Accounting
Accounting profs. adapt to AI amid cheating concerns, other challenges
The rise of generative AI in society has also given rise to
Generative AI is known not for its skill with numbers but words, which makes it an unfortunately ideal cheating tool for humanities courses that use written essays as major components of their programs. However, while accounting is not exactly 19th century romantic literature, language and writing are not entirely irrelevant. An accounting student may not need to analyze the major themes in Ulysses, but they may be called upon to interpret an accounting standard, tax regulation or audit document, which can be just as dense and confusing. So while there are not as many opportunities for AI-guided cheating as in other fields, students are still finding places where bots can do their work for them, much to the chagrin of their professors.
“This is definitely something I have heard quite a bit about from my colleagues in the humanities and other fields, but is becoming an issue for accounting/finance classes as well. Students still need to understand the implications of ASU’s, disclosures, etc, and if they rely entirely on AI for assignment completion that knowledge will fade away,” said Sean Stein Smith, a professor at Lehman College who teaches intermediate accounting, cost accounting, advanced accounting and forensic accounting. He also leads Lehman’s development of AI business courses, as well its crypto/blockchain content.
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He added that he has seen AI-guided cheating first-hand, especially for short-form essay assignments as well as when he requires students to perform financial analyses using specific ratios.
Douglas Carmichael, former chief auditor of the PCAOB and currently a professor at Baruch College where he teaches auditing, noted that while he does not himself give any writing assignments that a student could use generative AI to cheat on, this doesn’t mean they’re still not using AI to undermine the purpose of an assignment, though once students realized he was on to them it has become less of an issue.
“I do ask students to submit at least one question before class on something in the text or recorded lectures they found difficult to understand or want additional information about. My experience in prior semesters was that about half of the students submitted a question that seemed suspicious to me given the language used and generality of the issue. The lack of specific reference to the topic in the text or recorded lecture was also apparent. These kinds of questions did not earn any credit and as word got out about that use of ChatGPT is infrequent,” he said.
But even if students are not out and out cheating, some have observed an unhealthy reliance on generative AI starting to form. Jack Castonguay, vice president of learning and development with Surgent as well as a Hofstra University professor who teaches advanced courses in accounting and auditing theory, has seen students struggling with understanding and communicating core concepts at least in part due to their reliance on generative AI.
“We see the reliance significantly when they have to give a presentation or take an in-person exam. It’s clear they have gotten to that point by using AI and can’t apply the logic on their own. Maybe in 3-10 years (given the speed of the improvement in LLMs) they won’t have to do it on their own, but it’s a large problem now for client relationships and having conversations with this in practice. They need to look up everything and use AI as a crutch. Seminar discussions are like pulling teeth oftentimes for me,” he said.
With this in mind, accounting educators — much like those in other fields — are currently in conversation about how to respond to this issue. Richard C. Jones, a Hofstra University accounting professor and former technical staff member at the Financial Accounting Standards Board, said this is a major topic of debate and discussion among college faculty and administrators, noting that it seems to be brought up in nearly every meeting. It is obvious, he said, that students will use LLMs on assignments, and so therefore the challenge for faculty is to assign projects and papers that require students to actually demonstrate their knowledge versus just handing in a paper or presentation.
“Fortunately, I teach classes that require the application of accounting rather than accounting theory. Therefore, my exams and other assessments are specific to case information provided and application of the accounting rules in providing the journal entries and the related disclosure information. So, my students do not have as much of an opportunity to use LLMs to answer the questions,” he said.
Additionally, he mentioned that educators are trying to find ways to work AI into their assignments, considering how quickly accounting firms themselves have taken to it.
Tracey Niemotko — a Marist University professor who teaches accounting and auditing as well as sustainability, taxation and forensic accounting — said that she views AI as more of a tool than a cheating mechanism, pointing out how models can be used to expedite audit procedures or clear away the busy work that eats up the day of many professionals. Consequently, she is a little more sanguine about AI-guided cheating, noting that even if students do use AI in their assignments, the nature of the work makes cheating difficult.
