We all know about AI, but we are on a constant learning curve with AI in the accounting and finance industry and it's an ongoing undertaking to keep up with new developments in this quickly evolving area. One of the latest acronyms in the AI realm is RLHF. But what is it, and why is it important that we know about it as accountants?
RLHF (Reinforcement Learning from Human Feedback) is a machine learning technique used to fine-tune AI models by incorporating human preferences. It typically has a three-step approach:
1. Pretraining the AI model
- To start with, a large AI model is trained on a huge amount of text data using supervised learning which allows the model to learn language structure, facts, and general knowledge.
2. Collecting human feedback
- Humans provide feedback on the model's response and typically, they rank multiple AI-generated responses based on clarity, helpfulness, safety, and other factors.
3. Training a reward model
- The ranked responses are used to train a reward model that predicts human preferences and this model learns to assign a numerical score to new responses, simulating human judgment.
This RLHF training approach can be applied in accountancy to improve financial automation, fraud detection, and compliance monitoring. For example:
Automating financial decision-making
- RLHF can be used to fine-tune AI models that help with financial reporting, risk assessment, and tax optimisation.
- Accountants provide feedback to improve AI recommendations for categorising transactions or predicting cash flow.
Fraud detection and anomaly identification
- AI models trained with RLHF can recognise fraudulent patterns in transactions with more accuracy.
- Human auditors provide feedback on identified transactions, helping the AI refine its detection strategies.
Regulatory compliance and auditing
- AI can monitor compliance with accounting standards (e.g. IFRS, GAAP) by analysing financial statements.
- RLHF ensures that the AI adapts to new regulatory requirements through human corrections and feedback.
Tax optimisation and strategy recommendations
- AI can suggest tax strategies, and accountants can refine its understanding through RLHF to improve accuracy.
- Helps businesses minimise liabilities while staying compliant with tax laws.
Client advisory and financial planning
- AI can help accountants with making investment and budget recommendations.
- Human feedback ensures that AI-generated financial plans align with industry best practices and client goals.
So, RLHF is an interesting development because it allows AI models to align more closely with human values, preferences, and intentions. When using this to enhance our roles in the accounting world, as with any new development, we need to adhere to ethical implications when thinking about this approach.
Check out all of our verifiable CPD for accountants on AI here!
You need to sign in or register before you can add a contribution.