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AI leaders on: the progress, promise and peril of AI

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Accounting’s AI revolution not only continued into 2024 but actually seemed to accelerate, as it has now become near impossible to go to a conference, sit in a strategy meeting or even shop for new software without hearing those two famous letters, often preceded by the word “generative” and followed by the word “powered” or “driven.” This might seem rather strange, as around this time last year we were marveling at how far AI had come in such a short time, and yet at the end of 2024 we find ourselves in this place once more as the current generation of AI tools makes last year’s seem almost quaint. 

This is why, in our second annual AI Thought Leaders Survey, we asked experts in the field what they thought of the past year. The field of AI is both vast and ever-changing, and we wanted to see what people deeply enmeshed in AI in accounting thought of all the changes they’ve seen this year. 

Many noted that AI has gone from being a novelty or an experimental tool in many cases to being a practical, widely-adopted technology integral to daily operations. In this respect, even those who may not consider themselves tech-savvy are now using sophisticated AI tools that would have seemed like science fiction as little as ten years ago. Strategic decision-making, advanced analytics, and personalized client interactions are just the tip of the iceberg when it comes to use cases for accountants. 

“At the beginning of the year, AI in accounting felt like an emerging trend that many were watching from the sidelines,” said Kacee Johnson, vice president of strategy and innovation at CPA.com, talking about the noticeable shift since then. “It’s no longer just about automation; the conversations have evolved to exploring how AI can enhance advisory roles, improve decision-making, and solve capacity challenges. I’ve seen more professionals embracing AI as a tool they need to understand and leverage, not just something that might affect their work down the line.” 

The speed at which AI has advanced this year impressed many, especially its generative capabilities and its application to data both structured and unstructured. In a short time it has transformed workflows, increased productivity, and uncovered new insights their human users had never considered. Meanwhile, the recent rollout of specialized AI agents capable of limited autonomy to handle complex tasks like fraud detection, tax analysis and data reconciliation tells them there’s still so much more to come. 

“We have all seen AI advance significantly in the past year, especially in the area of automation of manual tasks. Think about areas like bill pay, invoicing, expense management, financial statement analysis, etc. AI is putting accountants into more strategic roles and getting them out of the trenches in doing the manual tasks. This past year I have seen a number of players in the tax space surface by leveraging AI. Although many of them still continue to be a work in progress, we are going to see AI totally change the tax space and eliminate the massive tech stacks that exist in many firms today,” said Jim Bourke, managing director of Withum’s advisory services.

Of course, all technologies have their risks and AI is no exception. Indeed, as the technology’s presence in firms grows, so too have the concerns about its use. Our experts cited security risks like data breaches and misuse of sensitive information by AI systems, and many were still worried about the accuracy of their outputs given the tendency to “hallucinate” (i.e. making stuff up). But they also raised broader ethical concerns, such as the perpetuation of bias as well as potential job displacement in the short term. Our experts didn’t think AI was going to wholesale replace accountants anytime soon, but some conceded that it would serve to disrupt job dynamics in certain parts of the profession. 

“It’s poised to replace certain jobs or at least automate specific tasks within jobs. AI agents will influence particular roles, potentially altering the premium placed on certain skills, leading to some traditional jobs disappearing entirely,” said Prashant Ganti, head of product management in Zoho’s Finance and Operations business unit. 

In this, the first of three parts, we look at what our experts—drawn from CPA firms, software vendors and academics all deeply involved in the field of artificial intelligence in the accounting world—thought of three questions: 

* How has your perception or impression of AI in accounting changed from the beginning of this year to now?

* What scares you the most about AI today? What is your biggest concern? 

* What’s impressed you the most about AI this year? What really got your attention? Both in terms of accounting and overall.

We’ll have more from our experts next week.

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Accounting

IAASB tweaks standards on working with outside experts

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The International Auditing and Assurance Standards Board is proposing to tailor some of its standards to align with recent additions to the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants when it comes to using the work of an external expert.

The proposed narrow-scope amendments involve minor changes to several IAASB standards:

  • ISA 620, Using the Work of an Auditor’s Expert;
  • ISRE 2400 (Revised), Engagements to Review Historical Financial Statements;
  • ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information;
  • ISRS 4400 (Revised), Agreed-upon Procedures Engagements.

The IAASB is asking for comments via a digital response template that can be found on the IAASB website by July 24, 2025.

In December 2023, the IESBA approved an exposure draft for proposed revisions to the IESBA’s Code of Ethics related to using the work of an external expert. The proposals included three new sections to the Code of Ethics, including provisions for professional accountants in public practice; professional accountants in business and sustainability assurance practitioners. The IESBA approved the provisions on using the work of an external expert at its December 2024 meeting, establishing an ethical framework to guide accountants and sustainability assurance practitioners in evaluating whether an external expert has the necessary competence, capabilities and objectivity to use their work, as well as provisions on applying the Ethics Code’s conceptual framework when using the work of an outside expert.  

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Accounting

Tariffs will hit low-income Americans harder than richest, report says

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President Donald Trump’s tariffs would effectively cause a tax increase for low-income families that is more than three times higher than what wealthier Americans would pay, according to an analysis from the Institute on Taxation and Economic Policy.

