Bringing AI into tax and accounting safely

AI is no longer on the horizon—it's embedded in the daily workflow of the accounting profession. According to recent findings from the Thomson Reuters Institute, nearly half (47%) of tax firm professionals report feeling excited or hopeful about GenAI’s potential for transformation.

Generative AI isn’t just about automation. By mimicking human thinking, this technology is reshaping accuracy, efficiency, and the depth of insights available to professionals (report link). But for every promise GenAI offers, practical hurdles require thoughtful planning and robust oversight.

How GenAI is changing tax and accounting

GenAI tools are making their mark across multiple facets of accounting and tax work. The technology is already proving effective in:

• Accounting and bookkeeping tasks (84%)
• Tax research (84%)
• Tax return preparation (69%)
• Tax advisory services (67%)

These use cases highlight how GenAI dramatically reduces manual input errors while freeing professionals from repetitive work—allowing more focus on analytical and advisory roles. As one US accountant reflected: using AI for "boring or mundane tasks" opens up time for higher-value activities like cashflow forecasting or interpreting financial statements. With growing adoption, personalized client services and deeper business insights are becoming more achievable every day.

Challenges firms face with GenAI adoption

Despite clear momentum, the road to widespread GenAI use is lined with real concerns. According to the 2024 Generative AI in Tax Firms report, the most significant barriers include:

• Potential for inaccurate responses (68%)
• Data security concerns (65%)
• Ensuring compliance with laws and regulations (59%)

These worries are not academic; they reflect meaningful risks to firms—ranging from inadvertent mistakes to the loss of client trust or exposure to breaches. US tax professionals highlighted the unique dangers of general AI guidance being applied indiscriminately and the urgent need for adequate safeguards around personal information. As regulatory environments and client expectations evolve, meeting both accuracy and privacy demands grows ever more complex.

Tackling GenAI risks with practical strategies

Integrated, safe GenAI practices require multi-pronged solutions, focusing on four essential areas:

1. Accuracy and reliability

• Dedicated training is underdeveloped: Only 14% of firms report providing internal education on GenAI use. Structured programs help staff recognize where and how to oversee AI-generated results effectively.
• Hybrid workflows add safety: Regular human oversight guarantees contextual accuracy, especially in nuanced professional decisions.

2. Data security and privacy

• Following best practices for security is key, including measures such as encryption, secure storage, and access controls. Well-known certifications bolster confidence in these processes.
• Educating clients about professional solutions—versus open-source AI—can help reinforce privacy safeguards.

3. Compliance and regulations

• Clear, up-to-date policies for GenAI use are crucial and should be reviewed as legal standards evolve.
• Tools should always leverage trustworthy, vetted data sources to reduce compliance risks. More on the challenges and best practices for AI integration in accounting can be found in this white paper.

4. Ethics and professional roles

• Ongoing communication reassures professionals that AI supplements—rather than supplants—expertise, directing attention to high-value, strategic client service tasks. This is explored in detail in reports on the future of accounting advisory.
• Emphasizing job augmentation, not replacement, supports team engagement and buy-in for new technologies.

AI-powered tools and their firmwide benefits

Effective GenAI solutions deliver more than just time savings. Professional-grade tools, grounded in authoritative guidance and trusted sources, help automate the routine to create space for complex analysis. They also:

• Support compliance with industry regulations
• Enhance firm-wide data analysis capabilities
• Empower professionals to deliver actionable, strategic insights

For teams looking to benchmark progress or explore how AI is shaping perceptions across the industry, visit the 2024 Generative AI in Tax Firms special report.

Steps to future-proof your firm with AI

Staying ahead isn’t just about adopting the newest tools—it's about embedding AI responsibly into the organization. Commitments to human oversight, security, and thorough training play a critical role in risk mitigation. Thoughtfully applied, GenAI allows teams to concentrate on what matters most: high-value client work, strategic advice, and building the resilience necessary for future challenges. As approaches mature, maintaining client confidence and regulatory compliance will remain at the heart of sustainable AI success.