The 'Future of Professionals' report by Thomson Reuters, released in August 2023, is a comprehensive study involving more than 1,200 professionals from the legal, tax & accounting, and risk professions employed by corporations, firms, and government agencies primarily from North America, South America, and the United Kingdom. The objective of the report was to grasp the macro-trends impacting these sectors, particularly focusing on the impact of Artificial Intelligence (AI) and automation.
Impact of AI and emerging trends
The survey revealed that over two-thirds (67%) of professionals anticipate AI and generative AI to have a transformational or high-impact change on their profession in the next five years. This expectation surpassed other factors like economic recession and increasing regulations. Professionals from tax and accounting firms specifically identified operational improvements as their top priority, with 59% citing productivity and 55% highlighting internal efficiency as crucial goals.
Operational improvements through AI
AI is poised to significantly enhance operational productivity and internal efficiency within tax and accounting firms. For example, one tax professional noted that AI could expedite the process of handling complex tax deductions and income streams, thereby optimising tax outcomes over a five-year period.
AI in client service and communication
The report also underscores the potential of AI in enhancing client service. AI-driven automation in drafting and editing communications and the ability to rapidly identify client needs and regulatory changes are key areas where AI is expected to bring substantial benefits. This enhancement is not limited to external client communications but extends to internal client services within corporate and government settings. For tax and accounting firm top priorities, 52% cited client communications, while 59% highlighted keeping abreast of regulation and legislation, and risk identification and mitigation. For professionals, particularly in the CPA field, staying updated and adapting to these regulatory and legislation changes is key.
AI's role in business protection
AI is expected to play a crucial role in business protection. In the realm of tax functions, AI is seen as a critical tool for reducing tax audits and penalties through improved data quality and trend identification in transfer pricing. Additionally, AI's ability to detect patterns and potential risks from large data sets, including contracts, is particularly valued by professionals.
Appreciation of professional skills
An interesting insight from the study is that nearly two-thirds (64%) of professionals believe that the advent of AI will lead to a higher appreciation of their professional skills. However, there are concerns about the demise of certain professions and the replacement of human skills. One-third of respondents (33%) see a darker outlook with AI resulting in the demise of their profession.
Challenges and concerns with AI
The introduction of AI brings its share of challenges. Despite the optimistic outlook, 66% of professionals acknowledge that AI will bring new challenges, particularly in adapting to the technology. The accuracy of AI outputs remains a significant concern, particularly in client-facing situations where AI might provide incomplete or inaccurate information. A quarter (25%) of respondents cited compromised accuracy as their biggest fear regarding AI, followed by widespread job loss (19%) and the demise of the profession altogether (17%).
Financial implications and predictions
Financially, the impact of AI is a matter of debate among professionals. While some professionals expect AI to lead to greater profitability due to reduced costs, others are concerned about the pressure to lower fees and the impact of AI on traditional revenue models. Nearly half (48%) of professionals predict that lower costs from AI use would lead to greater firm profitability. However, 60% of respondents indicated a greater proportion of work would be carried out in-house over the next five years.
Navigating the AI landscape
Professionals must navigate the AI landscape with decisiveness, focusing on opportunities for growth and addressing challenges proactively. This includes identifying which tasks should be automated, the role of human oversight, and upskilling talent to leverage AI effectively. Most professionals (over 90%) expect mandatory AI training for all professionals within the next five years.
Emerging career paths and training
AI is set to unveil new career horizons, with unconventional roles gaining prominence. More bandwidths will be freed up for higher-value work, enabling professionals to meet the strategic advisory needs of their clients. Two-thirds of respondents anticipate new career paths will become available due to AI, and over half (51%) predict more challenging work being assigned to junior level employees.
New services and pricing models
The report highlights that 40% of professionals expect new services to be offered by firms in the next 18 months, and 74% believe new pricing structures will emerge over the next five years, with 32% expecting these changes to occur within the next 18 months.
The 'Future of Professionals' report paints a complex but optimistic picture of the future of tax and accounting professions in the AI era. While AI offers vast opportunities for operational improvements, client service enhancement, and business protection, it also presents challenges that require strategic navigation and adaptation. The key for professionals is to embrace these changes, upskill, and adapt to the evolving landscape, ensuring they continue to provide value to their clients and stakeholders. As the report suggests, navigating this transformation with a clear understanding of AI's potential and its challenges will be crucial for success in this new era.
Copyright 2023. Article was made possible by Howie Griffiths.