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Ethical impact of artiﬁcial intelligence in managerial accounting
Article in International Journal of Accounting Information Systems · March 2023

DOI: 10.1016/j.accinf.2023.100619
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Ethical Impact of Artificial Intelligence in Managerial
Accounting
Chao Zhang
School of Management
Hefei University of Technology
193 Tunxi Road, Baohe District, Hefei, Anhui, P. R. China, 230009
zhangchao@hfut.edu.cn
Weidong Zhu
School of Economic
zhuwd@hfut.edu.cn
Jun Dai
Co-corresponding author
School of Accounting
Southwestern University of Finance and Economics
555, Liutai Avenue, Wenjiang District, Chengdu, Sichuan, P. R. China, 611130
judai@mtu.edu
Yong Wu
Co-corresponding author
School of Management
wuyong@hfut.edu.cn
Xulong Chen
Anhui Cnbisoft Software Technology Co., Ltd
2nd Floor, Building 12, Internet Industrial Park, Garden Avenue, Baohe District,
Hefei, Anhui, P. R. China, 230009
11244195@qq.com
This work was supported by the Humanities and Social Sciences Foundation of the
Ministry of Education of China [20YJC630203]; and the Natural Science Foundation
of Anhui Province, China [2008085QC340]. The funding sources have no
involvement in study design, the collection, analysis and interpretation of data, the
writing of the report, and the decision to submit the article for publication.
Ethical Impact of Artificial Intelligence in Managerial
Accounting
ABSTRACT
Recent advances in technology have accelerated digitalization and intelligence in

modern business. Particularly, the increasing use of Artificial Intelligence (AI) in managerial
accounting is expected to accurately measure corporate performance, provide intelligent
analyses, and predict the future of a company. However, along with the benefits, ethical
concerns of using AI also arise, such as deprofessionalization, data breach, and isolation
among accountants. This paper explores the ethical impact of AI in managerial accounting at
both pre- and post-adoption stages. Based on 47 interviews conducted with companies, an AI
system vendor, and regulators, we found that data security, privacy, and misuse,
accountability, accessibility, benefits and challenges, and transparency and trust of AI are
among the most common ethical risks in the development and use of AI in managerial
accounting. Unique ethical impacts on four types of stakeholders, i.e., developers, managers
in charge of AI adoption, managerial accountants, and regulators, were also discovered.
Finally, we identified ethical principles that stakeholders should follow to avoid those risks.
Keywords: Artificial intelligence; AI; managerial accounting; ethical impact; ethics
0
1. Introduction
Artificial Intelligence (AI) has profoundly influenced the evolution of the modern
business (Haenlein and Kaplan, 2019) and the accounting profession (Issa et al., 2016;
Johnson et al., 2021; Petkov, 2020; Rikhardsson and Yigitbasioglu, 2018; Vasarhelyi et al.,
2015; Warren et al., 2015). Thanks to advances in data collection technologies and the large
reduction in storage cost, companies now collect and store enormous amounts and varieties
of data (Dai and Vasarhelyi, 2016; Moffitt and Vasarhelyi, 2013; Syed et al., 2013). The
increasing availability of data has stimulated the need for technologies such as AI that can
perform efficient and effective analyses. AI uses machines to interpret and learn from data to
accomplish specific tasks (Kaplan and Haenlein 2019). The adoption of AI provides a unique
opportunity for management accountants, who are already proficient at analyzing and
obtaining insights from data. Armed with AI, management accountants can employ
sophisticated analyses to improve corporate performance measurement (Appelbaum et al.,
2017), to establish effective management control systems (Warren et al., 2015), and to
improve the quality of managerial accounting (Chen et al., 2021; Rodgers, 2020).
Recently, regulators have become aware of the ethical risks arising along with AI
adoption (Kaplan and Haenlein, 2020; Munoko et al., 2020). In response, the practice has
devoted efforts to preventing and reducing the risks. For example, the European Group on
Ethics in Science and New Technologies (EGE) suggested ethical principles and democratic
prerequisites in their "Statement on Artificial Intelligence, Robotics and Autonomous
Systems"1 published in 2018, which provided the foundation to control and manage AI
development and use. In 2019, the Chinese Artificial Intelligence Governance Committee
(CAIGC) also stipulated eight rules that organizations should follow when developing AI
applications to protect the rights of human beings and society.2 In the accounting field,
professional associations and regulatory authorities have formulated codes of conduct to
manage the accountabilities of accounting professionals when using technologies (Guragai et
al., 2017). For example, the primary ethical principles issued by the Institute of Management
Accountants (IMA) include honesty, fairness, objectivity, and responsibility.3
Even though accounting professionals are aware of the importance of ethical choices in
the implementation and use of AI (Alles, 2020a), related ethical issues have not been well
explored in academia. In fact, little attention has been paid to ethical impacts of using any
1
https://ec.europa.eu/research/ege/pdf/ege_ai_statement_2018.pdf. Last access: August 23, 2020.
2
http://news.21csp.com.cn/c23/202001/11392464.html. Last access: August 23, 2020.
3 https://www.imanet.org/-/media/b6fbeeb74d964e6c9fe654c48456e61f.ashx. Last access: February 28, 2021
1
technologies in accounting (Guragai et al., 2017). Among the few, Dillard and Ruchala (2003)
studied the ethical concerns when using Enterprise Resource Planning (ERP) systems. Dillard
et al. (2005) introduced a stakeholder responsibility mechanism to mitigate the ethical risks
brought by ERP applications. Dillard et al. (2017) proposed a framework that emphasized
ethical issues brought by technologies appearing at the individual, policy, social, and
organizational level. Alles (2020b) improved the framework by specifying the ethical
principles of each type of stakeholder. Narrowing down to AI, Munoko et al. (2020) created a
theoretical framework that forecasted a series of ethical implications of using AI in auditing.
However, that study was based explicitly on a futuristic analysis of the literature. The ethical
concerns and their consequences in the real implementation and use of AI in the accounting
field remain unknown.
The purpose of this paper is to fill the gap in the literature by investigating the real
ethical impact of AI on managerial accounting during both pre- and post-adoption stages.
Compared with other areas in accounting, the use of AI in management accounting has a
broader impact on organizations and is more likely to cause ethical issues for two reasons.
First, the main role of modern management accounting is to support activities throughout the
entire business (Brands and Holtzblatt, 2015; Cokins, 2013), which involves a variety of
stakeholders. Each individual stakeholder may have his/her own ethical position. For
example, accountants may act in their own self-interest (egoism), while managers are likely
to make decisions mainly based on utilitarianism (i.e., maximizing happiness and well-being
for all stakeholders) (Rodgers et al., 2020). As a result, concerns and challenges may arise
due to the conflict of ethical positions when adopting and using AI. Second, the complexity
and subjectivity of managerial accounting and decision-making processes may complicate the
use of AI (Granlund, 2011). For example, generating managerial accounting reports using AI
is a largely customized process that is not restricted by any accounting standard but should
conform to the specific decision-making procedure of each individual organization.
Managerial accountants have the privilege to use and control AI in their work, which in turn,
influences their behaviors (Dillard et al., 2017). Therefore, managerial accountants' behaviors
could largely increase ethical risks in the use of AI and should be under sound control to
mitigate bias, unfairness, harm to user autonomy and independence, and poor decisions
(Kleindorfer et al., 1993; Munoko et al., 2020).
2
This paper is one output of a large research project undertaken with Anhui Cnbisoft
Software Technology Co., Ltd4, a major Chinese accounting-oriented AI system vendor. This
collaboration provides us with unique access to four types of stakeholders, i.e., AI developers,
managers in charge of AI adoption in client companies, managerial accountants, and
regulators, to investigate how AI is adopted and utilized in the managerial accounting domain.
The behaviors of the four types of stakeholders are influenced by their ethical principles and
other hidden motives, which forms the research questions of this paper: (1) What are the
ethical concerns when using AI in managerial accounting? How can those concerns be
alleviated? (2) What are differences in the ethical concerns among the four types of
stakeholders?
Forty-seven interviews were conducted to investigate the research questions. The
interview results reveal that major ethical issues exist throughout AI implementation and use
and have long-term impacts on managerial accountants and companies. First, certain AI
ethical concerns faced by managerial accounting such as data security, expectation gap, and
transparency and trust, are similar to those in other accounting fields, like auditing (Munoko
et al., 2020). Second, the complexity and subjectivity of management accounting, control,
and decision-making usually result in many human interventions and interactions with AI,
which leads to a series of ethical issues, such as competence, accountability, and power over
user. Lastly, organizations need to consider the interests and preferences, both explicit and
implicit, of all stakeholders (Rodgers and Gago, 2003) when adopting AI in managerial
accounting. Therefore, ethical concerns, such as how to balance various interests of
stakeholders and prevent a sense of isolation, should be carefully assessed and alleviated.
This paper contributes to the literature in several ways. First, to the best of our
knowledge, it is the first paper that collects empirical evidence on the real ethical impact of
developing, implementing, and using AI in managerial accounting. Second, it analyzes AI
ethical impact from both pre- and post-adoption stages and discovers the major ethical
concerns at each stage. Third, it focuses on four types of stakeholders, i.e., developers,
managers in charge of AI adoption, managerial accountants, and regulators, and investigates
ethical impacts on each group. Last, it identifies the principles from EGE and CAIGC that
stakeholders should follow to avoid ethical issues and risks.
The remainder of this paper proceeds as follows: Section 2 provides the background of
AI, its applications in managerial accounting, ethical guidance on AI, and related work
4
http://www.cnbisoft.com/
3
regarding AI ethical impact on accounting. Section 3 describes interview and data processing
methods. Section 4 presents interview results. Section 5 discusses ethical challenges when
using AI in managerial accounting and suggests mitigation approaches. Section 6 concludes
the paper.
2. Background
2.1. Artificial Intelligence (AI)

