Ep. 23: Lorenzo Patelli - AI and Its Ethical Considerations

Contact Lorenzo Patelli:
LinkedIn - https://www.linkedin.com/in/lorenzo-patelli-2abb518/
University of Denver bio - https://daniels.du.edu/directory/lorenzo-patelli/

Daniels College of Business: https://daniels.du.edu/
Institute for Enterprise Ethics: https://daniels.du.edu/iee/

FULL EPISODE TRANSCRIPT

Adam: (00:00)

Hey everybody. Thank you for listening to another episode of Count Me In. I'm Adam Larson sitting alongside Mitch Roshong and our expert guests for this episode is Lorenzo Patelli. Dr. Patelli, is an associate professor in the school of accountancy and interim director of the Institute for Enterprise Ethics in the Daniels College of Business at the University of Denver. He joined us on count me in to talk about the fascinating intersection of artificial intelligence and ethics. Mitch, can you tell us a little more about Dr. Patelli And his expertise in AI and ethics? 

Mitch: (00:37)

Sure, Adam. Lorenzo Patelli also serves on the editorial board of advances in management accounting and has received a number of awards and honors for his teaching excellence in research. He was recently a part of the elevate the ethics of artificial intelligence event at the University of Denver and regularly writes on the topic. Dr Patelli gives listeners a great overview of AI and tells us all why management accountants have the skills necessary to effectively manage the ethical implications of artificial intelligence. Let's go to the discussion. 

Mitch: (01:08)

Artificial intelligence is certainly becoming more pervasive in accounting and finance today. Can you please give us an overview of what exactly artificial intelligence is and what it can do for us? 

Lorenzo: (01:26)

Sure. Artificial intelligence is a field of computer science, particularly this field is concerned with empowering machines to think, behave and act like a han beings. In other words to make sure that machines have intelligence. Yeah. So several different technologies are developed to replicate the han senses and the ability to draw a conclusion or make judgments based on on the census. So for example, humans are able to talk and artificial intelligence develop develop speech recognition tools. Humans are able to move in artificial intelligence, develops motion planning tools through robotics, for example. Humans are able to see, and artificial intelligence develops computer regions. Humans are able to learn from experience. So artificial intelligence develops machine learning. So how does artificial intelligence and how does as computer science develop this technologies? They use different techniques, such as reinforcement learning. So machines learns from executing tasks and make mistakes and so for example, the LinkedIn notifications that we get from like a website like LinkedIn, a social network lately are based on reinforcement learning. So if we pay attention to this notifications or not it's something captured by the machine and it triggers a learning process. Another technique is deep learning and deep learning has to do with artificial neural networks that are meant to replicate the human brain. So there is one input and one output with multiple hidden layers in between in some advance search engines, are based on this technique. Then we have machine learning and the ability to learn from data without being programmed. So there is a training process where we give data to the machine and the machine is trained and that machine is capable of predict. So Google, Gmail or the automated responses that we, use, you know, or texting for example on our smart phones those are based on versions of machine learning. As I said, then we have computer visions and computer vision tools enable autonomous vehicles for example, to capture and understand the surrounding or facial recognition on our game and our phones and finally we have a natural language processes and with this machine so capable to understand and react to human language. So Alexa or Siri are technologies that we use base on NLP. So this, these all these techniques basically in this this methods are used by artificial intelligence to empower machine to examine a phenomenon and initiate a response based on the analysis of if not. 

Mitch: (05:09)

And with all of these capabilities, can you explain how AI has already started playing a role in accounting and finance? 

Lorenzo: (05:15)

Yes. well, specifically management accounting is the practice of judging organizational performance judging, meaning measuring, reporting and interpreting factors that indicate whether an organization is creating good destroying value. So at least in theory, artificial intelligence has and will have their remarkable impact on our profession. because exactly, we deal with analyzing a phenomenon and producing your response, judging it, but also practically, we know that in management accounting is practice relying on machines, databases and these machines nowadays deal with the large quantity of data in complex environments in which processes and products themselves will more and more run on artificial intelligence. So my view is that artificial intelligence will have a huge impact on accounting and finance. we know that companies that are already using some artificial intelligence techniques like bots and machine learning to enter data we know that bots are able to enter and categorize data you fully automated way. We know that something like reinforced learning is assisting companies in internal audit tasks to detect fraud and compliance issues. We know that companies are using language processing techniques to interpret contracts and we can even speculate further and imagine a performance measurement system completed a design based on metrics defined by machine learning techniques. We can again imagine initial iteration of budgets prepare through deep learning and we can envision performance reports and feedback processes, obtain through, language processing techniques. So the impact is going to be a significant and it's going to be a widespread in term of the type of companies who, which are going to be affected and the areas within the companies that are going to be affected. 

Mitch: (07:45)

Now I know another major component of accounting is ethics. So I'm just curious, in your opinion, how do we separate the opportunities from the threats of artificial intelligence when it comes to the ethical application and potentially the negative effects of artificial intelligence and machine learning? 

Lorenzo: (08:05)

Yeah, that's, that's a very, very important question and a strategic finance ad published few interesting pieces on this topic. As far as I see it it's important in first of all to have a framework to look at this issue. And I grew up the unintended consequences of AI in five major buckets. The first one is the impact on work we do know that professions are going to be disrupted and jobs would be lost and economies are actually debating whether artificial intelligence, different from technologists in the past are going to create jobs or destroy jobs primarily. So it's an interesting issue from an economic standpoint and it definitely poses some ethical considerations. The second bucket is inequality. I'm not the of...