AI is forcing the tax, audit & accounting profession to confront the way it cultivates professional judgment and how firms price their work and develop their leaders, according to Jennifer Lee Wilson, co-founder of ConvergenceCoaching, who has spent recent years coaching AI adoption inside firms.

Wilson observes that firms treating AI as a technology rollout will lose ground to those treating it as a human and business model transformation. "AI is as transformative a change in our profession as microcomputing was," she says, adding that “first movers always have a competitive advantage."

Building judgment in an AI-augmented firm

For decades, the tax profession developed judgment through repetitive work. This model was already failing on its own terms, Wilson explains, noting that data from her work with the AICPA's National Pipeline Advisory Group found that business majors who skipped accounting described it as "dull or boring and repetitive or mundane."

The inefficient learning model the profession has relied on to develop talent is also a reason it was not attracting young professionals, even before AI was a factor.

Wilson cautions leaders from worrying that losing the mechanical, repetitive work or using AI as a thought-partner will cause talent to lose technical skill or ability. She adds that historically professionals who once added columns by hand, ran a ten-key at speed, or typed financial statements on a typewriter did not become less technical when Excel or automated accounting software replaced this work. The intelligence behind the skill evolved instead of disappearing all together.

Several shifts, in Wilson's view, will replace the training ground that repetition once provided:

1. First, by creating simulation exercises for staff to experience the things we may have done manually before AI can junior staff to these tasks, without being forced to repeat them for years. Also, simulating actual client service and service delivery experiences with clients — such as a simulated audit conducted over two weeks, in which several team members rotate through different roles — can help develop skills and learning faster.
2. Another shift is methodological, with junior staff building judgment by working backward from what AI brings them and tracing the reasoning behind flagged issues rather than arriving at it through manual repetition.
3. A third transition is committing to experiential learning in which new team members are brought along to shadow real-life experiences, meeting with clients, referral sources, attending conferences, solving client issues, and fielding client calls — all at an earlier career stage than in the past.
4. A fourth consideration is altering the hiring criteria. The traditional way of hiring involving looking for very detailed, hard-working, even perfectionistic talent as primary criterion — but this is outdated in the AI era. Because AI absorbs rote tasks and will make room for more client interaction and advisory work, firms have room to hire for relational and anticipatory instincts as well, including candidates from outside accounting. For example, a client with a significant real estate niche could recruit a real estate major who could augment the accounting team with their knowledge of other aspects of the real estate industry and challenges that today's real estate business face.

The capacity AI creates, Wilson argues, should be redirected toward developing  a better understanding of each client and their unique needs. And that's something the old model never left room to provide.

Moving away from hourly billing

The profession's internal reckoning over judgment has a public counterpart in pricing. For example, accounting giant KPMG forced a 14% fee reduction from its own auditor, Grant Thornton UK, due to recent cost savings from its AI rollout. This shows that treating AI efficiency as grounds for a steep price cut assumes hours are the product being sold, Wilson says, when in fact, the profession was never selling hours in the first place.

Instead, firms need to shift performance and pricing conversations toward deliverables, outputs, and results, Wilson explains. To make this happen, pricing will have to be treated as a product marketing discipline rather than a byproduct of billed hours, she says, adding that tax firms that are serious about this transition need professional pricing consulting assistance or a dedicated pricing function for larger firms, which is a capability most firms have not yet developed.

AI adoption depends on leadership buy-in

Learning and pricing can be redesigned, of course, but neither will result in the required change without senior people within the profession being willing to adopt AI. While conventional wisdom holds that AI anxiety concentrates among junior staff worried about job security, Wilson has found that the greater adoption risk sits with senior people who wave off the need to engage with AI at all.

There is a common theme among some partners who think, My young people get it, I don't need to, according to Wilson. However, this line of thinking should worry firm leaders far more than staff-level fear does.

To address this issue, Wilson suggests structure training for peer groups rather than mixed audiences. In group training sessions, senior people are often reluctant to ask basic how-to questions, such as how to phrase a prompt or what a particular AI tool does, because junior staff are in the room and may already know the answer.

Also, she says such training needs to be reinforced with real-world, peer-to-peer learning opportunities. Create spaces for people to learn together while they complete work deliverables. Firm hackathons, in which staff bring client problems and experiment together is an example of this approach.

Repositioning talent instead of reducing headcount

The instinct in the face of time savings is either to cut headcount or fill the void by selling more, Wilson says; however, she rejected both notions recently when responding to a group of partners on this topic. “You may think of reducing your marketing personnel because AI can do more marketing writing or design work — but that would be short-sighted," she notes. "Instead, leverage a newly configured marketing group to reposition the value you offer clients and to help strategically package and price your services.”

She cautions firms not to just fill AI compliance time savings with more clients, either. Instead, firm leaders should develop the strategies and skills to move beyond providing a transactional compliance product and go deeper into the client relationship by delivering truly difference-making — and thereby more valuable — advisory services to the clients you already have.  

Admittedly, getting to this point requires firms and their leaders to fund the transition rather than simply layering it onto existing workloads. Indeed, part of this trade-off may involve redirecting short-term investment and forgoing some short-term returns.

However, the firms willing to make this short-term trade, in Wilson’s view, are the ones that stay independent and trusted because they invested in skills and strategies, and the enabling technologies, and will become more valuable to their clients than they were before.

You can find more about the challenges facing audit service professionals here