AI is initially defined as the study and design of intelligent agents, which perceive their
environment and take actions that maximize their chances of success (Nilsson, 1998). As the
technology is developing, it now aims to automatically identify the intricate patterns hidden
behind data and make intelligent decisions based on identified data patterns (Kaplan and
Haenlein, 2019). Executives believe that the use of AI and other related technologies create
value for their companies (Elbashir et al., 2013). In recent years, accounting professionals
have increasingly applied AI to identify potential business risks, estimate accounting values,
and detect financial errors and fraud (Amani and Fadlalla, 2017; Dai, 2017; Dai and
Vasarhelyi, 2020; Ding et al., 2020). However, potential consequences of using AI must be
thoroughly evaluated (Dillard and Yuthas, 2001). If there is a conflict between the decisions
made by individuals who are influenced by technologies and activities required by the code
of conduct or other standards, ethical risks will arise (Alles, 2020b).
2.2. Managerial Accounting

The focus of managerial accounting has evolved from supporting financial decision-
making and budgetary control to a much broader scope of identifying, measuring, and
managing the key financial and operational drivers of a company (Ittner and Larcker, 2001).
The primary roles of modern managerial accounting include preparing financial statements,
budgeting for internal costs, implementing control for corporate performance, and facilitating
strategic cost management to achieve long-term goals (Brands and Holtzblatt, 2015). To
accomplish those tasks, managerial accountants need to process a variety of data from inside
and outside of a company. AI can help improve the effectiveness and efficiency of analyzing
such data via identifying rules or models from historical data under various decision-making
scenarios (Sutton et al., 2018). For example, AI-based management and control systems can
integrate internal and external data, perform comprehensive data analyses, and display results
in dashboards (Rikhardsson and Yigitbasioglu, 2018). Furthermore, AI can extract and
analyze data from news articles and social media to help a manufacturing company choose
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the optimal raw-material supplier (Appelbaum et al., 2017). However, the effects of using AI,
especially the ethical impact, may be observed only in the long term (Granlund and Malmi,
2002) due to the complexity in the design, implementation, and use of AI in managerial
accounting systems (Lee et al., 2014). For example, AI can monitor the activity logs in
employee computers and check web use and click streams to control inefficient behaviors
(Warren et al., 2015). However, such an employee monitoring function may raise legal and
ethical issues (Martin and Freeman, 2003). Identifying ethical risks and understanding their
consequences can help practitioners and regulators to protect the rights of employees,
organizations, and society when using AI.
2.3. Ethical Guidance on AI Development and Use
Many countries and regions have become aware of ethical risks brought by AI and
introduced a series of ethical principles. In March 2018, EGE announced the "Statement on
Artificial Intelligence, Robotics, and Autonomous Systems, " which is composed of seven
ethical principles: 1) human dignity, which stipulates that AI algorithms should not be used in
a discriminatory manner; 2) autonomy, which means that whether, how, and when to use AI
systems are determined by humans, and the systems should be transparent and predictable; 3)
responsibility, meaning that the design, development, and use of AI systems should not
introduce unacceptable risks of harm to human beings; 4) justice, equity, and solidarity,
which refer to the prevention and detection of discriminatory bias and deviations in an AI
system, and the establishment of a mechanism of fair distribution and benefit-sharing; 5) rule
of law and accountability, meaning that governments and organizations should clarify with
whom liabilities lie if AI's undesired behaviors cause damages; 6) security, safety, and bodily
and mental integrity, referring to the reliability of AI with respect to human-machine
interaction; and 7) data protection and privacy.
Similarly, the CAIGC issued the "Artificial Intelligence Governance Principles in the
New Generation: Developing Responsible Artificial Intelligence" in 2019. Among them are
five principles regarding ethical issues: 1) harmony and friendliness, 2) fairness and justice, 3)
safety and controllability, 4) shared responsibility, and 5) respect for privacy. Harmony and
friendliness mean that the development and use of AI should respect human ethics and avoid
misuse and abuse. Fairness and justice refer to protection of rights and interests of
stakeholders in the development and use of AI. Safety and controllability mean that AI
systems should be transparent, interpretable, reliable, and controllable. Shared responsibility
stipulates that stakeholders should be self-disciplined and take responsibility for the
development and use of AI systems. Respect for privacy prevents theft, tampering, breach,
5
and other illegal actions upon data used by AI. These principles from CAIGC and EGE could
serve as guidance for managerial accountants, managers, developers, and regulators to avoid
AI ethical risks.
2.4. AI Ethics for Managerial Accounting
Compared with financial accounting, managerial accounting processes are more flexible
and diverse because there are no widely accepted standards. Therefore, more ethical
challenges could arise when developing and using AI in managerial accounting. For example,
does AI ignore the ethics aspect when solving problems based on statistical models? Do AI
development and use consider justice and fairness among all stakeholders, especially with
regard to vulnerable groups (Villegas-Galaviz and Martin, 2022)? Does the use of AI hinder
the development of professional judgment from managerial accountants (Sutton et al., 2022)?
Does it weaken or even eliminate the skepticism or necessary ethical thinking in the decision-
making process (Alles, 2020a)? Researchers have found that technologies such as AI can
affect humans' ethical decisions in both positive and negative ways throughout their
development and use (Guragai et al., 2017, Martin and Villegas-Galaviz, 2022). It is critical
to identify those effects, whether intentional or unintentional, that could harm users and
associated entities, which may hinder AI adoption. To assess such impact, it is essential to
define AI ethics in managerial accounting.
Although the existing literature does not have a precise definition and scope of AI ethics
in managerial accounting, several studies provide some insights. First, the ethical impact of
using AI in managerial accounting should focus on whether user behaviors are harmful to
people (Paul and Elder, 2013), organizations, or society (Dillard and Yuthas, 2002). The
behaviors of AI users are attributed to their ethical considerations (Alles, 2020b). As a result,
it is critical to identify ethical considerations that may lead to behaviors that harm others and
society (Alles, 2020a) and to create a code of conduct to prevent them when using AI (Alles,
2020b). Second, the ethical foundation in the use of AI in managerial accounting should be
related to the accountability of stakeholders (Dillard et al., 2005) because the behaviors of
accountants, managers, and other stakeholders will affect the results of AI, which will be
used to make decisions that affect organizations and people (Guragai et al., 2017). Therefore,
a mechanism that stipulates the accountability of each individual and his/her behavior must
be established (Davern et al., 2019). Third, ethical risks may widely exhibit throughout the
AI system development life cycle, i.e., design, development, implementation, and use (Alles,
2020a). Therefore, identifying AI ethical impact in each stage can help managerial
accountants and other stakeholders to avoid ethical challenges at a particular stage.
6
Limited research has been done on the ethical impact of AI in the accounting profession.
Munoko et al. (2020) forecasted a comprehensive list of ethical risks associated with the use
of AI in the auditing practice. Examples of the ethical risks include those related to data
security and privacy, expectation gap, accountability, bias, auditor competency, and audit
quality standards. However, the study focused only on ethical risks faced by auditors, which
are not necessarily encountered by managerial accountants. To fill this gap, our study aims to
identify ethical risks when using AI in the managerial accounting domain.
3. Research Methods
3.1. Interview Method
Due to the fast growth of AI and its short application history in accounting, the
profession has not had much time to think from the ethical perspective (Munoko et al., 2020).
The interview approach allows us to perform an in-depth and heuristic examination of actual
ethical risks and challenges that are faced by stakeholders in the development,
implementation, and use of AI in managerial accounting. We selected our interview sample
from two perspectives: 1) the interview participants should have some experience in the
adoption or use of AI for the managerial accounting purpose, and 2) the interviewees should
include four types of stakeholders, i.e., AI developers, managers in charge of the adoption of
AI, managerial accountants, and regulators who supervise and monitor the adoption and use
of AI in managerial accounting.
With the help of the Anhui Cnbisoft Software Technology Co., Ltd, a total of 47 semi-
structured interviews were conducted during May 2018 and December 2019. Among them,
41 interviews were conducted with companies that either had implemented and used an AI
system of Anhui Cnbisoft or were in the process of acquiring the system, five were conducted
with regulatory agencies of stated-owned enterprises in China (which belong to the State-
owned Assets Supervision and Administration Commission [SASAC]5), and the last
interview was with the AI company. Nineteen participating companies had adopted the AI
system or were in the process of implementing the system, and the rest were in contact with
the AI company for product acquisition. Among those companies, 29 were state-owned and
12 were civil enterprises. The companies were from a large range of industries, such as
5
In China, all state-owned companies' operation and management, including the implementation and use of AI
systems, are under the supervision of SASAC. Details can be found at http://en.sasac.gov.cn/. Last access:
September 9, 2020.
7
leasing and business services (16), manufacturing (12), wholesale and retail (5), finance (4),
and others. The experience of those companies in using AI in managerial accounting and
their total assets are summarized in Tables 1 and 2.
[Insert Table 1 about here]
The AI system, named "Intelligent Financial and Business Decision Support System"
and developed by Anhui Cnbisoft, is a semi-customized web-based system with an
integration of general AI functions and customized modules that meet the specific needs of
each client. The AI-based techniques provided by the system include speech recognition,
natural speech processing, Online Analytical Processing (OLAP), Extract, Transform, and
Load (ETL), rule-based data mining, machine learning, and predictive modeling. Details of
the system are provided in Appendix A.
Since ethical issues usually appear only in a small number of many actions taken in
people's professional lives (Alles, 2020b) and are often implicit rather than explicit (Guragai
et al., 2017), we used general questions regarding AI adoption in managerial accounting in
the interviews and explored ethical impact from the answers. We include the ethics-related
open-ended interview questions in Appendix B.
Interviews were conducted face-to-face through site visits. The outline of interview
questions was sent to a company via email before an interview. The interviewees from client
companies were in a variety of positions, such as managers, financial officers, accounting
directors, managerial accountants, IT directors, and IT staff, who either were in charge of or
participated in the acquisition, implementation, or use of the system. In the interview, we first
introduced the purpose of the interview and then asked the interviewees to speak freely
without needing to stick to the interview questions, which was consistent with the semi-
structured interview technique (Bradford et al., 2022). The interview generally lasted around
one hour per organization.
All interviews were recorded and transcribed, and notes were taken during the
interviews. We eliminated content that was irrelevant to this study and focused on the
specific passages related to ethical concerns and challenges in the development,
implementation, and use of AI in managerial accounting. Due to the nature of the open-ended
interviews and the time limit, we received some comments beyond the scope of the interview
questions and missed the responses to a few questions from some companies.
3.2. Data Processing Method
8
We used the "open coding" technique (Glaser and Strauss, 1967) to process the interview
data. We first reviewed a single transcript together, identifying, refining, and adding ethical
topics until a list of topics was developed. Two researchers then independently coded all
interview data using the initial list of ethical topics and added topics (and discussed with the
other researchers) as necessary. Disagreements were then discussed with other researchers
until agreements were reached. We began with 23 ethical topics, eight of which were either
not used or were combined with other topics due to similarities. Finally, a total of 162
passages6 were identified that discussed 15 ethical topics (see Table 3). Among these ethical
issues, data security, privacy, and misuse (32 passages from 32 organizations), accountability
in AI development (20 passages from 15 organizations), accountability in the use of AI (18
passages from 15 organizations), accessibility (17 passages from 17 organizations), benefits
and challenges (13 passages from 13 organizations), and transparency and trust (12 passages
from 12 organizations) were among the most common ethical challenges faced by companies,
developers, and regulators in the development, implementation, and use of AI in managerial
accounting.
4. Results
The interview results are summarized in Table 3. Details are explained as follows.
4.1. Ethics Issues in the Development and Implementation of AI
4.1.1. Data security, Privacy, and Misuse
Concerns regarding data security, privacy, and misuse were mentioned by 32 respondents,
among whom 19 were worried about security of business data, eight were concerned about
security in external data acquisition, and five were worried about the security issues when
integrating internal and external data. Using AI to accomplish managerial accounting tasks,
e.g., to automatically generate managerial accounting reports or conduct multi-dimensional
analysis to support decision-making, requires the use of a huge amount of financial and
operational data. Those data often reveal key performance indicators of companies and even
contain business secrets, which should be kept confidential. Therefore, companies often pay
6
We put the discussions from one interview related to a specific ethical issue at one stage into one passage. Not
every company has been through all three stages (implementation, short-term use, long-term use); i.e., some
companies have not fully implemented the system, some are in the process of implementation, and some are still
in the inquiry stage. As a result, there are 140 passages from companies, 8 passage from the software company,
and 14 passages from the five SASAC agencies, resulting in 162 paragraphs in total.
9
close attention to how AI extracts and stores the data and whether they can be accessed by a
third party, as expressed by the following respondent:
The system has a huge amount of financial and operational data. How are
data extracted and stored by the system? Are they stored in a cloud, locally, or
at your (software vendor) server? When developers remotely log in to the
system and download real financial and business data, how does it ensure that
the data are not leaked? (IT director, salt company, total assets between 0 and
10 billion RMB, using AI for 1-2 years)
Conglomerate companies are concerned about data privacy and misuse when
data are used across headquarters and subsidiaries. On the one hand, integration of
financial and operational data from multi-units and multi-departments can provide AI
with a complete dataset to analyze performance of different subsidiaries and detect
abnormal or inefficient business activities. On the other hand, integrated data increase
the chance of data breach and misuse. Therefore, companies should carefully consider
constraints and rules when using AI and data. An accounting director in a subsidiary
of a transportation company stated:
It is necessary to integrate financial and business data of headquarters and
their subsidiaries, but the roles and privileges [of data access] must be set up
in the AI system. Each unit can see its own data, but it should not be allowed
to see the data of other units. The privileges should be limited for a parent
company seeing the data of its subsidiaries, or a headquarter seeing the
detailed data of each unit, or they [the data] can only be viewed and assessed
and cannot be downloaded and changed to prevent data leakage or use for
other purposes. (Accounting director, transportation company, total assets
between 300 and 1000 billion RMB, under implementation of the AI system)
The AI system also obtains data generated from outside companies, such as industry
information, tax data, legislation cases, and social media data, and integrate them with
financial data to train comprehensive models for risk control, budget forecast, etc. However,
these external data usually come from third-party organizations (such as Bloomberg) or
individual web-crawlers, so data reliability, copyright issue, bias, and data repurposing (i.e.,
the use of data extends beyond the purpose for which the data are generated) emerge as major
concerns, as stated by the following respondent:
When conducting analyses for decision-making, we pay great attention to
external data such as industry data, financial information of other companies,
litigation, tax, and others. However, the reliability of data acquisition
channels, the accurate transformation of PDF and image-based external data,
and whether it involves legal risks when using the data, etc., are our concerns
when using external data. (Accounting director, energy company, total assets
between 100 and 300 billion RMB, initial inquiry of the AI system)
10
A similar concern was stated by another respondent:
Two months ago, a company which provides web-crawling data was sued in
Hangzhou [a major city in China] because of copyright infringement.
(Accounting director, construction company, total assets between 10 and 50
billion RMB, in preparation of acquiring the AI system)
He emphasized that data provided by AI systems must be legal to use; otherwise, he

