Death, Taxes, and AI: How Generative AI Will Change Accounting

As Ben Franklin famously said, there are only two certainties in life: death and taxes. We would argue AI should be added to that list. As LLMs continue to advance, AI is working its way into everything, from marketing to voice agents to professional services at large. Whether it’s PWC announcing a $1 billion investment into AI solutions, or Reuters setting aside $8 billion for AI dealmaking and development, firms are eager to establish themselves as market leaders in implementing this new technology — especially those that serve the accounting market. This shouldn’t come as a surprise to anyone. Bookkeeping, accounting, tax preparation and auditing are fields full of largely formulaic and repetitive exercises that would immensely benefit from generative AI’s gift of efficiency and time savings. And there are real, quantitative tailwinds that make this a particularly critical moment for accounting firms to lean into AI and machine learning. For starters, 75% of CPAs could retire in the next 10 years. Simultaneously, the profession is attracting fewer job entrants, with the number of U.S. students who complete accounting degrees falling. This means in the coming years, far fewer professionals will be available to handle existing client demand — and firms are already struggling to keep up. Luckily, genAI has hit the scene, and corporate finance and accounting workflows should benefit greatly from its capabilities. It is, however, important to be prescriptive about where specifically this new wave of LLM-based AI can help. At their core, LLMs are best at working with natural language. They are adept at summarizing research, answering questions, and delivering information that gets their prompter ~70% of the way to a definitive result. What they lack (for now!) is the ability to do complex calculations and quantitative analyses — two skills crucial to the accounting profession.