Accounting
Agentic AI: The next big thing for accountants?
Published
3 months agoon

As the world continues to digest the rise of generative AI, agentic AI lies waiting on the bleeding edge, and while few accounting firms are using it at the moment, major players in the space have already made significant investments in what they believe to be the next step in the AI revolution.
Very broadly, an AI agent is software that is capable of at least some degree of autonomy to make decisions and interact with things outside itself in order to achieve some sort of goal—whether booking a flight, sending a bill or buying a gift—without needing constant human guidance.
The concept of an AI agent is not new, as computer scientists and software engineers have been using the term for years, and such agents are already used in commercial applications —

Antony Weerut – stock.adobe.com
Given this one might wonder why interest in
“Agents have been around but we had to program them in a logical format. But because of large language models who can understand natural language, it makes it much more flexible to create very sophisticated systems without having to know so much coding, and it’s much easier to implement on a larger scale,” he said.
He contrasted this with classic AI models.
“If you look at a machine learning thing like recommendations, those are pretty sophisticated, they’re pretty useful in today’s market in entertainment but those’re not really doing a task, they make up a menu like if you need to find Christmas movies. They don’t make a decision by themselves, you make the final decision that I am going to see this, they propose but you make the decision. [In contrast] an AI agent can accomplish a task,” he said.
Beyond this, advances in generative AI have also made AI agents themselves more effective in the field. Pascal Finette, co-founder and “chief heretic” at tech advisory firm Be Radical, contrasted this with robotic process automation. While he said RPA is not to be underestimated, even today, it tends to be very rigid in its setup, operating mostly on if/then/else principles that work very well for defined use cases but struggles in the face of unstructured data or unusual edge cases. Agents, bolstered with generative AI, become much more flexible.
“The reason I think why this is happening is we now have this superpower of an LLM which allows us to look at the world and look at data in a much more unstructured way and still get some really interest insight from it which we can then use to automate stuff, to execute on our behalf. … the beauty of LLMs and gen AI is it has the flexibility to be able to actually create meaningful interactions,” he said.
David Wood, an accounting professor at Brigham Young University whose research also heavily involves AI, noted that ‘agents’ can be thought of as a framework for applying technology; agents are programmed to do a task, and they can use other tools to accomplish that task, and so rather than being some sort of evolution from traditional RPA or generative AI, an agent can be thought of as something that will use RPA and generative AI.
“This is a different framework for how we do programming. We program an agent to do something, it could be to use generative AI, it could be to do a machine learning algorithm, it could be to simply change the color of the font. You can program an agent to do what you want and agents can work together or even compete against each other to do something, so it is not just a generative AI topic but highly valuable now because agents can use generative AI,” he said.
This increased flexibility has led to major investments in the technology from significant players. Big Four firm KPMG, for example, announced in
Around the same time, accounting solutions provider Thomson Reuters
That same month, Microsoft
Despite these high profile announcements, though, the field is very young, with many applications still in the experimental phase. Finette said it isn’t even necessarily bleeding edge so much as jagged edge. However, based on announcements like these, it appears this is the direction the AI community wants to go next.
Wood agreed, saying there are not a lot of agentic AI solutions right now that are fully production ready, but he sees great potential in the technology once it grows to maturity. For example, many accounting firms bill on how time is spent, which can be very time consuming to effectively track. Agentic AI would be able to observe an accountant work on company A for 45 minutes and company B for 60 minutes and bill accordingly. He said this might lead to people getting rid of all timekeeping because a computer can do it for them.
He also raised the idea that it could greatly increase efficiency for audits. Imagine, he said, if an agentic AI bot could automatically do most audit confirmations, send them to the humans for approval, and flag the things it couldn’t do itself, “so you could build tools for end to end processes to do full tasks together.”
Finette also saw great potential, saying it could act like a full AI worker capable of complex tasks. He said people eventually should be able to go to their AI and say they’re having a meeting in two days with someone and they need a flight and a hotel within their preferred parameters (e.g. cost, distance, etc.) The AI would then perform all the research, compare prices, maybe even generate its own spreadsheet to aggregate all the options, then make a judgment call on which flight to book and which hotel to reserve and actually do it. While an agent might struggle with novel tasks, for the most part it should be able to handle most of the routine work.
“You can translate that into a tax practice, where you have these complex workflows which a human breaks down into individual steps, each influencing the next: you take a document, extract the info from the document, put it into your accounting system, classify it, and do the booking in the system. All of this in theory agentic AI should be able to do for you,” said Finette.