would refuse to use them.
Regarding security issues in the integration of internal and external data, since the
benefit of merging those data may outstrip the security concerns, companies are often willing
to take the risks, as discussed by the following respondent:
Although the integration of internal and external data may raise security
concerns, internal and external data have to be integrated for better decision-
making. (IT director, salt compony, total assets between 0 and 10 billion RMB,
using AI for 1-2 years)
In summary, one of the top ethical concerns of managers and managerial accountants is
security, privacy, and misuse of internal data, external data, and integration of internal and
external data. They are anxious to ensure that companies' data are not breached by AI
developers or used by other organizations. However, companies may also take risks if the
benefits of AI and data integration exceed the costs due to data breaches.
4.1.2. Accountability in AI Development
An interesting ethical question emerged in our interviews: Who should be held
accountable for the results from AI? Twenty respondents from client companies, the AI
developer, and SASAC agencies discussed this question. Two engineers of the AI company
indicated that novel algorithms were more likely be chosen simply because these algorithms
were more attractive to users. However, due to developers' overconfidence in AI and lack of
understanding about robustness, these novel AI functions might generate misleading results
that would lead to poor decisions. A director from the AI company emphasized the
accountability of AI providers as follows:
The project team must choose appropriate and mature AI technologies based
on the actual requirements of the project. Never ignore the actual situation of
the project and choose unfamiliar technologies that are fancy but not
necessary for the project. If project developers are not qualified [to develop AI
functions], it is critical to focus on this risk factor. Necessary AI technologies
for the project should be selected, and technical training should be carried out
for the relevant personnel before the technologies are applied. (IT director, AI
company)
11
Managers in charge of acquiring and implementing AI should be accountable for its
successful implementation. Twelve respondents mentioned that the awareness of and beliefs
about AI from top management or managers who were in charge of AI adoption greatly
influenced AI development and application. For example, the following respondent stated:
Although the AI system is good, whether it can be used depends on the attitude
of top management and whether the budget is sufficient. (Accounting director,
construction company, total assets between 10 and 50 billion RMB, in
preparation of acquiring the AI system)
A similar statement was made by another accounting director:

Accounting directors [who are in charge of AI adoption] should take the first
responsibility and be responsible to top management. (Accounting director,
pet food company, total assets between 0 and 10 billion RMB, using AI for
more than 2 years)
Managers have diverse requirements and preferences when acquiring AI due to

differences in knowledge and background, experience, and trust in technologies, resulting in
great variation in system acquisition and implementation. The interview results show large
differences in terms of time periods and behaviors when acquiring AI. One manager, who
had a clear view about which managerial accounting tasks should be facilitated by AI, spent
only eight months from inquiry to the completion of implementing the AI system. However,
most managers were very cautious. Although they usually had a general idea about how the
AI system should facilitate managerial accounting, detailed demands became clear only after
multiple communications with the AI developer, managerial accountants, and top
management. It often took 15-18 months to complete system acquisition and implementation.
If the manager in charge rotated, the implementation period might be even longer. However,
three respondents mentioned that to meet SASAC's requirements, they needed a fast
implementation of AI, as stated by the following respondent7:
It's already the second half of the year. I hope to quickly use AI in the analysis
of cash flow and accounts receivable and demonstrate its benefits, which can
be used as a part of the year-end assessment [from SASAC]. (Accounting
director, food company, total assets between 50 and 100 billion RMB, using
AI for more than 2 years)
7
In the year-end assessment of stated-owned companies, SASAC required companies to have
"innovative activities" in management accounting. Those respondents described that their
companies chose to implement the AI software as an innovative activity. Since the
assessment was at the end of the year, the AI implementation had to be fast.
12
Managerial accountants also play an essential role even early in the development and
implementation processes. Less effective communication and misleading information
collected at the system investigation stage will harm AI effectiveness and reduce the chance
to meet user expectations. The interview results reveal that managerial accountants have
different attitudes towards AI, which affects communication effectiveness. For example,
certain users were very motivated and looked forward to AI improving their work efficiency,
as stated by the following respondent:
The system development task in this year is the development of our AI and
accounting center, so we must actively cooperate with the software company
regarding demands and development [of the AI system]. (Managerial
accountant, investment company, total assets between 100 and 300 billion
RMB, using AI for 1-2 years)
As a result, they were actively involved in communications with AI developers and

provided sufficient and accurate information. However, users with negative attitudes worried
that AI would bring extra work or cause complex changes to their careers, so they were
unwilling to cooperate with developers. One respondent raised the following concerns:
We have concerns about whether the system design is consistent with the
actual situation of our company. Will it bring us extra work? (Managerial
accountant, international trading company, total assets between 10 and 50
A project manager of the AI company stated:

