2 billion dollars in 5 years! KPMG signed a big deal with Microsoft, and the accounting firm wants All In AI

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AI continues to disrupt the audit industry! KPMG is deeply "bound" with Microsoft. KPMG plans to invest US$2 billion in Microsoft within five years, and automation transformation is expected to generate US$12 billion in revenue for KPMG within these five years.

On July 11, Microsoft announced on its official website that it had reached a landmark agreement with KPMG, one of the world's four major accounting firms. KPMG plans to contribute to Microsoft's artificial intelligence and cloud services within five years. Invest $2 billion.

The deeper cooperation between the two parties will also enable KPMG to further automate taxation, auditing and consulting services, and greatly improve the work efficiency of employees.

KPMG said the investment in Microsoft is expected to bring in more than $12 billion in revenue over five years, which is equivalent to about 7% of KPMG's global annual revenue. According to KPMG's latest financial report, as of September 30, 2022, KPMG's global revenue for fiscal year 2022 will be US$34.64 billion.

In May of this year, Microsoft and KPMG announced cooperation in generative AI and other technical fields. KPMG will fully apply generative AI and deploy Microsoft's OpenAI function on its internal platform. The cooperation mainly focuses on accelerating AI technology innovation **、Enhance customer participation and internal operations in these three aspects.

The further strategic cooperation between the two parties this time will enable KPMG to continue to integrate AI into operations with technologies such as Microsoft's Azure cloud service and OpenAI.

KPMG Global Chairman and CEO Bill Thomas said in an interview that a large part of KPMG's current investment will be used in generative AI, and many companies are eager to apply it to finance to reduce costs and significantly reduce costs. Improve efficiency.

KPMG believes that with the development of artificial intelligence in many aspects, it will bring profound changes to the financial industry. At present, financial innovation driven by innovative technologies such as artificial intelligence is gradually penetrating into various fields such as products, business models, and business processes of financial institutions.

Microsoft CEO Satya Nadella said that combining Microsoft Cloud's artificial intelligence innovation with KPMG's expertise in taxation, auditing and consulting can further support its employees and provide customers with more comprehensive insights.

Artificial intelligence reshaping audit work

In terms of automation of audit work, Microsoft pointed out in the announcement that after the integration of new technologies, **KPMG's audit team will be able to directly access and analyze customer data without importing data, "enabling auditors to more timely conduct an audit". **

KPMG Clara, KPMG's intelligent audit platform, will further integrate data analysis, artificial intelligence and Azure Cognitive services. The company's more than 85,000 auditors can focus on high-risk areas and specific industries in the audit, which will benefit shareholders and capital. The market creates more value.

In terms of taxation, Microsoft pointed out that the integration of Azure cloud services, OpenAI and Microsoft Fabric into KPMG Digital Gateway (KPMG's single platform solution) can enable KPMG to unify large tax reporting data sets, analyze potential ESG-related transactions, and more timely Effectively perform data analysis for audits to enhance work related to environmental, social and governance issues:

Helps analyze Environmental, Social and Governance (ESG) data, build data models, and draft ESG tax transparency reports at a faster pace.

In addition, KPMG will operate a generative AI-powered "virtual assistant" to create new customer service models and help tax officials be more efficient. This will also help KPMG generate new revenue: such as improving product experience and knowledge of managing complex tax laws.

So what does the future look like for employees doing basic auditing today? Some media analysts pointed out that the further cooperation between KPMG and Microsoft means that the further integration of AI may replace a large number of process-driven and data-driven work in a short period of time.

In an interview, Thomas said that KPMG will not lay off employees because of AI, but hopes to improve employee work efficiency through artificial intelligence skills, will adjust some employees to new positions or provide them with AI skills training:

I don't think we're going to lay off a lot of people because we've been working with Microsoft for a long time. I believe that KPMG will continue to grow, we will train our people in new skills as much as possible, and I think in the future we will create all kinds of jobs in ways that cannot even be imagined now.

Jason Juliano, director of the digital transformation department at EisnerAmper, an international business consulting company, said that their current intelligent audit process mainly includes invoices, purchase orders and contracts through natural language processing (NLP):

This makes the audit work faster, avoids a lot of human error, and allows us to provide more valuable work to our clients, just like having a junior person helping you.

According to Juliano, this is also changing their hiring needs:

When we are looking for recent graduates majoring in accounting or finance, we tend to look for people who are good at using AI and various technical tools, AI will help them do their jobs better.

The major changes in the industry are unstoppable

Not long ago, PricewaterhouseCoopers, the world's largest accounting firm, issued a statement stating that the company plans to invest $1 billion in the next three years to develop generative AI technology, and will cooperate with Microsoft and OpenAI to make it Automate every aspect of tax, audit and advisory services.

PwC said that the investment plan includes: recruiting more employees with AI-related work capabilities, training existing employees in AI skills, and targeting AI software manufacturers for acquisitions.

Mohamed Kande, vice chairman of PwC, said: "We hope to run PwC more efficiently with the help of generative AI. Embracing this technology is critical."

Global accounting firms such as Ernst & Young and Deloitte have also invested in generative AI. TurboTax owner Intuit Inc. says it is developing generative AI models for financial management. AI’s disruption of financial jobs continues.

At present, accounting, taxation, auditing and other financial services jobs are gradually being "disrupted" by AI. Rowan Curran, an analyst at Forrester Research Inc., said:

Large language models like GPT-4 can help accounting firms find, retrieve information, and potentially reduce audit workload through intelligence.