Other accounting-specific applications he could envision include anything that has to do with data entry, reconciliation of accounts and classification of information in systems, as well as expense management, which he said is already semi-automated already.
“Right now it is semi-automated where you upload something into Expensify or something and it does image recognition on those expenses and pulls them in, but in the future it should do the report for me, there’s no reason why it should not take all this information and put the report together and submit it on my behalf,” he said.
However, Wood warned that agentic AI will still carry many of the risks that generative AI has today, especially the risk of making up information or being inconsistent with its outputs. While companies might promise a genie-like wish fulfillment, it will be especially important for people to understand the limitations of this technology.
“These systems interact, you wont always get a deterministic outcome like they think computers will generate, its not a calculator, so if you give an agent the ability to be creative, sometimes it might produce output A and sometimes produce output B and in accounting and business that can be a great strength, like in marketing, but when you do a tax form you don’t want that, you want income to be correct every single time. So the risk is that everyone gets hyped up and excited and applies it in the wrong place, you gotta use these tools and understand their strengths and weaknesses,” he said. “It’s sort of like gen AI right now, they think it will solve everything, but it solves these specific sets of issues and problems, so knowing where to use it and how to use it will be important.”
Finette agreed that the tendency of generative AI to make up information would still be a risk, and that there will likely be a lot of hype trying to minimize this risk as well. But he also noted that the fact that agents can actually act semi-autonomously and make decisions means the consequences of these risks can be bigger.
“In the flight booking use case, do you really trust the AI to actually book the flight for you? Will you be on the right flight at the right time? This is a silly example but a very real one,” he said. “The other [risk] is when you let AI make ‘moral’ decisions like letting AI do promotion decisions or suggesting out of 100 people here are the people who are top performers, where you get into issues like bias, which we know exists in AI. So all the issues we have with AI will be amplified with agentic AI.”
While theoretically these AI agents will be supervised by humans, Finette wondered about the degree to which people will actually do so, especially when AI can be so convincing in its reasoning even when wrong.
“These systems are so overly confident in their responses it is hard for some humans to step back and say don’t trust it. We all have experiences where you use ChatGPT and it tells you something wrong but they tell it to you in such a convincing way that if you didn’t have the knowledge you’d take it as gospel. … It is amplified if you let the system execute on this information. The human challenge is, and there are a bunch of research papers showing AIs are as convincing or even more so than humans, we need to get our workforce to understand that they should tread with caution and not let the AI bully you into a corner,” he said.
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Accounting
Senate unveils plan to fast-track tax cuts, debt limit hike
Published
9 hours agoon
April 2, 2025
Senate Republicans unveiled a budget blueprint designed to fast-track a renewal of President Donald Trump’s tax cuts and an increase to the nation’s borrowing limit, ahead of a planned vote on the resolution later this week.
The Senate
Republicans say they are assuming that the cost of extending the expiring 2017 Trump tax cuts will cost zero dollars.
The draft is a sign that divisions within the Senate GOP over the size and scope of spending cuts to offset tax reductions are closer to being resolved.
Lawmakers, however, have yet to face some of the most difficult decisions, including which spending to cut and which tax reductions to prioritize. That will be negotiated in the coming weeks after both chambers approve identical budget resolutions unlocking the process.
The Senate budget plan would also increase the debt ceiling by up to $5 trillion, compared with the $4 trillion hike in the House plan. Senate Republicans say they want to ensure that Congress does not need to vote on the debt ceiling again before the 2026 midterm elections.
“This budget resolution unlocks the process to permanently extend proven, pro-growth tax policy,” Senate Finance Chairman Mike Crapo, an Idaho Republican, said.
The blueprint is the latest in a multi-step legislative process for Republicans to pass a renewal of Trump’s tax cuts through Congress. The bill will renew the president’s 2017 reductions set to expire at the end of this year, which include lower rates for households and deductions for privately held businesses.
Republicans are also hoping to include additional tax measures to the bill, including raising the state and local tax deduction cap and some of Trump’s campaign pledges to eliminate taxes on certain categories of income, including tips and overtime pay.
The plan would allow for the debt ceiling hike to be vote on separately from the rest of the tax and spending package. That gives lawmakers flexibility to move more quickly on the debt ceiling piece if a federal default looms before lawmakers can agree on the tax package.
Political realities
Senate Majority Leader John Thune told reporters on Wednesday, after meeting with Trump at the White House to discuss the tax blueprint, that he’s not sure yet if he has the votes to pass the measure.