In the requirement investigation phase, one challenge is that some managerial
accountants are busy with their own work and have no time to help us
understand their needs. Sometimes, we have to seek help from accounting
directors who assign the task to specific people. (Project manager, AI
company)
The interviews with three SASAC agencies revealed that regulatory agencies play a role
in the supervision of AI development and implementation. SASAC continually monitors the
competence of AI developers and the quality of accounting-oriented AI systems on the
market. It also guides state-owned enterprises regarding developer choices, as well as
regarding whether to implement an AI system for the managerial accounting purpose based
on the nature, size, risk, and type of business activities of companies. A staff member from
SASAC who supervised AI adoption by state-owned enterprises stated:
We are very willing to build a bridge between state-owned enterprises and
software vendors, but our first concern is the safety and functionality of
software products, and whether there is already a good application. (Staff,
SASAC)
13
In summary, each type of stakeholder has its special responsibilities when adopting AI.
It is critical for the stakeholders to understand their responsibilities before developing or
using AI.
4.1.3. Beneficiaries
One critical factor that impedes AI implementation in managerial accounting is the
relatively small beneficiary scope. Our interview results show that state-owned enterprises
hesitate to build a stand-alone AI system specifically for managerial accounting, but they are
willing to have an integrated system with comprehensive analysis functions on financial,
operational, and manufacturing processes. Eight respondents from state-owned companies
emphasized the need to integrate accounting data with other data and processes, as well as to
effectively communicate the results to other departments, which could expand the scope of
beneficiaries. Surprisingly, regulatory agencies were found to be one of the major
beneficiaries of AI. Three respondents from SASAC agencies mentioned the benefit of
accessing state-owned enterprises' financial and operating data, monitoring their risks, and
even controlling abnormal activities using AI. However, companies viewed the benefit of the
open access from a different angle, as stated by the following respondent:
If [SASAC] want to see the content other than general reporting indicators,
especially the business operation risks of my company, I still need to think
about it carefully. (Accounting director, transportation company, total assets
between 300 and 1000 billion RMB, under implementation of the AI system)
In private enterprises, identifying beneficiaries is even more critical. For example,

whether CEOs and top management can benefit from AI could influence their investment in
the technology, as stated by the following respondent:
Using AI in financial analysis is good, but it depends on whether our CEO
needs it. If he thinks that the analysis is good, [using AI in] the accounting
department is valuable. (Accounting director, construction company, total
assets between 0 and 10 billion RMB, initial inquiry of the AI system)
In summary, companies should carefully consider all stakeholders' interests when

adopting AI. However, conflicts of interest commonly exist in the adoption and use of AI.
4.1.4. Competence of AI Developers
Since AI is new to managerial accounting, only a limited number of qualified technical
personnel can develop accounting-oriented AI systems, which both clients and AI companies
are concerned about. Five respondents mentioned this concern, among which one was a
manager from a client company and four were from the AI company. Clients were concerned
whether AI developers would be responsible for their products and provide sufficient and
14
appropriate support. The design of managerial accounting-oriented AI systems is usually
more customized compared with ERP systems. Therefore, it is critical for AI developers to
fully understand their clients' requirements, such as managerial accounting functions, data
preparation, and integration of accounting and operational processes. To achieve this goal, AI
developers should have accounting backgrounds and knowledge or should work with
accountants. AI systems could then improve the efficiency and quality of managerial
accounting rather than creating additional workload or misleading results due to inaccurate
data. Our interviews showed that client companies paid close attention to the maturity of AI
systems, the overall quality of AI developers, and their capability to maintain and improve
the AI system in the long term, as stated by the following respondent:
[Our CEO] worries that AI developers often upgrade their systems for profit-
only purposes [but not the real needs of the company]. He also looks at the
size, development team, personnel competence, business partners, and
operating conditions of an AI company. He is mainly afraid that he cannot
reach the company later [for support, because it was going bankrupt], or its
development team is not competent for the project. (Accounting director,
cement company, total assets between 0 and 10 billion RMB, using AI for 1-2
years)
Another respondent believed that technical personnel with accounting backgrounds

could well understand the needs of managerial accountants, so they would be more likely to
build functions that could be seamlessly incorporated into managerial accounting processes,
ensure the accuracy in the calculation of relevant indicators, and provide results that reveal
the real problems of companies. He stated:
I hope that the AI company has experienced and capable development teams.
(Accounting director, cement company, total assets between 0 and 10 billion
RMB, using AI for 1-2 years)
The AI company aimed to develop a team with a strong technical and accounting
background and communication skills to develop trustable AI systems under controllable
costs. Respondents from the AI company believed that an AI development team with weak
accounting backgrounds, technical abilities, and communication skills would greatly increase
development costs due to lack of understanding of clients' needs or structures of source data.
If costs increased due to re-design and re-development of AI, the AI company might need to
control the costs by reducing the quality of the AI system, which would cause many ethical
issues. One director of the AI company stated:
We paid attention to the abilities and qualities of our personnel in
development teams, as well as collaborations, employee retention, and other
risks... Before establishing a project development team, we provided trainings
15
targeting them, and the right people were assigned to the right positions...
Therefore, we can develop trustworthy AI systems under controllable costs.
(IT director, AI company)
One director of the AI company believed that technical personnel who had been engaged
in ERP system development would have a better understanding of data structure and index in
ERP systems, so they could extract the correct data from ERP systems and feed them into the
AI system. He stated:
I hope to find technical personnel the company wants from those who were
originally engaged in ERP system development. But there are currently very
few developers who understand both accounting and technology on the market.
(IT director, AI company)
In summary, developers' competence is a major ethical concern of both AI companies and

clients. AI companies aim to develop reliable AI systems under controllable costs. Therefore,
it is necessary to hire technical personnel with strong accounting backgrounds and
communication skills to ensure that AI systems can meet managerial accountants' needs and
avoid changes and re-development. On the other hand, it is necessary to provide sufficient
training for technical personnel and put the right people in the right positions.
4.2. Ethics Issues in the Use of AI
4.2.1. Expectation Gap
Five respondents mentioned that before using the AI system, they expected it to provide
far-reaching insights and to decide what to do in the future. However, during implementation
and use, they gradually lowered their expectations of AI replacing humans' roles in decision
making. One accounting director who oversaw the AI system implementation stated:
It is more appropriate to define AI as a tool for managerial accountants and
managers to perform analytics. (Accounting director, transportation company,
total assets between 300 and 1000 billon RMB, under implementation of the
AI system)
Moreover, our interview results revealed that it was difficult to directly use the results
from the AI system to guide operations and decision-making. Three respondents emphasized
that human intervention and professional judgment were still necessary when using the AI
system. One managerial accountant originally expected that the AI system could
automatically identify risky events and provide corresponding strategies and suggestions.
However, after using the system, he stated:
The risk identification module cannot be fully automated, especially when
business data cannot be smoothly connected to the system. (Managerial
16
accountant, agriculture company, total assets between 10 and 50 billion RMB,
using the AI system for more than 2 years)
In summary, the gap between expectations of managerial accountants and AI

performance usually falls in whether AI can automate managerial accounting tasks. At the
current stage, human intervention and professional judgment are still necessary.
4.2.2. Transparency and Trust
Twelve respondents expressed personal doubts about the effectiveness of AI, especially
when employing it in a real managerial accounting context. Although managerial accountants
are eager to use AI for controlling business activities, predicting costs and revenues, and
identifying potential business risks, they still worry that theoretical AI models may encounter
problems when analyzing real data and dealing with complex scenarios. The doubts may be
due to the "blackbox" nature8 of AI (Schneider et al., 2015), which makes its operation less
transparent to users. One respondent asked:
How can you prove that the expert rules [embedded in the AI system] are
completely correct? (Managerial accountant, investment company, total assets
between 100 and 300 billion RMB, using AI for 1-2 years)
Another respondent stated:

Some AI models can identify the problems, but some are not good.
(Accounting director, energy company, total assets between 100 and 300
A similar comment was:

