Intuitive or an impediment? AI’s impact on accountancy

Artificial Intelligence (AI) has already started to take hold of business in the UK. It has proved to be useful in a wide range of ways and in many different scenarios, including in the automation of tasks, the analysis of data and in predicting trends. It assists with productivity, creativity and in reducing costs. But how does AI impact the accountancy industry and which direction will it take in 2025 and beyond? Here we consider these points.

>What is AI?

AI technology permits computers to emulate human intelligence and simulate human learning. AI can help to predict trends and identify patterns in data sets and is also useful in the automation of tasks.

AI allows computers and other technological devices to learn, reason and behave in ways that usually require human intelligence and learning. It can encompass a vast array of disciplines, ranging from software, computer science, data analytics, linguistics and hardware engineering.

Through the use of algorithms, AI is able to learn and evolve its behaviour in order to carry out analysis and make decisions.

How is AI used in accountancy?

AI has multiple uses in preparing accounts, assisting cloud-based software and in tax planning. It can generate data sets at top speed and highlight trends and patterns that may otherwise be missed.

AI is also effective in the management of information, permitting accountants to work on documents in real time, reducing the amount of time wasted on obtaining the latest version of a file.

What impact is AI having on the world of accountancy and auditing?

AI has helped to streamline the way routine tasks are handled and completed. This helps to reduce human error and allows accountants to concentrate on assisting clients in minimising their tax liability.

Generative AI, which allows users to create new content, also helps auditors to analyse unstructured data. Generative AI enables accountants to analyse a document’s narrative in order to generate a response.

AI can also help with audit reports and in streamlining audit workflows. It frees auditors’ time to devote to work on more challenging and pressing matters for their clients.

Looking ahead: AI in 2025 and beyond

Whilst there have been concerns AI will affect job security these have been quelled by AI’s proficiency in automating everyday tasks and providing helpful analytical data.

Gavin Leake, Technical Consultant at Mercia, echoes this sentiment. He predicts:

‘By 2025, AI is expected to transform accounting and auditing. Routine accounting tasks will become automated, improving accuracy and enabling real-time reporting.

‘In auditing, AI will enhance data analysis and risk detection, shifting auditors' roles from compliance to advisory. Ethical challenges will emerge, particularly around accountability for AI-driven errors, ensuring professional judgment remains crucial in an increasingly automated environment.’

In order to maximise efficiency and stay ahead, accountants should seek to make best use of AI and its advantages. Used effectively, AI can aid in providing a wide range of insights, enabling accountants to supply their clients with the best possible service.

In the future, AI could even assist accountants with more complex tax planning and in developing effective tax strategies for clients. The Institute of Chartered Accountants in England and Wales (ICAEW) has stressed its belief that AI will ultimately ‘complement established practices’ rather than replace accountancy jobs. In an insightful article, the ICAEW stated that ‘human intellect will always be an integral aspect of the role, for evaluating and understanding data or offering consultancy services’.

Looking ahead

No matter how AI evolves, accountants and auditors should ensure they make best use of the benefits it provides. The automation of mundane tasks and the use of AI in data analysis only serves to help accountants by freeing up their time to devote to their clients.