Thune in a statement said the budget has been blessed by the top Senate ruleskeeper but Democrats said that it is still vulnerable to being challenged later.
The biggest differences in the Senate budget from the competing House plan are in the directives for spending cuts, a reflection of divisions among lawmakers over reductions to benefit programs, including Medicaid and food stamps.
The Senate plan pares back a House measure that calls for at least $2 trillion in spending reductions over a decade, a massive reduction that would likely mean curbing popular entitlement programs.
The Senate GOP budget grants significantly more flexibility. It instructs key committees that oversee entitlement programs to come up with at least $4 billion in cuts. Republicans say they expect the final tax package to contain much larger curbs on spending.
The Senate budget would also allow $150 billion in new spending for the military and $175 billion for border and immigration enforcement.
If the minimum spending cuts are achieved along with the maximum tax cuts, the plan would add $5.8 trillion in new deficits over 10 years, according to the Committee for a Responsible Federal Budget.
The Senate is planning a vote on the plan in the coming days. Then it goes to the House for a vote as soon as next week. There, it could face opposition from spending hawks like South Carolina’s Ralph Norman, who are signaling they want more aggressive cuts.
House Speaker Mike Johnson can likely afford just two or three defections on the budget vote given his slim majority and unified Democratic opposition.

Financial advisors and clients worried about stock volatility and inflation can climb bond ladders to safety — but they won’t find any, if those steps lead to a place with higher taxes.
The choice of asset location for bond ladders in a client portfolio can prove so important that some wealthy customers holding them in a taxable brokerage account may wind up losing money in an inflationary period due to the payments to Uncle Sam,
“Thats going to be the No. 1 concern about, where is the optimal place to hold them,” Spranger said in an interview. “One of our primary objectives for a bond portfolio is to smooth out that volatility. … We’re trying to reduce risk with the bond portfolio, not increase risks.”
READ MORE:
The ‘peculiarly bad location’ for a bond ladder
Risk-averse planners, then, could likely predict the conclusion of the working academic paper, which was
“Few planners will be surprised to learn that locating a TIPS ladder in a taxable account leads to phantom income and excess payment of tax, with a consequent reduction in after-tax real spending power,” McQuarrie writes. “Some may be surprised to learn just how baleful that mistake in account location can be, up to and including negative payouts in the early years for high tax brackets and very high rates of inflation. In the worst cases, more is due in tax than the ladder payout provides. And many will be surprised to learn how rapidly the penalty for choosing the wrong asset location increases at higher rates of inflation — precisely the motivation for setting up a TIPS ladder in the first place. Perhaps the most surprising result of all was the discovery that excess tax payments in the early years are never made up. [Original issue discount] causes a dead loss.”
The Roth account may look like a healthy alternative, since the clients wouldn’t owe any further taxes on distributions from them in retirement. But the bond ladder would defeat the whole purpose of that vehicle, McQuarrie writes.
“Planners should recognize that a Roth account is a peculiarly bad location for a bond ladder, whether real or nominal,” he writes. “Ladders are decumulation tools designed to provide a stream of distributions, which the Roth account does not otherwise require. Locating a bond ladder in the Roth thus forfeits what some consider to be one of the most valuable features of the Roth account. If the bond ladder is the only asset in the Roth, then the Roth itself will have been liquidated as the ladder reaches its end.”
READ MORE:
RMD advantages
That means that the Treasury inflation-protected securities ladder will add the most value to portfolios in a tax-deferred account (TDA), which McQuarrie acknowledges is not a shocking recommendation to anyone familiar with them. On the other hand, some planners with clients who need to
“More interesting is the demonstration that the after-tax real income received from a TIPS ladder located in a TDA does not vary with the rate of inflation, in contrast to what happens in a taxable account,” McQuarrie writes. “Also of note was the ability of most TIPS ladders to handle the RMDs due, and, at higher rates of inflation, to shelter other assets from the need to take RMDs.”
The
“If TIPS yields are attractive when the ladder is set up, distributions from the ladder will typically satisfy RMDs on the ladder balance throughout the 30 years,” McQuarrie writes. “The higher the inflation experienced, the greater the surplus coverage, allowing other assets in the account to be sheltered in part from RMDs by means of the TIPS ladder payout. However, if TIPS yields are borderline unattractive at ladder set up, and if the ladder proved unnecessary because inflation fell to historically low levels, then there may be a shortfall in RMD coverage in the middle years, requiring either that TIPS bonds be sold prematurely, or that other assets in the TDA be tapped to cover the RMD.”