There are many analysis demands in the areas of production, operation, and
warehouse. They [managers] have preliminary ideas, but there are doubts
about whether AI can solve practical problems. (Accounting director, food
technology company, unknown total assets, initial inquiry of the AI system)
Respondents believed that if decisions were made based on AI results only, there would
inevitably be certain risks. One respondent stated:
Some AI models can identify and solve accounting problems, but others do not,
especially when the accounting standards or business environment changes.
(Accounting director, steel company, total assets between 50 and 100 billion
RMB, in preparation of acquiring the AI system)
8
The "blackbox" issue of AI means the internal logic and operations of many AI algorithms,
such as neural networks, are difficult for humans to observe and understand.
17
In summary, doubts about AI widely exist, especially when employing them in a real
managerial accounting context. As a result, companies should educate managerial
accountants with sufficient knowledge of AI and help them develop a mindset of identifying
appropriate AI algorithms to accomplish managerial accounting tasks.
4.2.3. Bias
Many AI systems rely on rule-based algorithms. Those rules are usually extracted from
experts' knowledge and judgement. Due to the knowledge limitations of experts, their
personal emotions, and the environment they work in, the rules embedded in the systems may
carry human bias in decision-making, and this bias can be spread through the use of AI to
make decisions and judgments. Four respondents were concerned that AI algorithms might
pass experts' bias on to managerial accountants. One director of the AI company who was in
charge of expert model design stated:
Results of expert models are based on their [experts'] own cognition. We
should remove personal emotions from the cognition as much as possible to
prevent such emotions from being passed on to managerial accountants. (IT
director, AI company)
To alleviate the bias, companies should perform evaluations regarding the fairness,
justice, and equity of AI algorithms. Moreover, some companies use the AI system in parallel
with the analyses from accountants and other professionals and cross-verify and integrate the
results from both sides. One respondent explained:
The earliest version 1.0 [of intelligent managerial accounting reports] is done
entirely by AI. After a few months, I found that the reports were not very good.
After all, the backend of the machine is based on AI models. AI is often
developed by experts. They still have a distance from real management. […]
Then we continue improving it by adding the analyses from our management
team so that it can better facilitate management decisions, adjust bias, and
control operations. (Managerial accountant, agriculture company, total assets
between 10 and 50 billion RMB, using the AI system for more than 2 years)
In summary, AI can help managerial accounting with analyses through rules and models
extracted from experts' knowledge and judgement. Due to the limitations of experts'
knowledge, results from expert models may be biased or convey a certain degree of prejudice.
Therefore, it is critical for managerial accountants to maintain professional judgment when
using AI to reduce the impact of expert bias on decision-making. This can be achieved
through professional training and life-long education for managerial accountants. Moreover,
regulators or industry associations could establish an evaluation mechanism to assess the
objectivity of AI.
18
4.2.4. Result Distortion
Although increasing human interaction with AI systems could help to reduce bias and
over-reliance on technologies (Marco, 2019), it may cause result distortion. Result distortion
means the deviation of AI results perceived by users from the true results that AI should
provide. It may be caused by technology or humans. From a technology perspective,
inaccurate data input or expert models not adapting to the actual situations of companies
could lead to distorted results. From a human perspective, managerial accountants may
intentionally misinterpret AI results, draw misleading conclusions, and report them to upper-
level management or regulatory authorities for their own benefits. Three respondents
discussed this ethical risk. On the one hand, human interaction with AI and adjustment are
necessary to reduce result distortion of AI algorithms such as expert models, as stated by the
following respondent:
The result of expert models requires a large amount of data to verify, and
parameters in the models should be adjusted according to actual situations of
companies. If no adjustment is made, general recommendations from experts
will not make sense for decision-making, and may even mislead managers.
(Accounting director, securities company, total assets between 300 and 1000
billion RMB, initial inquiry of the AI system)
On the other hand, human interactions with AI may leave much room for managerial
accountants to manipulate results, which therefore raises ethical risks. The respondents
mentioned that they provided many inputs when generating managerial reports using the AI
system, such as assessing and assigning a risk level for each case identified by the system.
Therefore, a significant ethical risk exists in the process, as accountants might choose to
describe the risk in a way that is beneficial to themselves to avoid punishment. A respondent
asked:
If the managerial accountants are granted the privilege to set how indicators
can be displayed, will it allow them to choose the way that is beneficial to
them, such as changing the scale of results to look good? (IT staff, agriculture
company, total assets between 10 and 50 billion in RMB, using AI for more
than 2 years)
To avoid such risk, companies should create additional controls to assess the quality of
user input and identify fraudulent activities. Moreover, when training managerial accountants,
it is necessary not only to improve their professional judgment, but also to emphasize ethics
and reduce distorted input.
4.2.5. User Competence
19
Competence refers to users being competent in the process of using AI to accomplish
managerial accounting tasks and developing skills to perform effective analyses and
accurately interpret results (Drunen et al., 2019). Eight respondents raised concerns regarding
this ethical issue. Among them, three respondents were concerned that certain employees
were less willing to use AI because of their dated knowledge background and education,
difficulties in understanding advanced algorithms, and unfamiliarity with essential IT
functions. One respondent stated:
I am old and my thoughts are very rigid. I am not very good at learning your
sophisticated system. If there are just clicks, that's fine, but I don't really want
to use the system. (Accounting director, investment and construction company,
total assets between 0 and 10 billion RMB, in preparation of obtaining the AI
system)
Two respondents mentioned that the challenge would be even more severe when scripts
(or command lines) were required to create customized functions. For example, a power
supply company needed to customize the function of financial indicator analyses. Its financial
officer stated:
The pre-set accounting indicators [in the AI system] are different from those
that each project needs to analyze. Customized analyses are highly needed to
solve problems, but they are very difficult. (Financial officer, power supply
company, total assets between 50 and 100 billion RMB, in preparation of
acquiring the AI system)
Understanding basic database functions and SQL statements are necessary to

accomplish this task, but it is very challenging for accounting staff with limited training and
practice in databases and SQL. A managerial accountant stated:
Financial indicators often need to be adjusted. I hope we can customize
indicators and analytical methods, but do it without a very professional
computer programming language. (Managerial accountant, tobacco company,
total assets between 10 and 50 billion RMB, using AI for 1-2 years)
Besides knowledge background and education, another factor that influences user
competence is whether employees are well prepared to adapt to AI from a psychological
perspective. Three respondents raised the concern that certain managerial accountants were
more aware of the importance of technologies, so they were self-motivated to learn AI;
however, others were not psychologically prepared. They were relatively pessimistic in
facing the changes in the accounting profession and believed that they were not able to adapt
to the new working environment. One manager stated:
Complete intelligence is what we want to pursue. We encourage young people
to learn more new technologies and participate in system development. But for
20
us, I hope I don't need too many operations, just give me the results I want.
(Manager, agriculture company, total assets between 10 and 50 billion RMB,
using AI for more than 2 years)
Therefore, companies should consider the strengths and weaknesses of employees and
provide fair opportunities for them to learn and use AI.
4.3. Long-term Impacts of AI on Employees and Organizations
4.3.1. Accessibility
Twelve respondents from client companies and five from SASAC agencies indicated a
certain degree of non-accessibility of AI. Three reasons were found that lead to non-
accessible AI. The first one is when AI systems are not user-friendly. For example, systems
are slow, information and results cannot be seen in time, or it is hard to search for desired
information. This can harm user autonomy when using AI, as managerial accountants cannot
operate AI in the way they want or obtain results they desire. Furthermore, using AI in
managerial accounting usually involves many customized settings in financial indicators,
rules, models, and presentation approaches. Customized settings usually require complex
interactions between users and AI systems or intensive programming skills, which makes AI
more difficult to use. It dramatically harms managerial accountants' autonomy when using AI
because they cannot freely analyze data in the way they intended. One respondent stated:
The report analysis and other indicators [in the system] should be more easy
to customize. (Managerial accountant, transportation company, total assets
The second reason is that AI does not change when accounting policies or the
environment changes, so its results are not valid in new situations. For example, companies in
China usually make adjustments of the previous year's financial data in March. If the data
used by AI are not updated accordingly, its results will be invalid for decision-making. One
respondent asked:
Our company's primary product [steel] is mainly affected by national policies,
trade, prices, and exchange rates. When accounting standards and the
environment change, how can we ensure the accuracy of AI models and
external data, and the accessibility and comparability of historical data?
(Accounting director, steel company, total assets between 50 and100 billion
RMB, in preparation of obtaining the AI system)
The third reason is that regulators cannot access AI systems. Five respondents from
SASAC all believed that regulatory agencies should have access to the AI system to facilitate
oversight of companies' operations. One respondent from SASAC stated:
21
I wish [the SASAC system] could be connected with enterprises' systems so we
can provide appropriate supervision. (Staff, SASAC)
In summary, non-accessible AI systems and data will obstruct users' autonomy of

choosing whether, when, and how to use the systems, which will reduce the value of AI.
Therefore, companies should review the accessibility of AI systems on a periodic basis and
collaborate with AI developers to remediate the risk.
4.3.2. Accountability When Using AI
The accountability of correctly using AI to provide useful results for managerial
accounting and decision-making should be shared among system developers, client
companies, managerial accountants, and regulators. Fourteen respondents from client
companies, three from SASAC agencies, and one from the AI company discussed this issue.
One director of the AI company stated:
Before signing contracts, project managers should participate and give
guidance on contract terms and system functions, project timeline, whether the
functions can be fully realized. Any unclear places should be clearly defined.
The contracts will clearly define the responsibilities of both parties [AI
companies and clients] in system demand investigation, development, trial
operation, promotion, liabilities during the first year when the AI software is
used, as well as later operation and maintenance. (IT director, AI company)
Managerial accountants' accountabilities mainly lie in correct operations of AI and

providing accurate inputs to the best of their knowledge. Four respondents mentioned that the
lack of users' responsibility would lead to poor system performance and results. One
respondent stated:
It is very important for managerial accountants to accurately report the
business reasons behind abnormal changes in financial indicators. If they do
not have a strong sense of responsibility, there will be a lot of false or
misleading reports. (Accounting director, steel company, total assets between
50 and 100 billion RMB, in preparation of acquiring the AI system)
To encourage employees to provide their best knowledge and judgment to facilitate AI,
one company developed an evaluation system to assess the quality of AI outputs based on
accountants' inputs. The system gave a score for each output, which was then used as a factor
in the performance evaluation of the accountants. One respondent from the company stated:
At first, the score is about 58 points out of the full score (120 points). [Later
on], the average score jumps to about 110 points. (Accounting director, steel
company, total assets between 50 and 100 billion RMB, in preparation of
acquiring the AI system)
22
Using such a reward mechanism, accountants are encouraged to actively engage in using
AI.
At the organizational level, strong corporate governance with clear ethical policies can
strengthen the self-regulation of managerial accountants. Five respondents indicated that
ethical policies would largely influence the effects of AI in managerial accounting. One
managerial accountant stated:
Before using the AI software, we saw good results [of the software] from other
companies. However, our company's policies and guidance are flawed, and
managerial accountants are not familiar with the software and have not paid
much attention to training, so its effect is still not visible. (Managerial
accountant, investment company, total assets between 100 and 300 billion in
RMB, using the AI system for 1-2 years)
Ethical policies could also be built into AI systems to force execution. For example,
management of accounts receivable involves participation from multiple departments, such as
accounting, sales, and after-sale service. To manage the responsibilities, one respondent
suggested:
The management of accounts receivable is not only the responsibility of the
accounting department. The responsibilities should be clearly set to each
participating department in accordance with the requirements of the internal
control process, and embed them into the AI system. (Accounting director,
food company, total assets between 50 and 100 billion RMB, using the AI
system for more than 2 years)
Three respondents from SASAC agencies believed that regulatory agencies should
provide sufficient support and supervision regarding AI use. One staff member from a
SASAC agency stated:
We hope that companies that use the system can manage risks more effectively.
If we can pass on successful experience to other companies, we are willing to
build such a platform. (Staff, SASAC)
In summary, to ensure that AI achieves good results in the long term and reduces
ethical risks, the AI company, client companies, managerial accountants, and
regulators should collectively carry responsibilities and establish an accountability
mechanism to supervise the use of AI.
4.3.3. Isolation
Isolation refers to the risk of increasing social isolation of individuals due to the use of
AI (Munoko, Brown-Liburd, and Vasarhelyi, 2020). Thanks to advances in technologies,
communications among people have been increasingly shifting from offline to online. Online
shopping and remote working with the help of AI and other technologies have become the
23
"new normal" for most people, especially during the COVID-19 epidemic, but meanwhile, it
causes social and psychological isolation of each individual (Qiu et al., 2020). Isolation due
to the use of AI may bring severe ethical risks to managerial accountants and managers. The
AI system in this study provides an online platform for managerial accountants and managers
to communicate regarding abnormal indicators. Managerial accountants identify abnormal
indicators and explain reasons behind them based on professional judgment and put the
reasons into the platform, based on which managers make decisions. This function eliminates
face-to-face meetings or phone communications among managerial accountants and
managers. However, six respondents were concerned that the isolated working could raise
new ethical risks. On the one hand, the system improved work efficiency. One managerial
accountant was very happy to state:
The convenient online communication makes me feel that I don't need to go to
the subsidiaries to conduct face-to-face inquiries, which saves me a lot of time.
(Managerial accountant, agriculture company, total assets between 10 and 50
billion RMB, using for more than 2 years)
On the other hand, several managers had concerns about the online communication. One
manager noted:
Everyone has moved to online communication. I looked at people around in a
year-end meeting in my company. They looked very familiar, but there was not
much communication between us. I knew those names but I could not link
them with the real people. (Manager, food company, total assets between 50
and 100 billion RMB, using AI for more than 2 years)
Those comments show that the isolated environment brought by AI could be either
beneficial or detrimental. For example, the online platform reduces personal connections
among managerial accountants, managers, and other employees and therefore reduces the risk
of hiding problems or collusion. It also makes the process more transparent because their
inputs are recorded on the platform. However, it is difficult for managers to fully understand
managerial accountants' capabilities, sense of responsibility, and understanding of business
through the online platform because they cannot gain insights through observations of tones,
gestures, face-expressions, and body language of managerial accountants during face-to-face
meetings, which may reduce the chance to discover flaws and fraudulent inputs from
managerial accountants.
To alleviate this problem, some companies include the submission time of analytical
reports, the level of details in analyses, risk descriptions and mitigating actions, and other
features of inputs from managerial accountants in their year-end performance evaluation.
24
Although the evaluation was designed to improve fairness, it created tension and discomfort
for managerial accountants, as stated by the following respondent:
On the day when analysis reports need to be submitted, I truly hope nothing
else is happening on that day. I hope that the system and computer can work
well and make no mistakes. I also hope that I don't miss the submission
deadline because of other things. (Managerial accountant, agriculture
company, total assets between 10 and 50 billion RMB, using for more than 2
years)