“Even with electronic testing in the classroom, I do not see cheating as a concern overall. I think the accounting students are perhaps a bit more disciplined than most students, so I don’t think they have the mindset to cheat. Even for writing assignments in my upper-level accounting courses, students may use AI to assist them, but they are required to write ‘in their own words.’ Overall, the majority do their own written work but may use AI as a tool to help them develop an outline or get them started,” she said.
Abigail Zhang Parker, a University of Texas at San Antonio professor whose research specialty is AI in accounting, has also directly worked AI into her classes. For example, her Accounting Information Systems courses include hands-on workshops where students learn to operate different accounting software solutions. She noted that AI can be a useful tool for finding relevant information and understanding difficult concepts.
Therefore, her overall philosophy is that students can use generative AI to help with assignments but not on exams, as that is when they’re tested on their actual understanding of the topic. So long as it is only used for assignments versus exams, she does not consider using AI to be cheating. She added it would be impractical to prevent the use of AI entirely anyway, it’s better for educators to find ways to use it too. However, she noted that teaching students proper use of AI can, itself, present a challenge.
“Perhaps we need to guide them how to use it properly. This is not easy. One method that came to my mind is to make the parts that demonstrate students’ own skills take a greater portion in the grading components. … For example, there are three exams throughout the semester, and they take 60% of the total grade, while assignments take 10%. For classes where students need to submit a report and make a presentation, maybe the report itself will not take up a high portion of the grade, but the in-person presentation will, as it better reflects students’ true understanding of the subject. And once students know that they will be mainly graded on their own performance, they are more incentivized to think through the problem than simply over-relying on AI,” she said.
Another reason to learn AI in the classroom is that, once students are working as professional accountants, clients will likely be using AI as well, and they will need to understand and explain what is missing from the AI’s answers. However, Castonguay, from Hofstra, voiced concerns that over-reliance on AI is eroding the critical thinking and reasoning skills needed to properly evaluate these answers in the first place. He does an exercise in class where students have ChatGPT summarize a FASB ASU and review its findings. Some, he said, don’t even know where to start as they have obviously been relying on ChatGPT to understand it at all.
“My bigger concern is [that] by such a reliance on AI they will lack the critical thinking and synthesizing skills that are still valued even with AI. To use a sports analogy, they are only bowling with gutter guards – what happens when those aren’t there?” he said.
Smith, from Lehman, said these kinds of things underscores the need to teach responsible AI usage in a way that does not degrade the human skills that they’ll be relying on in the professional world. He felt, unfortunately, that this could be an uphill battle.
“I do think that as AI becomes more integrated into the classroom and profession, we are going to have to really double-down on making sure students still have the ability to think critically. Especially in cases where questions or data may change on-the-fly, students are seeming to have a harder time pivoting and adapting to analyze said data on the spot. It’s a growing problem with no cookie-cutter or easy solution, but is definitely something I know is being talked about in pretty much every accounting department/School of Business,” he said.
The tax reconciliation bill making its way through Congress is expected to add trillions of dollars to the national debt, but the Trump administration hopes to offset the cost through income from tariffs. Accountants are helping worried companies deal with the possible fallout.
“Obviously, tariffs create a lot of uncertainty,” said Tom Alongi, a partner and U.S. national manufacturing practice leader at UHY, a Top 50 Firm based in Farmington Hills, Michigan. “But with uncertainty for U.S. manufacturers, it creates a lot of opportunity. And for those that are contract manufacturers that use a lot of offshoring, it creates a tremendous amount of angst, especially among the auto industry that really over the last three decades has turned into a global supply chain as we’ve been in a race to the bottom to reduce costs.”
UHY has been helping CFOs deal with the changing tariff policies coming out of the White House. “A lot of companies don’t even realize how deep some of their supply chain and where some of their raw material and purchased components ultimately originate,” said Alongi.
That involves quantifying the impact, understanding the origin of components and raw materials, and where that fits in the Harmonized System that’s administered by the International Trade Administration, making sure everything is classified correctly.
The Trump administration hopes to convince more companies to relocate their manufacturing operations to the U.S. But companies are also looking at changing their sourcing to other countries if they’ve been relying too heavily on Chinese-made supplies amid the ever-changing tariff pronouncements.
