Accounting
Responsible AI in accounting: Addressing firms’ top 5 concerns
Generative artificial intelligence is making inroads into the accounting industry, promising to greatly increase efficiency and productivity while offering real-time, deep insights that help improve performance. As firms deal with labor shortages and expand their services amid elevated client expectations, they are avidly exploring AI’s possibilities.
AI doesn’t come without caveats, particularly for accounting firms that work with highly sensitive personal and financial information of their clients. Although Gen AI’s potential benefits are considerable, firms should proceed cautiously and understand its impact on business.
For all of its potential, AI may not immediately solve all of the industry’s challenges. As the initial excitement subsides, it’s critical that IT teams ensure that any AI initiatives align with the objectives of their stakeholders — including the firm itself, clients and regulatory bodies.
The steps to implementing responsible AI
Building a responsible AI strategy starts with a clear understanding of the specific problems or opportunities the firm aims to address with AI, coupled with a commitment to educating leadership and employees on what AI can and cannot achieve. This foundation ensures AI is implemented and used thoughtfully, with resources aligned to deliver maximum impact.
Accounting firms also need a strong data and analytics strategy to ensure their data is well-structured before implementing AI. Structured data is the backbone of responsible AI, enabling faster, more accurate insights and transforming data into a powerful decision-making tool. Without it, AI risks stumbling on inconsistencies and poor-quality data, leading to misguided outcomes and wasted resources. In short, well-structured data unlocks AI’s full potential.
Once these fundamentals are in place, firms can assess their current maturity and readiness for AI implementation. Using a
- Information strategy;
- Governance/resourcing;
- Technology/IT infrastructure;
- Level of automation; and.
- End-user capabilities.
By using the model, firms can identify their capability levels in each category, ranging from beginner to advanced. For example, in the area of information strategy, a firm with minimal IT and business alignment may be considered a beginner, whereas one with integrated alignment across IT, business and executive functions may be classified as more advanced.
Responsible AI will prioritize safety, transparency and trustworthiness. Firms need to strike a delicate balance between innovation and security, which first requires a thorough evaluation of data connectivity, curation, and confidentiality.
To properly incorporate responsible AI, there are five essential areas accounting firms should consider:
Protecting client privacy
Because safeguarding client information is the foundation of building trust with clients, privacy protections must be a top priority when accounting firms add solutions to their tech stack or develop new tools.
Firms can ensure they meet client expectations of confidentiality by practicing techniques like data minimization, ensuring firms handle the least amount of information required for a specific purpose. That can reduce the risk of data breaches, privacy violations and misuse.
Firms should also never share client information on public platforms like ChatGPT, which are vulnerable to cybersecurity threats that the firm has no control over.
Guarding against bias
An AI model trains by analyzing enormous volumes of data and applying what it learns to perform its tasks. Data scientists and developers need to be wary of the information they use to train and create AI algorithms. If biases exist in the training data, those biases will be replicated in the AI model’s work and generate unrelated or incorrect information.
For example, a model may be trained to scrutinize a particular account that has a history of misstatements while overlooking new accounts in the current year. Or it may apply a biased risk profile to particular groups of clients based on historical data rather than client-specific information. IT teams should scrutinize inputs and outputs regularly to detect biased results.
Promoting trust through transparency
AI’s performance should not be a mystery; the models used by accounting firms should be simple, auditable and explainable. Explainable AI methods and tools can show how AI arrives at its decisions, allowing humans to understand the outcomes or identify and address potential issues. Establishing this level of transparency will help foster and demonstrate trust and respect with customers, users, and stakeholders.
Enforcing accountability
Better transparency enables better accountability. A user or group of users — which can include developers, deployers and even end users — should be assigned to regularly monitor and audit the firm’s AI models. They should be able to explain the rationale behind the AI’s outputs and perform updates or make adjustments to correct issues or errors.
Redefining roles
The truth is that AI isn’t going to replace accountants, but it will redefine their roles. AI has the power to transform the way accountants work, freeing employees from mundane tasks to drive growth. Accountants need to grasp the power of pairing their expertise with AI and learn to work with it to improve performance and efficiency.
AI will need accountants to provide extensive monitoring and oversight. But by taking over a lot of routine tasks that accountants spend time on now, AI will allow them to focus on more complex high-level initiatives. In the process, AI will help alleviate the labor shortage and could improve firm retention.
Future-forward accounting firms can reap immense benefits from GenAI as they embark on their digital transformation journey. However, they need to ensure they protect privacy and security. Implementing AI within a capable knowledge work automation framework can, for example, help ensure that data remains confidential, stays within internal system boundaries and that employees have access only to the data they need.
Making sure AI models are trained on complete, bias-free data. Having accountants monitor AI’s outputs can maintain transparency and ensure efficient, effective use of the technology. AI is part of the path forward for the industry, but firms need to be sure they step carefully.