Everyone can see the score [of my report]. I always feel that I don't have any
privacy in front of my colleagues. (Managerial accountant, investment
company, total assets between 100 and 300 billion RMB, using AI for 1-2
years)
In summary, AI improves communication efficiency but may create an isolated

environment. To reduce the risks, on the one hand, sufficient training should be provided to
improve the skills, ethics, and sense of responsibility of managerial accountants. On the other
hand, face-to-face communication is still necessary to help managerial accountants fully
understand business and help managers know the capabilities and sense of responsibility of
managerial accountants.
4.3.4. Benefits and Challenges
Brougham and Haar (2018) predicted that one-third of jobs might be replaced by AI-
related technologies in the near future. Thirteen respondents raised the concern that the use of
AI in managerial accounting would also have such a side effect. On the one hand, it can
reduce workload in data collection, financial indicator creation, and analyses. On the other
hand, it creates new job requirements and challenges for accounting professionals.
Accountants nowadays are expected not only to master conventional managerial accounting
knowledge, but also to fully understand a variety of business processes and technologies.
Seven respondents mentioned that because of AI, management accountants should be more
familiar with business operations, four believed that the scope of managerial accounting had
been expanded, and two believed that AI created additional workloads. One respondent stated:
The company's requirements for us are not only financial data analysis, but
also operational analysis that integrates the company's engineering,
transportation, finance, real estate, and other diversified businesses. We must
not only find out the reasons for changes in financial indicators from the
business, but also comprehensively consider industry, market, and policies. It
brings higher requirements and challenges for our managerial accountants.
(Managerial accountant, urban construction investment company, total assets
between 50 and 100 billion RMB, in preparation of acquiring the AI system)
25
Furthermore, communication skills become very important when using AI. Nine
respondents believed that accountants needed to communicate with other business personnel
to understand the reasons for data discrepancies or abnormalities and to communicate with AI
developers to accurately express their needs. A respondent stated:
What I don't want to see is to only focus on accounting issues. I hope that the
analysis [from the AI system] can identify the business reasons behind the
accounting data. (Manager, securities company, total assets between 300 and
1000 billion RMB, initial inquiry of obtaining the AI system)
Communications are even more complex and important for conglomerate companies.
Managerial accountants in subsidiary companies must be very familiar with companies'
business and must adhere to objectivity and fairness when using AI to perform analyses.
Managerial accountants in headquarters, on the other hand, must make necessary review,
ensure the accuracy of analyses' results, and prevent misleading results caused by inaccurate
or insufficient analyses. Stated by an accounting director:
The specific data and specific reasons that really affect the fluctuations of
indicators should be filled in when managerial accountants from subsidiary
companies fully understand the business. However, they often have their own
tedious work. [Filling in reasons behind indicator fluctuations] adds
additional work and may make them opportunistic in reporting reasons, so
that authenticity of the reasons is greatly discounted. It requires managerial
accountants from parent companies to verify the authenticity of the reasons
one by one when necessary. (Accounting director, food company, total assets
between 50 and 100 billion RMB, using AI for more than 2 years)

Managerial accountants from subsidiary companies generally protect
themselves and their companies. When doing analysis, they don't talk about
the bad things, but only the good things, and they exaggerate the good things.
They say that gross profit has increased by 35%, but they do not say expenses
have increased by 23%, rather say they cannot find the reason [why the net
profit does not increase very much]. They avoid bad things, only talk about
good things. Therefore, managerial accountants from the parent companies
should also fully understand the business of subsidiary companies to avoid
being misled. (Accounting director, agriculture company, total assets between
10 and 50 billion RMB, using AI for more than 2 years)
In summary, AI may bring extra workload and new challenges to both managerial
accountants and managers. Therefore, companies should provide training to help managerial
accountants fully understand AI, improve their professional judgment, and strengthen ethics
to achieve trustable results.
4.3.5. Learning Curve
26
Respondents indicated that the difference in the competence, knowledge, and experience
of accountants in terms of using AI would result in different learning curves. Two
respondents mentioned that training should be tailored to accountants according to their
knowledge and experience. For example, professionals with more accounting but less IT
experience usually have more difficulty in understanding AI algorithms and learning complex
operations of AI systems, so they are expected to have a longer learning curve. Stated by one
respondent:
Analysis on operational data analysis is the key. We have experienced
managerial accountants, but long-term training is necessary for them to
understand operations of the AI system, models, and algorithms. (Accounting
director, investment company, total assets between 100 and 300 billion RMB,
Semi-automated analytical processes that require frequent inputs and judgments from
users are likely to make junior accountants feel less confident in providing accurate inputs, so
they need sufficient training and practice. A respondent stated:
The AI system should store the historical reasons for abnormal indicators to
guide young managerial accountants to fill in the reasons. (Managerial
accountant, pet food company, total assets between 0 and 10 billion RMB,
using AI for more than 2 years)
In summary, organizations should provide a variety of opportunities and tailor training

programs for accountants with different learning curves.
4.3.6. Power over user
Although some accountants are willing to adopt AI, their lack of experience and
knowledge may harm their autonomy when using AI. Five respondents mentioned that some
less-experienced accountants were very actively involved in the development,
implementation, and use of AI systems with high expectations and fast learning capabilities,
but such behaviors usually resulted in over-reliance on AI and impaired their professional
judgment. Two respondents admitted that they heavily relied on the anomalies reported from
the AI system. One managerial accountant stated:
Our managers and ourselves only care about indicators that are closely
related to our daily work, which are pushed to us through mobile phones and
the WeChat app. There is no need to look at the details [of the indicators] in
the AI system. (Managerial accountant, tobacco company, total assets
In the long term, such over-reliance will result in an exclusive focus on the abnormal
events identified by AI and ignorance of undetected factors, which forms an "information
27
cocoon" (Goddard et al., 2012). As many expert rules derived from previous analyses and
cases are pre-set in AI systems, changing environments and occasional events make those
rules less useful and therefore necessitate human participation and professional judgment in
decision making. The interview results also show that in general, senior accounting personnel
not only have the ability to adopt AI but also have the desired amount of work experience.
They are often unwilling to overly rely on AI and are aware that their independent judgment
may be impaired by AI, as stated by the following respondent:
We should not compromise our professional judgment to the results from
artificial intelligence in decision-making. (Senior accountant, agriculture
company, total assets between 10 and 50 billion RMB, using AI for more than
2 years)
One accounting director with rich experience in AI and accounting stated:

The function of the AI system is to provide early warning and support for
financial decision-making, rather than to be the decision-maker. (Accounting
director, investment company, total assets between 100 and 300 billion RMB,
In summary, less experienced accountants are likely to over-rely on results from