“That uncertainty does create challenges within our clients of allocation of capital,” said Alongi. “Do I make big bets to transition if I have a huge amount of risk that is isolated in a certain country? What do we potentially do to mitigate that risk?”
Auto manufacturers need to look at the proposed changes to tax credits in the tax bill, including reductions in electric vehicle tax credits and other tax incentives for renewable energy.
“I always knew that it is a great alternative source that fits certain consumers, but I never believed that it was going to take over the world,” said Alongi, who has been driving an EV for over seven years. “The tax credits create a behavior, and they incentivize people to drive electric.”
The shortcomings in the national infrastructure for charging EV batteries disincentivize broader takeup, and the disappearance of the tax credits would make the vehicles even less affordable.
CBIZ, a Top 10 Firm based in Cleveland, launched an
“Like so many other middle-market companies, certainly the larger companies, in this environment, there’s more demand for advice on mitigating exposure,” said Mark Baran, managing director of CBIZ’s National Tax Office. “Tariffs have been relatively low for a long time, and now the supply chain, pricing, vendor relationships and locations of where goods are manufactured need a fresh look.”
Different industries are looking for help, including manufacturing, construction and import. “They’re really looking at how to mitigate these costs, which don’t appear to be slowing down,” said Baran. “It could be temporary, but it’s not right now. So we have developed a number of different avenues to assist our clients, whether it’s evaluating inventory and how to properly account for inventory, whether it’s seeking to help them find locations in the U.S. if they want to bring their manufacturing back to the U.S. and do that in a tax efficient manner. We’re looking at intercompany transactions and layering transfer pricing concepts onto customs, seeing if we could help with savings in that regard. Depending upon what a client does and their structure, there’s probably a number of ways you can tackle tariffs and get ahead of it. “
Customs valuations are important. “It’s really ensuring that you have an accurate customs valuation, and oftentimes that wasn’t looked at accurately, and there are savings that can result from that,” said Baran. “These are considered an intercompany framework, oftentimes on the businesses that are most impacted by this. Looking at that structure is another way of doing this, not just not just transfer pricing, but location-based analysis. It’s taking what has been decades of international tax knowledge and layering on customs, and that’s providing a framework that’s been tested and works and is valuable.”
Baran has also been keeping a close eye on
The fastest-growing accounting firms spend twice as much on their marketing budget than all other firms, according to a new
The Association for Accounting Marketing, in collaboration with the Hinge Research Institute, surveyed over 87 firms — representing 1,037 offices and 66,000 employees — about the drivers behind the marketing performance of the fastest-growing firms.
High-growth firms invest two-thirds more in employer branding and recruiting, and they budget more for conferences and events, the data found.
When it comes to marketing budgets, the fastest-growing firms spent 2.1% of their revenue versus low-growth firms, which spent 1%. Some of that money is invested in marketing teams. High-growth firms have a higher ratio of marketing staff to full-time equivalents (1:49) compared to other firms (1:57). However, the average salary of a high-growth firm team member is 27% less than at the slowest-growing firms.
“When it comes to marketing, the accounting industry tends to be risk averse and invests less than most other professional services industries,” Liz Harr, managing partner at Hinge, said in a statement. “But the data shows that those that spend more on marketing are getting superior results.”
High-growth firms also spend 66% more on
(Read more:
Finally, the fastest-growing firms spend 21% more of their marketing budget on conferences and other in-person events than their peers, with high-growth firms allocating 30% of their budget versus low-growth firms allocating 25%.
“Today’s high-performing accounting firms are taking a somewhat more balanced approach to marketing,” AAM president Laura Metz said in a statement. “Digital and content marketing budgets are on the rise, but perhaps more than anything, high-growth firms are focused on nurturing relationships in person, whether at industry conferences or their own client appreciation events. These gatherings aren’t just line items, they’re growth strategies where the strongest connections, best leads and boldest brand moments take shape.”
President Donald Trump said his massive tax package is close to being finalized, having notched a deal over the state and local tax deduction, but the White House has yet to win over a faction of conservatives who want more austere spending cuts.
“We’re doing very well. It’s very close,” Trump told reporters Wednesday.
