The future of taxation: AI and the future of taxation.
The “Future of Professionals Report 2024” by Thomson Reuters offers a comprehensive look at how firms within this sector perceive the future of their industry, particularly in relation to AI. The “Future of Professionals Report 2024” by Thomson Reuters offers a comprehensive look into how firms within this sector perceive the future of their industry, particularly in relation to AI.
As the conversation continues to unfold, it is important for firms to consider the opportunities, challenges, and ethical considerations that tax and accounting firms and professionals might expect as they navigate an AI-augmented landscape.
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Embracing AI for enhanced productivity and client service
AI is increasingly viewed as a pivotal force in tax and accounting, with 84% of professionals in these fields seeing it as a beneficial tool. AI adoption is expected to automate repetitive tasks, which can free up four hours per week for every professional. This significant time saving is seen not just as a boost to personal productivity but also as an opportunity for firms to engage in more strategic and value-added activities.
Many firms anticipate using the time saved to enhance client services significantly. AI’s ability in helping to draft clearer communications on tax technical issues and improving response time to client inquiries are seen as being particularly valuable. This capability is expected to transform client interactions, making firms and their teams more efficient and effective, thereby enhancing the overall client experience.
Strategic priorities and cautious AI integration
The integration of AI ranks as the fourth highest priority among tax and accounting firms. This shows a strong desire to leverage AI to improve operational efficiency and customer service. However, there is a cautious approach to fully integrating AI into all aspects of firms’ work.
Accounting professionals are clear that they prefer AI to assist rather than replace human input, emphasizing the need for a balanced approach that includes human oversight. And, most experts agree that AI is not destined to replace the human element in tax and accounting.
Ethical and regulatory considerations
One of the most critical aspects of AI integration for tax and accounting firms is adhering to ethical and regulatory standards. The report suggests that professional bodies should set standards and certification processes for AI systems to ensure responsible use. As routine tasks become automated, tax and accountancy firms expect to shift their focus to more complex analysis and strategic projects. The growing complexity of tax laws and the strategic role of tax professionals are anticipated to drive an increase in in-house work and the value of work being outsourced to tax and accounting firms.
Additionally, with the efficiencies gained from AI, there is a strong desire among firm leaders and their teams to invest the saved time in professional development, work-life balance, and strategic initiatives. This not only could enhance job satisfaction and the overall well-being of the staff but also help firms retain or advance their competitive advantage.
Talent and staffing challenges
The report highlights a perceived significant impact of the shortage of skilled labor in the tax sector, particularly in the U.S. This concern is more acute for the tax industry compared to other sectors such as legal, risk, fraud and compliance. There is a growing need for skilled tax professionals capable of managing and leveraging AI technologies and addressing complex tax-related challenges.
Some experts believe that, with the potential for routine tasks to be streamlined using AI-powered tax and accounting tools, it could be possible for firms to maintain their current work levels with fewer staff–and for those staff members to be able to focus more of their time on higher-value activities.
Concerns about over-reliance on AI
While the potential benefits of AI are widely recognized, there are also concerns about over-reliance on the technology. AI is not a good fit for areas that require nuanced understanding, personal touch and research and analysis. There are some concerns that an over-reliance on AI has the potential to diminish the development of deep expertise, specialization, and critical thinking skills among professionals.
Tax and accounting professionals remain cautious about AI
The “Future of Professionals Report 2024” paints a picture of a profession at a crossroads. Tax and accounting firms are generally optimistic about the potential of AI to revolutionize their field, enhancing efficiency, accuracy, and client service.
However, they remain cautious, emphasizing the importance of maintaining a human-centric approach in the integration of new technologies. As the profession continues to evolve, these insights will be crucial in shaping a future where AI and human expertise coexist in a balanced and ethical manner.
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