AI, which may impair their professional judgment. They will need help from senior
accounting personnel and sufficient training.
5. Discussion
5.1. Summary of Findings
Our results show that the ethical issues arising from using AI in managerial accounting
have the following characteristics. First, the complexity of managerial accounting systems
magnifies the impact of ethical concerns. Unlike ERP systems, AI integrates not only data
from multiple financial and operational systems, but also a variety of external data. As a
result, data security, privacy, and misuse issues become more prominent. Also, since AI
usually has customized modules, managers and users have doubts about the transparency,
reliability, and accessibility of such a non-standardized system. They also have concerns
about whether expert rules in AI will bring bias, misleading information, and over-reliance of
less experienced accountants on AI. Those concerns are much stronger for AI compared with
ERP systems. One reason is that AI is still an emerging technology that is not adopted by
managerial accounting as widely as ERP systems. Therefore, people are more concerned
about the side effects brought by AI. Another reason is that financial accounting processes
performed by ERP are restricted by accounting standards and relatively simple due to their
28
nature. However, managerial accounting focuses on decision-making, which is often
associated with subjective judgments and has a much higher requirement on users'
capabilities and accountability, so that it is more likely to cause ethical dilemmas. Moreover,
the usefulness of AI may also be reduced by incomplete business data and non-standardized
data structure, which makes the expectation gap even bigger. Second, the primary challenge
for managerial accountants is the difference between AI operations and their working
approaches. Managerial accountants should not only be familiar with AI system operations,
but also have a deep understanding of its algorithms and meanings of results, as well as
business operations. Since AI requires higher user capabilities, ethical risks become more
obvious for incompetent managerial accountants. When managerial accountants are not
competent to correctly use AI, managers should review the reported results to see if they
conform to real situations and avoid biases and misleading information. Third, due to AI, the
job scope of managerial accountants is shifting from data processing to using professional
judgment to perform diagnostic analysis of anomalous indicators. Traditionally, reasons
behind abnormal indicators are generally discussed through face-to-face meetings. AI
systems allow employees to accomplish most work online, which largely reduces face-to-face
interactions among employees and creates an isolated working environment.
One interesting finding is that although Al has ethical impacts on four types of
stakeholders, i.e., developers, managers in charge of AI adoption, managerial accountants,
and regulators, each of them have specific ethical concerns. Data security, privacy, and
misuse, accountability, accessibility, benefits and challenges, and transparency and trust of
AI are common challenges of which all stakeholders are aware. For the remaining ethical
challenges, the four types of stakeholders have different focuses. Regulatory agencies mainly
discuss monitoring of responsibility fulfillment, such as supervision of AI development and
use. To achieve this, AI should connect regulatory agencies with companies to promptly
collect key indicators from the companies and send alerts to regulators when anomalies are
detected. AI providers mainly focus on developing trustable AI, preventing biases from
passing to users, and increasing their competence in developing reliable AI. Common ethical
concerns addressed by managerial accountants and managers include identifying benefits and
challenges at the pre- and post-adoption stages, expectation gaps between before and after
using AI, bias in decision-making processes, result distortion, overreliance on AI, and
technical competence.
5.2. Suggestions for Avoiding Ethical Risks When Using AI in Managerial Accounting
29
To alleviate the ethical concerns and challenges shown in the interview results, we
identify the principles from the EGE and CAIGC's ethics statements that stakeholders should
follow to avoid harmful behaviors (shown in Table 3). Among the fifteen ethical risks, six of
them could be alleviated by the principle of fairness and justice (CAIGC) or justice, equity,
and solidarity (EGE): beneficiaries in the implementation of AI, bias, result distortion,
competence of users, benefits and challenges, and learning curve. Responsibility is also a
very important ethical topic. Related principles include shared responsibility (CAIGC),
responsibility (EGE), and rule of law and accountability (EGE). They could be used to solve
the ethical concerns of accountability in AI development and use, competence of AI
developers, and isolation. Ethical concerns that could be remediated by Autonomy (EGE) and
Safety and Controllability (CAIGC) principles mainly include expectation gap, transparency
and trust, accessibility, and power over user. Based on those principles, we suggest the
following approaches to avoid ethical risks in the development and use of AI in managerial
accounting.
5.2.1 Shared Accountability among Stakeholders
Accountability should be shared among stakeholders throughout the adoption and use of
AI in managerial accounting. System developers should strictly follow technical standards,
regulations, and codes of conduct and create reliable and trustable systems without biases,
perform only necessary analyses and avoid data repurposing, protect data security and
privacy, and provide users with necessary technical training. Managers should set up
appropriate policies for the implementation and use of AI, as well as establish codes of
conduct and monitoring mechanisms. Managers in charge of the purchase and
implementation of AI systems should also be accountable for making appropriate plans and
arrangements for the entire process and should coordinate and manage all stakeholders.
Managerial accountants should receive necessary training, especially regarding prevention of
ethical risks, before using AI and strictly follow ethical rules and codes of conduct during
use. Regulators should stipulate general ethical codes, norms, and practical guidance for AI
development and use. Furthermore, stakeholders should share the responsibility to eliminate
or mitigate ethical risks such as bias and result distortion caused by AI, as well as unethical
behaviors due to users' incompetence.
5.2.2 Communication and Feedback
Communication among system developers, managers, managerial accountants, and
regulators should occur throughout the entire System Development Life Cycle (SDLC)
(Mannino, 2005), from initial system analysis to implementation and use, as well as in update
30
and maintenance processes. For example, system analysts should engage in thorough
discussions with managerial accountants to identify any ethical risks that they may encounter
when using AI and inform developers. Test engineers should promptly report to developers
any ethical issues emerging in system testing. Furthermore, managerial accountants should
provide prompt feedback to managers about any ethical impacts when using AI, such as its
influences on user autonomy and result distortion.
5.2.3 Establishing a Monitoring Mechanism
For AI ethical issues such as data security, transparency and trust, bias, and accessibility,
regulators could establish an independent organization composed of technical experts,
ethicists, and senior accounting professionals to formulate technical standards, codes of
conduct, and ethical policies. This organization could also evaluate stakeholders' conformity
with the standards and policies. For example, one agricultural company in our interview
invited a third-party consulting agency to evaluate the results of its AI system after using it
for two years.
In the second half of last year, SASAC issued a document which required all
companies to invite an independent third party to evaluate risk management,
financial management, early warning, control and other related activities. We
invited a consulting firm to analyze the AI system, evaluating its operation and
effectiveness and providing suggestions to further optimize the system and
improve the level of risk management and control. This is very important for
us and the AI company to upgrade and optimize the system in the future.
(Accounting director, agriculture company, total assets between 10 and 50
billion RMB, using AI for more than 2 years)
This method could also be employed to evaluate whether system operations are in
compliance with ethical principles. Regulatory agencies should consider the ethical impacts
of AI when formulating standards and regulations and issue warnings to companies and
developers who disobey the regulations.
5.2.4 Education
Although topics regarding ethics are often introduced in the first class of an accounting
course, it has not commonly been built into the training programs of using AI in managerial
accounting. AI developers and users should undergo sufficient training on ethical issues in
addition to technical skills. For example, developers should be educated with data protection
policies and the features of AI algorithms to avoid biases. The managers in charge of system
acquisition should have a deep understanding of AI and its potential beneficiaries and victims
to make optimal decisions. Managerial accountants need to learn how to maintain
professional skepticism when using AI. A good training can improve the objectivity of AI,
31
reduce bias, and ultimately increase acceptance of the systems (Rikhardsson and
Yigitbasioglu, 2018).
5.2.5 Developing AI based on the "Ethically Aligned Design" Concept
The "ethically aligned design" concept, initiated by IEEE in 2015, aims to address
ethical issues in the development and use of AI and autonomous systems. Based on the
concept, ethical norms and legal constraints should be considered and followed throughout
design and implementation of accounting-oriented AI systems. In addition, such rules could
be converted into specific rules and embedded into AI systems to enable "self-discipline" of
the systems, to make behaviors of systems and users reliable and safe. For example, to
alleviate the risk of "power over user," AI systems should require a sufficient amount of user
interactions, such as providing reasons and suggestions on anomalies. The reasons and
suggestions from experienced accountants should be shared with less experienced
professionals to help them improve professional judgment.
6. Conclusions
Alles and Gray (2016) argued that technologies should not be used without questions
and skepticism. The ethical concern is one of the biggest challenges faced by stakeholders in
the development, implementation, and use of AI. Since AI is growing exponentially fast,
companies often have little time to consider ethical risks before adoption (Munoko et al.,
2020). This study provides insights to AI and accounting professionals, and the results can be
used as guidance to avoid ethical risks when implementing and using AI in managerial
accounting.
Through 47 interviews with companies adopting or using AI, an AI system developer,
and regulatory agencies, we discovered 15 ethical concerns stakeholders had at pre- and post-
adoption stages. At the pre-adoption stage, which is mainly regarding AI system investigation,
design, development, and implementation, our interview results show that the major ethical
risks include data security, privacy, and misuse, accountability, beneficiaries, and AI vendors'
competence. Since some of the impact of AI on managerial accounting and decision-making
can be observed immediately while others may be seen only after years of use, we further
identified challenges at the post-adoption stage from two perspectives: 1) ethical issues in the
use of AI and 2) long-term impacts of AI on employees and organizations. The first
perspective focused on how ethical risks may influence managerial accountants' behaviors,
such as gaps between user expectations of AI and actual use, transparency and trust of AI,
bias, result distortion, and user competence. These ethical risks may start from trial
32
operations of AI and continue throughout its use. As managerial accountants receive more
training and have more user experience, some ethical concerns may be reduced, such as
expectation gaps and user competency. However, other concerns may continue to exist, such
as bias, result distortion, and AI transparency and trust. Long-term impacts of AI on
employees and organizations also include AI accessibility, accountability of stakeholders
when using AI, isolation, benefits and challenges, learning curve, and power over user.
There are limitations to this study. First, all interviewed companies are clients of a
major AI vendor in China. Thus, the ethical issues identified in the study are limited to those
encountered when implementing and using the specific system. Future research could involve
conducting similar interviews on a larger sample size that includes clients of multiple AI
vendors in multiple countries. Second, since AI is still rapidly developing, more ethical issues
and challenges could emerge later as new algorithms and approaches are introduced. There
should be a continuity of research in this line to help prevent ethical risks and to protect the
rights of individuals, organizations, and society at large.
33
Acknowledgements
We thank the editor, Dr. Severin Grabski, associate editor, two anonymous reviewers, Dr.
Helen Brown-Liburd and Dr. Michael Alles from Rutgers University, Dr. Ivy Munoko from
University of Florida, and Dr. Lina Xu from RMIT University for their comments. We thank
Anhui Cnbisoft Software Technology Co., Ltd and all interview participants for their
collaboration.
34
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Table 1: Experience of Companies with the AI System
State-owned Private
Experience Type Total
Companies Companies
Initial inquiry 5 4 9
In preparation 10 3 13
Under implementation 5 1 6
Used for 1-2 years 7 3 10
Used for more than 2 years 2 1 3
Total 29 12 41
40
Table 2: Total Assets of Interviewed Companies9
Range (billion in Chinese Number of
Yuan Renminbi [RMB]) companies
(0，10) 11
[10，50) 14
[50,100) 6
[100,300) 6
[300,1000) 3
Unknown 1
Total 41
9
The total assets of companies are from their official websites, the annual reports of Shanghai Clearing House,
or the annual reports of Shanghai Stock Exchange.
41
Table 3: A Summary of Ethical Issues
Principles
Perspectives Ethical Issues Specific Ethical Impacts Passages Stakeholders
CAIGC EGE
Data Security, Harmony and
Companies worry about the security, privacy, and misuse issues in internal Data protection and
Privacy, and 32 All friendliness, respect
data, external data, and integration of internal data and external data privacy
Misuse for privacy
Developers choose unnecessary but novel algorithms which lead to
2 Developers
misleading results
Requirements and/ or preferences of managers influence the acquisition of
Accountability 12 Managers
AI. Rule of law and
in AI Shared responsibility
Users with negative attitudes towards the employment of AI in managerial accountability
Ethics Issues in the Development 3 Managerial accountants
accounting provide insufficient information to developers.
Implementation of AI
Regulatory agencies play an essential role in the supervision of AI
3 Regulators
development and implementation.
Managers, managerial Justice, equity, and
Beneficiaries Whether stakeholders can benefit from AI influences AI adoption. 12 Fairness and justice
accountants solidarity
AI developers should have strong technical and accounting background and Rule of law and
Competence Shared responsibility,
communication skills to develop trustable AI systems under controllable accountability,
of AI 5 Developers safety and
costs. security, safety, bodily and
Developers controllability
mental integrity
Expectation Users lower their expectations for AI after use. 2 Managers, managerial Safety and
Autonomy
Gap Human intervention and professional judgment are still necessary to use AI. 3 accountants controllability
Users doubt AI capability and worry that theoretical AI models may
Transparency Managers, managerial Safety and
encounter problems when analyzing real data and dealing with complex 12 Autonomy
and Trust accountants controllability
scenarios.
Managers, managerial Justice, equity, and
Bias AI algorithms pass experts' bias to managerial accountants. 4 Fairness and justice
accountants, developers solidarity
Ethics issues in the use of AI Result Result distortion occur due to inaccurate data input or models, or managerial Managers, managerial Justice, equity, and
3 Fairness and justice
Distortion accountants misinterpreting results for their own benefits. accountants solidarity
Certain employees are less willing to use AI because of outdated knowledge
background and education, difficulties in understanding advanced 3
algorithms, and unfamiliarity with essential IT functions.
User Justice, equity, and
Accountants are less competent when scripts (or command lines) are Managerial accountants Fairness and justice
Competence 2 solidarity
required to create customized functions.
Some employees are not well prepared to adapt to AI from a psychological
3
perspective.
Non-accessible AI systems and data obstruct users' autonomy of choosing Regulators, managerial
Accessibility 17 / Autonomy
whether, when, and how to use AI. accountants
Accountability
The accountability of correctly using AI should be shared among system Rule of law and
When Using 18 All stakeholders Shared responsibility
developers, client companies, managerial accountants, and regulators. accountability
AI
The isolated environment brought by AI could be either beneficial or
Long-term impacts of AI on Isolation 6 Managerial accountants / Responsibility
detrimental.
employees and organizations
Benefits and Justice, equity, and
AI brings new requirements and challenges for managerial accountants. 13 Managerial accountants Fairness and justice
Challenges solidarity
Learning Differences in the competence, knowledge, and experience of accountants in Justice, equity, and
2 Managerial accountants Fairness and justice
Curve terms of using AI result in different learning curves solidarity
Power over Over-reliance on AI impairs managerial accountants' professional
5 Managerial accountants / Autonomy
user judgments.
42
Appendix A
Core Technologies and Functions of the Intelligent Financial and Business Decision Support
System
Module Main Function Description Managerial Key Technologies and Methods
Accounting Tasks
Cash flow analysis,
Multi- dimensional data analyses are performed at ETL, intelligent data extraction,
income-cost-profit
department, company, and industry levels. Key OLAP, multi- dimensional data
analysis, budget
Smart financial indicators, budget usage, and abnormal display and analyses, visualization,
analysis, tax
management indicator changes are visualized through charts and speech recognition, intelligent
analysis, investment
tables. It also delivers customized information to interaction, intelligent result
and financing
Assisted AI: perform managers and managerial accountants. reporting
analysis
routinely tasks and describe
Creation of
current situations and It generates intelligent financial reports and
management reports
problems. management reports. It illustrates financial data changes including income,
operating costs,
and budget usage over time, and automatically ETL, intelligent data extraction,
expenses, and
Smart report generates summary of assets, income, costs, and performance OLAP, speech recognition,
expenses. It also enables data penetration and inter-table anomaly detection and reporting
data matching, and displays the reasons for abnormal
financial indicator changes.
It generates financial analysis reports, business analysis