The report from the progressive think tank outlined the outcomes for Americans of all backgrounds if the tariffs currently in effect remain in place next year. Those making $28,600 or less would have to spend 6.2% more of their income due to higher prices, while the richest Americans with income of at least $914,900 are expected to spend 1.7% more. Middle-income families making between $55,100 and $94,100 would pay 5% more of their earnings. 

Trump has imposed the steepest U.S. duties in more than a century, including a 145% tariff on many products from China, a 25% rate on most imports from Canada and Mexico, duties on some sectors such as steel and aluminum and a baseline 10% tariff on the rest of the country’s trading partners. He suspended higher, customized tariffs on most countries for 90 days.

Economists have warned that costs from tariff increases would ultimately be passed on to U.S. consumers. And while prices will rise for everyone, lower-income families are expected to lose a larger portion of their budgets because they tend to spend more of their earnings on goods, including food and other necessities, compared to wealthier individuals.

Food prices could rise by 2.6% in the short run due to tariffs, according to an estimate from the Yale Budget Lab. Among all goods impacted, consumers are expected to face the steepest price hikes for clothing at 64%, the report showed. 

The Yale Budget Lab projected that the tariffs would result in a loss of $4,700 a year on average for American households.

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Accounting

At Schellman, AI reshapes a firm’s staffing needs

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Artificial intelligence is just getting started in the accounting world, but it is already helping firms like technology specialist Schellman do more things with fewer people, allowing the firm to scale back hiring and reduce headcount in certain areas through natural attrition. 

Schellman CEO Avani Desai said there have definitely been some shifts in headcount at the Top 100 Firm, though she stressed it was nothing dramatic, as it mostly reflects natural attrition combined with being more selective with hiring. She said the firm has already made an internal decision to not reduce headcount in force, as that just indicates they didn’t hire properly the first time. 

“It hasn’t been about reducing roles but evolving how we do work, so there wasn’t one specific date where we ‘started’ the reduction. It’s been more case by case. We’ve held back on refilling certain roles when we saw opportunities to streamline, especially with the use of new technologies like AI,” she said. 

One area where the firm has found such opportunities has been in the testing of certain cybersecurity controls, particularly within the SOC framework. The firm examined all the controls it tests on the service side and asked which ones require human judgment or deep expertise. The answer was a lot of them. But for the ones that don’t, AI algorithms have been able to significantly lighten the load. 

“[If] we don’t refill a role, it’s because the need actually has changed, or the process has improved so significantly [that] the workload is lighter or shared across the smarter system. So that’s what’s happening,” said Desai. 

Outside of client services like SOC control testing and reporting, the firm has found efficiencies in administrative functions as well as certain internal operational processes. On the latter point, Desai noted that Schellman’s engineers, including the chief information officer, have been using AI to help develop code, which means they’re not relying as much on outside expertise on the internal service delivery side of things. There are still people in the development process, but their roles are changing: They’re writing less code, and doing more reviewing of code before it gets pushed into production, saving time and creating efficiencies. 

“The best way for me to say this is, to us, this has been intentional. We paused hiring in a few areas where we saw overlaps, where technology was really working,” said Desai.

However, even in an age awash with AI, Schellman acknowledges there are certain jobs that need a human, at least for now. For example, the firm does assessments for the FedRAMP program, which is needed for cloud service providers to contract with certain government agencies. These assessments, even in the most stable of times, can be long and complex engagements, to say nothing of the less predictable nature of the current government. As such, it does not make as much sense to reduce human staff in this area. 

“The way it is right now for us to do FedRAMP engagements, it’s a very manual process. There’s a lot of back and forth between us and a third party, the government, and we don’t see a lot of overall application or technology help… We’re in the federal space and you can imagine, [with] what’s going on right now, there’s a big changing market condition for clients and their pricing pressure,” said Desai. 

As Schellman reduces staff levels in some places, it is increasing them in others. Desai said the firm is actively hiring in certain areas. In particular, it’s adding staff in technical cybersecurity (e.g., penetration testers), the aforementioned FedRAMP engagements, AI assessment (in line with recently becoming an ISO 42001 certification body) and in some client-facing roles like marketing and sales. 

“So, to me, this isn’t about doing more with less … It’s about doing more of the right things with the right people,” said Desai. 

While these moves have resulted in savings, she said that was never really the point, so whatever the firm has saved from staffing efficiencies it has reinvested in its tech stack to build its service line further. When asked for an example, she said the firm would like to focus more on penetration testing by building a SaaS tool for it. While Schellman has a proof of concept developed, she noted it would take a lot of money and time to deploy a full solution — both of which the firm now has more of because of its efficiency moves. 

“What is the ‘why’ behind these decisions? The ‘why’ for us isn’t what I think you traditionally see, which is ‘We need to get profitability high. We need to have less people do more things.’ That’s not what it is like,” said Desai. “I want to be able to focus on quality. And the only way I think I can focus on quality is if my people are not focusing on things that don’t matter … I feel like I’m in a much better place because the smart people that I’ve hired are working on the riskiest and most complicated things.”

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