Unimpeachably Neutral Professional Judgment
Is AI the Death of Professional Judgment or its Reincarnation
Only with careful oversight and the application of seasoned professional judgment can AI deliver results that are not only accurate but also defensible and unimpeachably neutral. This article in the Unimpeachable Neutrality Series explores the indispensable role of professional judgment, particularly as it intertwines with the capabilities of AI.
The advent of artificial intelligence (AI) has brought a seismic shift to the field of valuation and forensic accounting. Data that once required weeks of meticulous analysis can now be processed in mere minutes. While AI’s outputs relative to financial modelling can be impressive, their reliability hinges on the neutrality and integrity of the inputs, assumptions, and parameters fed into them. Only with careful oversight and the application of seasoned professional judgment can AI deliver results that are not only accurate but also defensible and unimpeachably neutral.
AI’s strength lies in processing vast datasets and identifying patterns with incredible speed. However, it cannot replace the nuanced professional judgment required to interpret these results in context. The challenge lies in blending AI’s efficiency with ethical and contextual expertise; a process that remains distinctly human. This article in the Unimpeachable Neutrality Series explores the indispensable role of professional judgment, particularly as it intertwines with the capabilities of AI.
Define Professional Judgment
Professional judgment plays a vital role in refining not only AI’s input but also its output. Without applying professional judgment and a supervisory level of scrutiny, even the most advanced AI systems can falter in delivering reliable insights. So, what is “professional judgment”?
Professional judgment is a dynamic and multifaceted discipline, representing the intersection of specialized knowledge, technical skills, practical experience, and ethical considerations. It is the art of applying these elements, guided by professional standards, laws, and ethical principles, to navigate complex and nuanced situations effectively. Exercising professional judgment involves not only defining objectives and solving problems but also interpreting results, establishing guidelines, and providing well-reasoned recommendations or decisions.
At its core, professional judgment is characterized by its adaptability, requiring professionals to weigh contextual factors, balance competing priorities, and address ambiguities inherent in real-world scenarios. This process often demands a blend of personal attributes—such as critical thinking, integrity, and impartiality—with a deep understanding of technical frameworks and industry norms.
Professional judgment is about more than just knowledge or compliance; it is the thoughtful integration of expertise, ethics, and situational awareness to craft solutions and opinions that are not only technically sound but also practical and defensible. It is this balance that ensures decisions are tailored to serve clients’ best interests while upholding the principles of fairness, transparency, and accountability. It is not merely the mechanical application of standards or guidelines; it is the thoughtful integration of expertise and ethics to craft solutions that are defensible and tailored to specific circumstances.
Professional judgment transforms data and analysis into actionable insights. It is this fusion of technical precision with ethical and contextual awareness that ensures conclusions are not only technically sound but also equitable and transparent.
Judgy AI
AI is like a kitchen blender. When used correctly, it is a fantastic tool for saving time and producing great results. But much like a blender, AI relies entirely on the quality and quantity of its ingredients. The wrong inputs—biased data, flawed assumptions, or incomplete information—may yield something that looks great on the surface but leaves a sour taste upon closer examination. Imagine a beautifully smooth concoction that turns out to be equal parts vinegar and hot sauce. A little too much chili pepper can make an otherwise zesty treat into a trip to the emergency room. In some ways, making such a mistake, where you added a “bam” of chili pepper when you should have added just a half of a dash instead, is how one should view the danger of unintentional biases when AI is left to play judge, jury, and executioner. In fact, you may have forgotten, but AI’s potential to reflect and amplify unintentional biases is well-documented. From chatbots generating offensive remarks to algorithms perpetuating inequities in hiring or lending, history has shown that AI outputs are only as neutral as the data and programming behind them.
This underscores a critical lesson for experts: unimpeachably neutral outputs require unimpeachably neutral inputs, assumptions, parameters, and, yes, even prompts. In valuation and forensic accounting, this means meticulously vetting datasets for bias, defining parameters clearly, and crafting prompts that align with ethical and professional standards. Moreover, professional judgment must be deployed from beginning to end and is even more critical in the age of AI.
Redefine Professional Judgment
So why not just give up on humans and simply create a professional judgment algorithm? Ok, let us go there using the persona of C. Zachary Meyers, CPA, CVA. Creating an algorithm for professional judgment is theoretically possible, but it faces significant challenges due to the inherently human elements of judgment, such as ethical reasoning, contextual nuance, and adaptability to unforeseen circumstances. However, algorithms can be and are best designed to support professional judgment rather than replace it. While an algorithm can assist professional judgment by providing structured analyses, insights, and recommendations, it cannot fully replicate the nuanced, ethical, and contextual reasoning that defines human judgment. Instead, the ideal use of such algorithms lies in creating a symbiotic relationship where they enhance the efficiency and objectivity of professionals while leaving the ultimate decisions in human hands.