House Speaker Mike Johnson announced Wednesday that he had an agreement with lawmakers from high-tax states to increase the limit on the SALT deduction to $40,000.
“The members of the SALT caucus negotiated yesterday in good faith,” Representative Mike Lawler, a New York Republican, told Bloomberg Television. “We settled on something that we believe in, we support.”
However, several hardline Republicans said House GOP leaders aren’t honoring concessions the White House promised them and are threatening to tank the bill.
But the White House says they never made a deal, instead presenting some of the conservative holdouts with a menu of policy options that the Trump administration can live with, a White House official said.
The White House made clear to conservatives they would have to persuade their moderate colleagues to sign onto those ideas, the official said, a challenging feat given Republicans’ narrow and fractious House majority.
Trump and Johnson plan to meet with some of the ultraconservative lawmakers at the White House at 3 p.m., a person familiar with the plans said. That meeting will be an opportunity to strike a deal, the Trump official said.
Ultraconservative Representative Andy Harris of Maryland cast the conversations with the White House as a “midnight deal” for deeper cuts in Medicaid and faster elimination of Biden-era clean energy tax breaks.
“I’m sorry, but that’s a pay grade above the speaker,” Harris said.
Harris said the bill doesn’t reflect that agreement and hardliners will block the package if it comes to a vote. Representative Ralph Norman, an ultraconservative from South Carolina, said the bill “doesn’t have the votes. It’s not even close.”
Freedom Caucus members said they aren’t moving the goal posts by asking for more spending cuts than the budget outline they already voted for. They said they want to rearrange the spending cuts to focus on ending “abuse” in Medicaid and immediately ending green energy tax breaks.
House Republicans leaders are also planning to accelerate new Medicaid work requirements to December 2026 from 2029 in a bid to satisfy ultraconservatives, according to a lawmaker familiar with the discussions.
How deeply to cut safety-net programs such as food assistance and Medicaid health coverage for the poor and disabled has been a sticking point in reaching agreement on Trump’s tax bill, as Johnson attempts to navigate a narrow and fractious majority.
Harris and Norman spoke shortly after Johnson announced the SALT agreement on CNN.
Johnson said there is “a chance” the package could come to a vote Wednesday.
But several ultraconservatives cast doubt on that. “There’s a long way to go,” said Representative Chip Roy of Texas, another Republican hardliner.
The speaker can only lose a handful of votes and still pass the bill, which is the centerpiece of Trump’s legislative agenda.
The $40,000 SALT limit would phase out for annual incomes greater than $500,000 for the 10-year length of the bill, Lawler said. The income phaseout threshold would grow 1% a year over a decade, a person familiar with the matter said.
The cap is the same for both individual taxpayers and married couples filing jointly, the person added.
Another person described the income phase-out as gradual, so that taxpayers earning more than $500,000 would not be punished.
Several lawmakers — New York’s Lawler, Nick LaLota, Andrew Garbarino and Elise Stefanik; New Jersey’s Tom Kean, and Young Kim of California — have threatened to reject any tax package that does not raise the SALT cap sufficiently.
The current write-off is capped at $10,000, a limit imposed in Trump’s first-term tax cut bill. Previously, there was no limit on the SALT deduction and the deduction would again be uncapped if Trump’s first-term tax law is allowed to expire at the end of this year.
Johnson’s plan expands upon the $30,000 cap for individuals and couples included in the initial version of the tax bill released last week. That draft called for phasing down the deduction for those earning $400,000 or more. That plan was quickly rejected by several lawmakers from high-tax districts who called the plan insultingly low.
The acceleration of new Medicaid work requirements could become an issue in the midterm elections — which fall just one month earlier — with Democrats eager to criticize Republicans for restricting health benefits for low-income households.
House leaders’ initial version of legislation pushed back the new requirements until after the next presidential election.
The earlier date for the Medicaid work requirement could alienate several Republicans from swing districts concerned about cuts to the healthcare program. It is also likely to provoke a backlash in the Senate.
It will be very difficult for states to implement the work requirements in a year and a half, said Matt Salo, a consultant who advises health care companies and formerly worked for the National Association of Medicaid Directors.
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