Analysis of main
reports, and financial risk early warnings. Content in
financial reporting
those reports include analysis of major financial and indicators; business ETL, intelligent data extraction.
operation analysis;
operational indicators, operational analysis by industry decision tree, multi-factor analysis,
Report analysis cash flow analysis,
and product type, problem identification and expert budget analysis, intelligent interaction, anomaly
benchmarking
suggestions. It creates customized reports that are detection and reporting
analysis, tax
delivered to a variety of users through intelligent analysis, investment
Augmented AI: learn analysis
interactive technology.
models from data, analyze
causes of problems, and Association rule mining, decision
Intelligent It performs financial, operational, and performance Profit forecast, cost
predict future trends. tree, multi-factor analysis,
prediction analyses and forecast. forecast, capital
predictive modeling
structure forecast
External data crawler, ETL,
It creates intelligent models based on historical budget Budget intelligent data extraction, analytic
management,
Warnings and data and industry data to setup thresholds for key hierarchy process, comprehensive
benchmarking
risk financial indicators. Indicators with values that exceed management, risk financial warnings, intelligent
management
management the thresholds are treated as risk points and warnings interaction, natural language
are sent to managers. processing, duplicate detection,
risk identification
43
Appendix B
Interview Questions Related to Ethical Issues
Perspectives Stakeholders Questions Ethical Issues
What were your plan and thoughts in the implementation of AI in

managerial accounting and decision-making? Did you expect any
impacts on other departments?
Managers Accountability
Did you have a clear understanding and requirements for the AI
system? What are the requirements and preferences when choosing the
vendor?
Managers, What internal and external data were integrated into the AI system?
Data Security, Privacy, and Misuse
Managerial Were there data security or privacy issues?
Ethics Issues in the accountants Did the top management support the AI system implementation? Beneficiaries
Implementation of AI When communicating with your clients, what were their attitudes
Accountability
towards the AI system?
How did you define the scope and choose the functions of an AI Accountability, Data Security, Privacy, and
Developers
system? Were there data security or privacy issues? Misuse
How did you manage your system development team? How did you
Accountability, Competence
ensure that they embedded appropriate algorithms in the systems?
What were the advice you gave to companies which intended to adopt
Accountability
Regulators AI?
Were you aware of any data security or privacy issues? Data Security, Privacy, and Misuse
What are the expectations for the use of AI in managerial accounting
Expectation Gap
and decision-making?
Do you understand expert rules and AI algorithms, especially their
Transparency
logic and principles behind the analysis results?
Managers, Do you think the AI algorithms in the system can solve your
Trust
Ethics issues in the use Managerial problems? Are they trustworthy?
of AI accountants What are the problems do you think exist in the AI system (e.g.,
Bias, Result Distortion
effectiveness of algorithms, bias, result accuracy and distortion...)?
Do you use AI in your work? Have you already adapted to the changes
that AI brings at both technical and operational levels? How do you Competence
handle the problems?
Developers How do you avoid technical risks (e.g., ineffective algorithms, bias)? Bias
Managers, Who is accountable for the use of AI, and in what way? Does your
Managerial company establish a mechanism to track accountability when using the Accountability
accountants AI system? If so, how does it work?
Do you think the AI system is useful? Does it help you? Do you feel
Accessibility /Benefits and Challenges
uncomfortable with it? Does it increase your workload?
If the system results are different from your expectations and
judgments, what will you do? Do you choose to believe in the system Power over user
or stick to your own judgment?
Can you work remotely and interact with your colleagues online using
Long-term impacts of Managerial
the system? If so, does it reduce the opportunities for face-to-face Isolation
AI on employees and accountants
communication?
organizations
What are the challenges do you face now compared to before using the
Benefits and Challenges
system? Which new roles should you adapt to?
In order to better use AI to assist decision-making, what areas do you
think you should improve? What kind of training do you wish to be Learning Curve
provided?
Developers What services will be provided after the system is applied?
What are the focuses when you supervise companies using AI? What
Accountability
Regulators issues should be paid attention to in the promotion of AI in managerial
accounting?
44
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Ethical impact of artiﬁcial intelligence in managerial accounting

Article in International Journal of Accounting Information Systems · March 2023

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Recent advances in technology have accelerated digitalization and intelligence in

Keywords: Artificial intelligence; AI; managerial accounting; ethical impact; ethics

2.1. Artificial Intelligence (AI)

2.2. Managerial Accounting

He emphasized that data provided by AI systems must be legal to use; otherwise, he

A similar statement was made by another accounting director:

Managers have diverse requirements and preferences when acquiring AI due to

As a result, they were actively involved in communications with AI developers and

A project manager of the AI company stated:

In private enterprises, identifying beneficiaries is even more critical. For example,

In summary, companies should carefully consider all stakeholders' interests when

Another respondent believed that technical personnel with accounting backgrounds

In summary, developers' competence is a major ethical concern of both AI companies and

In summary, the gap between expectations of managerial accountants and AI

Another respondent stated:

A similar comment was:

Understanding basic database functions and SQL statements are necessary to

In summary, non-accessible AI systems and data will obstruct users' autonomy of

Managerial accountants' accountabilities mainly lie in correct operations of AI and

Another respondent stated:

In summary, AI improves communication efficiency but may create an isolated

Another respondent stated:

In summary, organizations should provide a variety of opportunities and tailor training

One accounting director with rich experience in AI and accounting stated:

In summary, less experienced accountants are likely to over-rely on results from

It generates financial analysis reports, business analysis

What were your plan and thoughts in the implementation of AI in

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