AGN EMEA Tax Committee News
AI has begun to play a large part in the accounting industry, with some of the larger players in the market embracing it and heavily investing in it as an integral part of their standard service offering.
What impact could AI have on how we work in the future? Should AGN firms start to embrace AI now?
What is AI?
“Artificial intelligence is a machine’s ability to perform the cognitive functions we usually associate with human minds”. – McKinsey & Company
The recent wave of media coverage on AI following the launch of ChatGPT and other programs such as Microsoft Copilot, Bing AI and Google Bard (which are still in experimental stages) have created some interesting questions about how we might do tax work in the future.
A Goldman Sachs study, ‘The potentially large effects of artificial intelligence on economic growth’ by economists Joseph Briggs and Devesh Kodnani, published in March 2023, found that AI could substitute up to one-quarter of current work activities in the US and European economies.
When this technology is equipped with masses of programmed accurate tax data, regulations, and legislation, it could have the potential to assist in providing rapid analysis, real-time tax advice and guidance on routine tax questions. Tasks usually completed by juniors or support staff could be supplemented or even replaced by technology if the results obtained are more efficient.
Although these tools are nowhere near the stage where they could replace the traditional way we give tax advice or undertake compliance work, some larger organisations are increasingly looking at AI to play the role of a junior team member in other non-tax areas, using this technology to get better, faster results.
A recent survey of UK accounting firms by Intuit QuickBooks revealed that 45% of firms (of the firms surveyed) said they would make around €25,000 of investment in technology with AI features. Almost the same percentage of those surveyed believed that firms that don’t adopt AI in the next five years would face a lack of business growth due to increased relative administration burdens.
How could AI change the way we do tax work?
In an increasingly complex, competitive and fast-moving tax environment, we need to understand how AI can be deployed to transform outcomes for tax teams.
Below are some areas where forms of AI are already in use. How does it work, and how could it impact the future?
Most tax professionals receive numerous routine questions from clients and other colleagues weekly. They can be time-consuming and take time away from more valuable work. AI chatbot technology could speed up this aspect of our work and release our time to do more value-based advisory work.
AI Chatbot technology can be used to assess vast amounts of data, particularly in the compliance field where lengthy PDF procedures manuals or compliance spreadsheets can be “understood” by the technology and interact with team members asking questions.
We are already seeing the advances that technology is making in invoicing processing and links to digitised accounting packages. It is estimated that it takes 2 to 4 minutes for a competent experienced accountant to process an invoice. AI-based solutions have the capability to process between five and six million incoming invoices annually.
Website and PDF “Scraping”
Organisations (including accounting firms) are already using AI tools in “scraping” or collecting key data from websites such as Tax Authorities, Company Registrar sites for new companies or companies going through corporate recovery. The technology can also gather data from PDFs where information from tax forms can be accurately downloaded into formats such as Excel and do this accurately and consistently without using up the valuable time of staff.
Meeting & Video Transcription and Actions
One particular programme on the horizon (Microsoft Copilot) will be able to analyse meetings, prepare notes, suggest next steps and action points and even prepare proposals based on the content of the meeting.
International Tax Changes
We are increasingly being asked about international tax issues, and being a part of AGN assists greatly with this. AI can assist in providing real-time information on tax rates and tax treaties to provide a faster summary of international tax data for clients.
Reports / Commercial Messaging / Articles
Some firms, including our own, have been looking at how AI can bring a fresh approach to report writing, website updates and articles for the press/industry to communicate tax updates and changes. AI has the potential to offer a different approach to language and provide alternatives to the style and way things are normally communicated. Some of the technology we have trialled can alter the level of complexity or tone of the article based on the potential audience.
What does the future hold for the accounting industry?
Firms in our industry are giving AI serious attention, and Tax authorities across Europe are looking into how AI could improve the service they provide and become more efficient. There are clear benefits in AI at the moment, assisting with compliance roles such as invoice processing, dissemination of information and use of Chatbot technology to streamline processes.
The examples in the table demonstrate that AI is already being adopted by firms and, in the case of some of the Big Four, the large organisations in our industry are starting to make serious investments in this technology.
Undoubtedly, AI will continue to impact and hopefully improve our ability to provide clients with valuable tax services and advice. As a member of a global association, AGN creates opportunities to share our experiences (good and bad) with technology and embrace these changes together.
Brought to you by the AGN Tax Committee
If you have any questions in relation to this article, please get in touch with Iain Masterton.