READ MORE:
The key takeaways on bond ladders
Other caveats to the strategies revolve around any possible state taxes on withdrawals or any number of client circumstances ruling out a universal recommendation. The main message of McQuarrie’s study serves as a warning against putting the ladder in a taxable brokerage account.
“Unsurprisingly, the higher the client’s tax rate, the worse the outcomes from locating a TIPS ladder in taxable when inflation rages,” he writes. “High-bracket taxpayers who accurately foresee a surge in future inflation, and take steps to defend against it, but who make the mistake of locating their TIPS ladder in taxable, can end up paying more in tax to the government than is received from the TIPS ladder during the first year or two.”
For municipal or other types of tax-exempt bonds, though, a taxable account is “the optimal place,” Spranger said. Convertible Treasury or corporate bonds show more similarity with the Treasury inflation-protected securities in that their ideal location is in a tax-deferred account, he noted.
Regardless, bonds act as a crucial core to a client’s portfolio, tamping down on the risk of volatility and sensitivity to interest rates. And the right ladder strategies yield more reliable future rates of returns for clients than a bond ETF or mutual fund, Spranger said.
“We’re strong proponents of using individual bonds, No. 1 so that we can create bond ladders, but, most importantly, for the certainty that individual bonds provide,” he said.
Accounting
Why IRS cuts may spare a unit that facilitates mortgages
Published
11 hours agoon
April 2, 2025
Loan applicants and mortgage companies often rely on an Internal Revenue Service that’s dramatically downsizing to help facilitate the lending process, but they may be in luck.
That’s because the division responsible for the main form used to allow consumers to authorize the release of income-tax information to lenders is tied to essential IRS operations.
The Income Verification Express Service could be insulated from what NMN affiliate Accounting Today has described of
“It’s unlikely that IVES will be impacted due to association within submission processing,” said Curtis Knuth, president and CEO of NCS, a consumer reporting agency. “Processing tax returns and collecting revenue is the core function and purpose of the IRS.”
Knuth is a member of the IVES participant working group, which is comprised of representatives from companies that facilitate processing of 4506-C forms used to request tax transcripts for mortgages. Those involved represent a range of company sizes and business models.
The IRS has planned to slash thousands of jobs and make billions of dollars of cuts that are still in process, some of which have been successfully challenged in court.
While the current cuts might not be a concern for processing the main form of tax transcript requests this time around, there have been past issues with it in other situations like 2019’s lengthy
President Trump recently signed a continuing funding resolution
The mortgage industry will likely have an additional option it didn’t have in 2019 if another extended deadlock on the budget emerges and impedes processing of the central tax transcript form.
“It absolutely affected closings, because you couldn’t get the transcripts. You couldn’t get anybody on the phone,” said Phil Crescenzo Jr., vice president of National One Mortgage Corp.’s Southeast division.
There is an automated, free way for consumers to release their transcripts that may still operate when there are issues with the 4506-C process, which has a $4 surcharge. However, the alternative to the 4506-C form is less straightforward and objective as it’s done outside of the mortgage process, requiring a separate logon and actions.
Some of the most recent IRS cuts have targeted technology jobs and could have an impact on systems, so it’s also worth noting that another option lenders have sometimes elected to use is to allow loans temporarily move forward when transcript access is interrupted and verified later.
There is a risk to waiting for verification or not getting it directly from the IRS, however, as government-related agencies hold mortgage lenders responsible for the accuracy of borrower income information. That risk could increase if loan performance issues become more prevalent.
Currently, tax transcripts primarily come into play for government-related loans made to contract workers, said Crescenzo.
“That’s the only receipt that you have for a self-employed client’s income to know it’s valid,” he said.
The home affordability crunch and rise of gig work like Uber driving has increased interest in these types of mortgages, he said.
Contract workers can alternatively seek financing from the private non-qualified mortgage market where bank statements could be used to verify self-employment income, but Crescenzo said that has disadvantages related to government-related loans.
“Non QM requires higher downpayments and interest rates than traditional financing,” he said.
In the next couple years, regional demand for loans based on self-employment income could rise given the federal job cuts planned broadly at public agencies, depending on the extent to which court challenges to them go through.
Those potential borrowers will find it difficult to get new mortgages until they can establish more of a track record with their new sources of income, in most cases two years from a tax filing perspective.

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