The Delta of Professional Judgment and AI
AI excels in processing vast datasets, spotting patterns, and suggesting statistically sound outcomes. But those outcomes are only as good as the context provided by the expert using them. Here are some key areas where human professional judgment intersects with AI:
- Reliability of Inputs: AI algorithms are only as effective as the data they analyze. Experts must exercise judgment in selecting inputs that are relevant, reliable, and free from bias. For instance, when evaluating a business’s future performance, it is not enough to rely on historical financials. An expert must assess qualitative factors, market disruptions, regulatory changes, or management turnover; that AI might overlook.
- Fuzzy Math: AI can calculate discount rates or project cash flows with remarkable precision, but it cannot judge whether those figures align with economic realities. A hypothetical AI model might suggest a valuation based on a booming market that is poised for correction. The human expert must step in to temper AI’s optimism with a dose of practical skepticism.
- Judging the Unexpected: AI operates within predefined parameters and assumptions. When the unexpected occurs—a global pandemic, for instance—AI tools struggle to adapt. Professional judgment is critical in interpreting results, recalibrating assumptions, and explaining deviations to stakeholders.
The connection between unimpeachable neutrality, professional judgment, and bias mitigation forms the cornerstone of ethical and effective AI usage in professional fields. Unimpeachable neutrality demands that conclusions and recommendations are free from undue influence, bias, or partiality; principles that professional judgment must uphold, even when leveraging AI tools. By embedding unimpeachable neutrality into professional judgment, experts can ensure that the incorporation of AI serves as an enhancement rather than a compromise.
How to Deploy Professional Judgment and Bias Mitigation Using AI
Professional judgment serves as the critical lens to scrutinize AI data, assumptions, inputs, and outputs for neutrality, ensuring fairness, inclusivity, and ethical integrity. Three key practices where one can and must deploy professional judgment as a means of mitigating bias when using AI include:
- Bias Mitigation:
- Select diverse and reputable data sources, auditing regularly to identify and rectify skewed representations.
- Use AI auditing tools to detect biases and preprocess data by normalizing and removing outliers.
- Contextual Interpretation:
- Analyze AI outputs with awareness of algorithmic limitations and potential biases.
- Adjust parameters and methodologies to ensure relevance and ethical soundness.
- Validation and Oversight:
- Validate AI outputs against traditional methods like income, market, or asset-based approaches, explaining and reconciling discrepancies.
- Employ human oversight, including peer reviews and expert panels, to ensure neutrality in critical, high-stakes decisions.
By integrating professional judgment, experts mitigate biases, maintain neutrality, and uphold credibility in AI-driven analyses
Professional Judgment Reincarnated
AI is not the death of professional judgment; it is its reincarnation. Rather than erasing the need for professional judgment, AI amplifies the need for it. Like a phoenix rising from the ashes, professional judgment evolves with AI, transforming into a more efficient, precise, and informed process. AI does not strip away the artistry of judgment; it provides the palette for painting an even more vivid picture of analytical rigor.
This symbiotic relationship allows AI to handle grunt work while humans remain the ultimate arbiters of ethical, practical, and nuanced decision-making. By blending AI’s efficiency with the nuanced understanding that only humans provide, experts can deliver insights that are both rigorous and relatable.
On balance, AI will not and should not replace expert witnesses; it must merely augment their capabilities. By blending AI’s efficiency with the nuanced understanding that only humans provide, experts can deliver insights that are both rigorous and relatable. As we navigate the era of AI, the role of professional judgment becomes more critical than ever. It is the anchor that keeps us grounded in ethical and contextual analysis, ensuring that our expert opinions and testimony remain unimpeachably neutral.
Zachary Meyers, CPA, CVA, is the managing member of C. Zachary Meyers, PLLC specializing in litigatory accounting and valuation services. He has been retained in over 2,900 matters since 2011, as a testifying expert, consulting expert, or neutral/court appointed expert qualified in forensic accounting, business valuation, pension valuation, and taxation. Mr. Meyers has held multiple influential roles on national and international standard setting bodies, where he has made significant contributions to the financial disciplines at the highest levels of the National Association of Certified Valuators and Analysts (NACVA), Global Association of Certified Valuators and Analysts (GACVA), and The Appraisal Foundation (TAF).
Mr. Meyers can be contacted at (304) 690-2619 or by e-mail to czmcpacva@czmeyers.com.