The Governmental Accounting Standards Board today published a post-implementation review report on GASB Statement No. 72, Fair Value Measurement and Application.
The
The report concludes that Statement 72 resolved the underlying need for the statement, which involved valuation issues from a financial reporting perspective. It also concludes that the statement was operational and its application provides financial-report users with decision-useful information such as fair value measurements used in the analysis of governmental financial information and fair value-related disclosures.
Statement 72 is eligible to undergo more extensive PIR procedures, culminating in a final report.
CohnReznick, a Top 25 Firm based in New York, is the latest accounting firm to receive a private equity investment, in this case from funds advised by Apax Partners, a private equity investment advisory firm also based in New York.
This represents the first institutional investment in CohnReznick. The firm plans to use the extra funding to accelerate its growth strategy, deliver more client services and attract talent. Apax will support CohnReznick in expanding service lines, developing technology for client solutions, entering new markets, developing talent and advancing its existing tech platform to drive further innovation and efficiency. Apax also plans to support CohnReznick in pursuing a targeted acquisitions strategy to further grow its client base. CohnReznick was the result of a
CohnReznick has over 5,000 global employees and more than 350 partners in 29 offices across the U.S. It earned $1.12 billion in revenue in fiscal year 2025. It ranked No. 16 on Accounting Today‘s 2024 list of the Top 100 Firms. The firm has clients in a variety of industries, including real estate, financial services and financial sponsors, private client services, consumer, manufacturing, renewable energy and government advisory.
“Our partnership with Apax is a milestone moment in CohnReznick’s history,” said CohnReznick CEO David Kessler in a statement Wednesday. “We have consistently delivered strong growth and cemented our position in the mid-market, thanks to our best-in-class talent, industry expertise, and comprehensive service offerings. This strategic investment from the Apax Funds will help us continue on our growth trajectory, expanding our solutions and geographic presence to meet client needs while continuing to create exciting career growth for our people. We were impressed by the Apax team’s track record in the professional services sector and their experience in driving operational excellence in complex businesses like ours, while continuing to create a best-in-class experience for employees and clients.”
Once the transaction closes, CohnReznick will operate in an alternative practice structure, as has become common with private equity funding of accounting firms CohnReznick LLP, a licensed CPA firm, will be led by Kelly O’Callaghan as CEO and provide attest services. CohnReznick Advisory LLC (which will not be a licensed CPA firm) will provide tax, advisory and other non-attest services, and will be led by Kessler as CEO.
“Over the past two years, we have built a strong relationship with the CohnReznick team and have been deeply impressed by the company’s culture, vision, and the consistent growth they have achieved,” Ashish Karandikar, a partner at Apax Partners, said in a statement. “We are excited to partner with David and the firm’s leadership team to fuel the next phase of growth. Together, we aim to accelerate service line expansion, explore new geographic opportunities, and drive innovation. We look forward to what we are confident will be a highly successful and rewarding partnership.”
Apax was advised by Guggenheim Securities, LLC and CohnReznick was advised by William Blair & Company, LLC. Koltin Consulting Group served as an additional financial advisor to both Apax and CohnReznick.
“It was love at first sight,” Allan Koltin, CEO of Koltin Consulting Group, said in a statement. “I can’t recall two firms and their leaders culturally and strategically aligning as fast as they did. When one side talked, the other side finished the sentence. No question in my mind, this combination will produce one of the next $2 billion firms in the accounting profession, but more importantly produce a lot of successful people and clients along the way.”
T&E solutions provider
The release enhances receipt and invoice processing. The AI can read, interpret and act on transaction data, going beyond simple text extraction to leverage machine learning to understand context, predict missing or unclear information, and adapt to different formats for more precise data extraction. The solution automatically maps expenses to one of 39 categories (so far) for Emburse Expense Enterprise users to streamline expense allocation and provides richer insights. It auto-fills and interprets data for employees, automating routine tasks for users. The AI identifies the applicable currency, date format and tax rates, and even common regional merchants to support finance teams globally. Finally, it can proactively extract the additional tip amount data required for meal expenses to save employees time when submitting expense claims.
All AI data is encrypted in transit and secured and processed on localized servers.
“Finance teams handle hundreds of detailed processes every day, where even one seemingly-minor error can lead to significant financial and operational consequences,” said Paul Nagy, chief product officer at Emburse. “With Emburse AI, we’re giving users a powerful tool to minimize manual effort, improve accuracy, and dramatically reduce time spent on managing expenses and invoices. This latest milestone for Emburse sets the stage for future AI enhancements, including agentic AI, to help finance teams operate more efficiently and strategically.”
Emburse plans to further improve its AI. Future updates will include AI-powered, predictive insights and more.
Emburse
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