While artificial intelligence (AI) may have once appeared daunting, it has now become a common presence in many workplaces. A recent survey of UK accountants and bookkeepers found that nearly all participants (99%) have utilised AI to assist clients over the past year. Consequently, discussions have shifted from questioning whether AI will impact the accounting sector and if firms need to embrace it, to firms embedding best practices and recognising the associated risks.
This blog post explores the current adoption of AI in accountancy, highlighting the opportunities and challenges it poses to the profession, as well as its potential impact on the accountancy job market in the UK.
Current applications of AI in accountancy
As noted, numerous UK organisations have begun implementing AI. As of January, PwC’s global CEO survey found that 42% of leaders in the UK have adopted AI technology, compared to 32% worldwide. Additionally, the Intuit QuickBooks accountant technology survey (2024) found that 54% of respondents anticipate their businesses will invest in AI, automation tools and machine learning in the coming year. The areas where AI – particularly algorithms, machine learning and ChatGPT – are currently being utilised in the accounting profession include:
- Compliance with employment and tax regulations.
- Automating administration tasks such as invoicing, calculations and processing payments
- Data entry and bookkeeping
- Client communication
- Financial analysis of client data
- Audit & risk assessment
Opportunities and challenges AI presents to the accounting industry
Boost to the economy:
A pioneering study by Sage and Demos in July 2024 predicted that the accounting sector could contribute £2 billion to the UK economy through AI adoption. Their research revealed that companies implementing AI-driven methods could see a tenfold increase in hiring and experience revenue growth three times greater compared to those not utilising AI.
New skills and career progression:
As generative AI takes on more tasks traditionally assigned to junior staff, workers entering the accounting industry now have greater opportunities to climb the career ladder at a faster pace. According to PwC, 68% of UK workers are confident that GenAI will create chances to learn new skills, while many believe it will enhance the quality of their work.
Accuracy and reliability concerns:
QuickBooks’ survey also revealed that 36% are concerned about the accuracy and reliability of information generated by AI. Generative AI, such as ChatGPT, is not immune to errors and currently only has access to data up to 2021, although users can indeed input their own real-time data. Furthermore, machine learning models are trained to generate the most probable answers based on the information or data with which they have been trained; therefore, they require a substantial amount of quality data and a degree of repeatability for accurate training. The ICAEW warns that in situations where outputs are inaccurate or misleading, machine learning models may “hallucinate.” This can also occur when they are asked something unique or uncommon, as they may lack sufficient data to produce a quality response.
Data and security:
The Bank of England’s 2024 AI and machine learning survey identified that four of the top five perceived risks of AI are related to data: namely, data privacy and protection, data quality, data security and data bias. Cybersecurity is also seen as the greatest systemic risk at present and is likely to remain so in the next three years. The second biggest concern in QuickBooks’ survey was data privacy and security (20%). Aside from GDPR, which governs the collection and use of personal data, it remains crucial to avoid pitfalls when entering client data to achieve insightful and useful financial analyses. Currently, there are no statutory regulations on AI in the UK, likely due to the rapid advancement of AI. However, in August 2024, Europe introduced the world’s first comprehensive AI legislation and the UK’s Labour government has recently announced plans to relaunch the UK’s Artificial Intelligence (Regulation) Private Members Bill, which aims to establish legislation.
AI’s impact on the accountancy jobs market
In 2024, we discussed how accounting jobs in London are evolving due to generative AI, highlighting the previously mentioned study by Sage that predicts the adoption of AI in UK accounting could create nearly 20,000 new jobs. Additionally, 56% of surveyed companies believe that adopting AI is essential for attracting next-generation talent, particularly in enhancing work-life balance, which is a high priority for accounting professionals in the UK, especially among those who are Generation Z (Gen Z).
However, a contrasting view suggests that some businesses may perceive AI adoption as a substitute for employees due to rising tax and national insurance costs. This perspective is supported by a recent study conducted by Pleo, which found that 57% of 500 UK finance leaders are looking to integrate AI solutions into their companies instead of hiring new employees. In addition, 60% believed that leveraging AI is easier than motivating employees.
Accountancy practice talent specialist, William Jarvis, shares his insight and why he believes there are certain aspects of accounting that simply cannot be replaced by AI.
“Advisory work is a necessity for humans to perform. It is central to what practitioners provide: the human element of explaining complexity in layman’s terms. Clients prefer engaging with people and while tax is a service that firms provide, their clients often value conversing with a knowledgeable professional who understands their needs, empathises and remains authentic.”
“Will it create jobs? Perhaps, especially in AI development,” Jarvis continues, “a client of ours recently hired someone to integrate this new technology into their firm. I view this as the tax industry evolving, along with the role of tax accountants. While compliance may not be fully automated by AI, I’m confident many firms will pursue it. The shift we’re witnessing indicates that advisory roles are becoming more essential to all tax positions – and machines will ultimately enhance compliance processes.”
Leading accountancy firm Forvis Mazars recently made headlines by launching an internal L&D plan designed to boost employees’ relationship skills. While the goal is to ‘enhance the confidence’ of Gen Z staff, the firm also noted that the training comes in response to the rise of computers capable of performing many basic tasks currently handled by junior staff, emphasising the importance of interpersonal skills that technology simply cannot replicate.
This notion relates to the core elements of AI in accounting firms. While the potential for integrating AI into the accountancy sector appears limitless, it’s also crucial for accountants to emphasise the human aspects of their roles that enhance the value they bring to clients. Rather than replacing jobs, AI proves most effective when managing tasks that do not fully utilise human capabilities. When provided with quality information in the correct manner, AI can deliver insightful information and analysis for the user, adding significant value.
Our accountancy practice recruitment team specialises in sourcing tax and audit positions throughout London and the surrounding areas. If you’re seeking your next opportunity, please contact our friendly team today to discuss your needs.
