the same results in a quicker timeframe, which we agree, results in less need to consider shifting such tasks to a lower cost offshore outsourcing solution.
Noting that the improved communication technologies permit a global service approach to the provision of any professional service. Improved collaboration tools, project management, data transfer, automation tools, remote access; all enable a disparate, multilocation approach to provision of TP services.
The improved technology of interaction and interoperability between applications (including API-based technology) decreases the manually performed mechanical processes, resulting in less time on such tasks.
We challenge part of the concept provided in the following:
“Whilst technology, when appropriately utilised, can deliver significant benefits, there are challenges that need to be addressed such as certain functions becoming redundant or significantly diminished and how the affected parties, such as sole tax practitioners and in-house corporate tax specialists, may need to adapt to the new environment.”
The concept that “technology” provided to TP in their role as TP, will in some way make “certain functions… redundant or significantly diminished” is yet to be proven. TP's provide interpretative advice about the application of the tax law to each respective set of business or taxpayer circumstances. We are yet to see any technology that is able to provide the interpretive processes of the tax laws as well as being able to interpret the business circumstances.
We are observing technology improving the automation of processes that informs the role of a TP: Bank Feeds, eInvoicing, and auto-coding are technology-provided solutions using the improved, contemporary abilities developed into software to enable faster processing of data. This technology does not yet provide interpretation which considers the circumstances of the taxpayer. The Software providers may argue that their automation is intuitive, but a true analysis shows that current and [at least in the short-term] future services are still an application of the software providers' interpretation of how all things have to be as long as everyone does business the way the software provider wants or requires them to.
The current and envisaged software solutions are being built on a premise of a “standard” chart of accounts and a “standard” approach to all business processes. This “standard” or “common” premise is not realistic and does not allow initiative and entrepreneurship. It does not recognize the reality – that every business is run by a human with their own personalities and approach – resulting in unique processes in each business. The role of a TP is to apply interpretive knowledge about how business works, how the law applies and what technology to use in each different business circumstance.
To limit the advice and effect of a TP to a set of knowledge applied in a common manner to a standard set of business circumstances is to not recognize the reality of a positive Australian business environment.
The role of a TP is far more than the data creation and analysis of data.
Australian Government policy and approach is to create a digitally enabled economy. This is to be encouraged. TP's must adapt to a far more digitally enabled environment and use the contemporary tools in the delivery of their services.
The impact of this current application of technology on the TP is that the TP must still play a very important role in the setup of each technology-provided service to apply tax law in the context of that taxpayer's circumstance. The future (if not the current) TP is the interpreter of not only tax law but the application of technology.
Updated: 30th August, 2017