New report shows opportunities and risks for tax professionals with GenAI
The emergence of generative artificial intelligence (GenAI) has sparked both excitement and apprehension in the tax industry, with professionals divided on its potential impact.
Jump to:
| Perceptions of GenAI |
| How are tax professionals using GenAI? |
| Training and policies |
| The future of work |
| New Report: 2024 Generative AI in Professional Services
Explore all the latest comprehensive insights into how GenAI is shaping professional services. Access full report |
The new report
The Thomson Reuters Institute has released its latest report on GenAI, titled 2024 GenAI in Professional Services. This comprehensive study explores the attitudes, perceptions, and usage of GenAI among professionals in the legal, tax & accounting, risk & fraud, and government sectors. Conducted in early 2024, the survey gathered valuable insights from respondents across the United States, United Kingdom, and Canada.
The report offers a deep dive into the transformative impact of GenAI on professional services, and below is a brief summary of how tax professionals specifically perceive this technology and its potential applications on their workflows.
Key findings
The report shows an overall positive outlook towards GenAI, with 49% of respondents from tax departments indicating positive sentiments towards the future of GenAI in their industries. However, there is a lack of training (less than 20% of tax firm respondents said they have received any GenAI training) and some hesitancy towards its lack of human intuition.
Tax professionals’ perceptions of GenAI
Tax professionals are somewhat divided on the potential impact of GenAI on their profession, with some believing it will revolutionize their work and others expressing concerns about its accuracy and reliability. The report highlights these contrasting perceptions, shedding light on the complex relationship between tax professionals and this emerging technology.
For those who reported being hesitant about GenAI, the primary reason given was due to the technology itself. Fears about potential inaccuracies in results and skepticism that it can deliver promised results loom large, hindering their full embrace of GenAI.
Will AI replace tax professionals? According to the report, just under half of respondents believe GenAI is somewhat of a threat to the need for tax professionals. However, it is important to note that the most successful organizations will be the ones that use GenAI to augment, not fully replace, the work they do.
On the other hand, many tax professionals recognize the potential of GenAI to transform their work. Respondents in the report envision it as a tool that can increase efficiency and productivity, streamline work processes, and improve work quality. The ability of GenAI to process vast amounts of data quickly and accurately offers the promise of improved quality and accuracy of work, enhancing the overall efficiency of tax preparation and staying on top of compliance and regulations.
“I think we are still in the early stages of generative AI. I would not want to be too dependent on it,” said one corporate tax director. “However, in the long-run, I think it will be a valuable tool.”
How are tax professionals using generative AI?
69% of tax professionals specifically pointed to tax return preparation as a task for GenAI. Beyond tax return preparation, tax professionals identified a variety of other potential uses for GenAI, including bookkeeping, research, and document review. Through automation, GenAI can further help with time-consuming repetitive tasks such as invoice processing, data analysis, and data entry to focus more on decision-making.
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See the full list of use cases for tax professionals and how they have begun implementing GenAI
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It’s no surprise that tax professionals are beginning to explore the potential of GenAI to transform their work. While there are still concerns about the accuracy and reliability of GenAI’s data and machine learning algorithms, it is clear that many tax professionals see this technology as a tool that can help them improve their efficiency and productivity.
Additionally, using industry-specific GenAI tools for workflows ensures that the data and machine learning algorithms used are tailored to the specific needs and regulations of the tax industry. This increases the accuracy and reliability of results, making it a more responsible and safe option compared to using public-facing GenAI tools, that may not have the necessary safeguards in place.
Training and policies surrounding GenAI
The tax industry is lagging in GenAI training, with merely 12% of professionals reporting that their organization provides it. Moreover, a noteworthy minority of respondents were uncertain whether such training was offered. This deficit hinders tax professionals’ ability to effectively utilize GenAI in their work.
Training programs can educate tax professionals on the capabilities and limitations of GenAI, enabling them to leverage it effectively while ensuring accuracy. Training can also help address ethical considerations, data privacy, and potential biases to ensure responsible and ethical use of GenAI in tax preparation and other tasks.
The future of work
As AI technology becomes more common, hiring employees with GenAI familiarity and skills will become increasingly important. According to the report, very few organizations say that AI skills are a requirement to be hired, but an increasing number call GenAI skills a nice to have when hiring.
These skills lead many respondents in the report to expect entirely new job roles to arise within the next three to five years, likely to be involved with the implementation and ongoing maintenance of AI and data projects, including AI specialists, data analysts, and AI implementation coordinators.
The future of work in the tax industry is bright, but it is important for tax professionals to embrace GenAI and its potential benefits, while also being aware of its risks and limitations. With the right training and policies in place, GenAI can be a valuable tool that can help tax professionals work more efficiently and effectively.
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2024 Generative AI in Professional Services
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