Can ChatGPT answer your clients’ questions?

AI such as ChatGPT is changing the world as we know it. As a practitioner, can it help you better serve your clients, support your staff, and prepare you and your practice for the future? Let's first take a look at what ChatGPT is as we attempt to answer these questions. We will then provide an example of a conversation between this powerful AI chatbot and a hypothetical client and let you be the judge.

Natural language processing (NLP) researchers have created chatbots and conversational AI systems such as ChatGPT to deliver more "human" responses to human prompts. These tools are based on enormous datasets.

ChatGPT can answer technical tax questions, draft letters and responses, generate contracts, and suggest checklists. It can also answer CPA Exam questions, produce social media posts, and "brainstorm" ideas you can use as a springboard. It can be an amazing time saver. ChatGPT's responses are almost instantaneous. It can also remember previous responses and build off of suggested modifications, enhancing previous replies.

ChatGPT has many potential applications for accountants, like writing Microsoft Power BI formulas, VBA code, and DAX. It can produce invoice, contract, and audit report templates and summarize financial reports. ChatGPT can also help accountants analyze large amounts of financial data to reveal trends, patterns, and anomalies, helping accountants spot risks and opportunities. Based on historical data, ChatGPT can also predict trends and financial outcomes.

Even if you are not currently using ChatGPT, your clients, staff, and colleagues likely are, so you need to understand the potential pros and cons of this powerful and pervasive tool.

ChatGPT has great promise but must be used with caution: Not everything it produces is accurate.

ChatGPT generates responses based on words a user inputs and then uses those words to project a conversational answer using related words that it finds in its dataset. This can lead to some very interesting — and incorrect — responses. For example, one of this article's authors submitted questions from his accounting exam into the tool, and a 46% grade was the result, even though the average score for live test takers was almost 84%. Stack Overflow, a Q&A sharing site for programmers, has gone so far as to ban ChatGPT-generated code because of the potential for errors.

In another example of AI's fallibility, a recent live publicity effort by Alphabet/Google introducing its new Bard AI system went horribly wrong when it gave a wrong answer related to the James Webb space telescope. The company lost 10% in stock valuation (over $100 billion in market value) that day.

This tool also reflects the biases of the datasets it is based on and does not provide the sources of its data. Companies have already filed lawsuits seeking compensation for data they claim belongs to them that was used by the AI platform.

Additionally, the dataset ChatGPT uses is fixed, with the latest information coming from 2021 or prior. As an example, it has no knowledge of Russia's invasion of Ukraine. More significantly for CPAs, it is not familiar with tax law updates (subsequent to 2021) or recent stock market activities.

Some early adopters of ChatGPT assert that it may make certain professions related to content creation, such as programmers, professors, and journalists, obsolete. Are CPAs at risk? How well can ChatGPT answer clients' questions? We ran a small experiment to find out.

An article on key questions clients should ask their CPA was published on TheStreet financial news and financial literacy website. On Feb. 4, 2023, we posed two of those questions to ChatGPT to see how it would do. Let's look at the results.

Q: Should I itemize my deductions or take the standard deduction?

A: The decision on whether to itemize your deductions or take the standard deduction depends on several factors. If the total of your itemized deductions, such as mortgage interest, state and local taxes, charitable contributions, and medical expenses, among others, is greater than the standard deduction for your filing status, then you should itemize your deductions. If the total of your itemized deductions is less than the standard deduction, then it would be more advantageous for you to take the standard deduction.

It's important to note that the standard deduction has increased since the Tax Cuts and Jobs Act of 2017, which may make it more beneficial for you to take the standard deduction instead of itemizing your deductions. Additionally, it's recommended to consult a tax professional or use tax preparation software to determine the best option for your specific tax situation.Top of Form

Q: What deductions or credits are available that I may be missing?

A: There are many deductions and credits that you may be eligible for but are missing, as many taxpayers are unaware of all the tax benefits available to them. Some common deductions and credits that you may be missing include:

It's important to keep accurate records and receipts of all your expenses throughout the year to ensure you claim all the deductions and credits you're eligible for. It's also recommended to consult a tax professional or use tax preparation software to determine which deductions and credits you're eligible for.

As can be seen from the above experiment, ChatGPT's responses are often inadequate — rather than being insightful, they are overly superficial and neglect important details. To implement the suggestions, a client would still need professional assistance. Although ChatGPT is an invaluable resource for offering fundamental direction and information, it is not a suitable substitute for the CPA's professional expertise. Clients may think AI chat platforms are all-knowing, but it is your job to help your clients understand their appropriate, and inappropriate, use.

In March, OpenAI released version four of ChatGPT, which reportedly uses 1 trillion parameters, or six times more data than version three, and competitors are not sleeping on their prospects. Alphabet/Google has Bard and two other platforms still in development. Meta/Facebook, along with Amazon and IBM, has its own initiatives, and many private companies beyond the majors have viable offerings.

This is just the beginning. Although OpenAI announced that GPT-5 is not expected in the immediate future, with the abundance of vendors jumping into the space, new challenges and opportunities will not be in short supply. Hang on for the ride.

— Scott Dell, CPA, DBA, is an assistant professor of accounting at Francis Marion University in Florence, S.C. Mfon Akpan, CGMA, DBA, is an assistant professor of accounting at Methodist University in Fayetteville, N.C. To comment on this article or suggest another article, contact joaed@aicpa.org.

Best No-Exam Life Insurance Of June 2023

A no-exam life insurance policy may not be able to provide the full coverage amount you need, especially if you’re looking to cover many working years or the years of raising a family.

Before you start getting life insurance quotes, calculate how much life insurance you need. A no-exam policy alone may not be able to provide sufficient coverage.

Getting life insurance without a long application process is appealing, but don’t jump into a no-exam life insurance application without understanding your chances of getting approved. Many no-exam policies require very good or excellent health for approval. A denial goes on your insurance record and could hinder future applications.

Don’t be surprised if you end up doing a more traditional application process, including a life insurance medical exam if you’ve had some health issues.

Of course you don’t want to overpay for life insurance, but research more than cost. There are coverage options that can be very valuable long after you buy the policy, such as the option to convert term life to permanent life insurance. Also, look at whether there’s an accelerated death benefit, which gives you access to money from your own death benefit if you become terminally ill.

No matter what type of life insurance you’re applying for, be thorough and truthful on the application.

“Pay attention to each question carefully and be ready to respond with information around specific medical conditions you have. Giving more detailed information will help streamline the process as well as get a more accurate underwriting decision,” says Tavan of Legal & General America.

Intentional misrepresentations can lead to application denials or, worse, denial of a claim after you pass away. Life insurance companies have many ways to verify application information. Technology on the backend allows them to verify data from additional sources.

If the company rejects you for no-exam life insurance because of your health, don’t give up your life insurance search. If you need life insurance, you likely have other routes.

Looking for traditional term life insurance? See Forbes Advisor’s ratings of the best term life insurance.

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