For more than a decade, if you were to ask the technology futurists which industries would be most significantly disrupted by AI, tax, accounting and audit-related professions would have been at or near the top of the list. Those predictions were partially true.
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AI is indeed changing the way tax professionals work in significant ways, but none of them involve massive job losses or shrinking demand for trained accountants and auditors. Quite the opposite. According to our
That’s a big about-face for a segment of the workforce that was once believed to be the flash point for AI-related job losses. It’s also an encouraging signal that the specialized AI solutions being developed and launched for professional-grade tax and audit work are delivering on their promise to help professionals accomplish more in a day and focus on more rewarding, higher-value work. However, digging a little deeper into the data, we also see some more troubling trends emerging when it comes to firms that have been slower to adopt AI in their practices.
The real AI talent risk
The first, and most obvious, is the clear gap that’s emerging between AI haves and have-nots in the tax and accounting space when it comes to talent. While those who are currently using AI tools specifically designed for tax, accounting and audit work are seeing enormous value in those tools, 41% of respondents to our survey still do not have access to them. That means there’s a very uneven playing field developing among firms, where those who have embraced AI are not only able to get more high-quality work done faster; they’re also able to recruit the best talent.
We estimate that the average cost to replace a highly trained professional is upwards of $232,000. Multiply that across the entire universe of professionals who are now more likely to defect to a firm with better tech, and the bottom-line risk starts to become serious — especially for midsized and smaller firms that tend to thrive on personnel stability.
Great expectations
Another challenge hanging over all of this is an evolving set of expectations among clients. It’s not just employees who are aware of the enormous value-add that AI can bring to everyday work; clients are expecting more too. In fact, according to our research, 78% of corporate clients say it is very important, or even essential, to receive AI-enabled quality improvements from the firms they work with. However, just 6% say they are getting that today, and 32% say they are reconsidering their relationships with firms they feel are falling behind. Applied to the U.S. CPA market alone, that could equal $38 billion in revenue in active reconsideration.
Increasingly, the big trend that’s emerging as more firms adopt AI is a rising tide of optimism that the technology can help overcome some of the industry’s greatest challenges, and firms that adopt it effectively stand to experience several benefits. Tax, accounting and audit professionals — and their clients — recognize that the right AI tools are helping them cover more ground faster, take on bigger workloads, and deliver greater value.
But the execution of AI strategy is still wildly variable from one firm to the next. While some have embraced AI wholeheartedly, arming their teams with tailored solutions built specifically to help them do their jobs better, others have taken a wait-and-see approach, leaving it to their individual employees to experiment on their own. That second approach comes with a lot of new risks, the full impacts of which we have yet to see. For firms that want to be sure they capitalize on the upside while minimizing downside risk, it’s time to start thinking seriously about firm-wide AI strategy.
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