Actionable insights for tax and audit firm leaders
Foreword
Foreword
Liz Zimick
President, Corporates
Thomson Reuters
The real AI risk for accounting & audit firms: not moving fast enough
The futurists were partially right. AI is fundamentally transforming the accounting and audit profession. However, unlike the doomsday prophecies that envisioned armies of robo-accountants taking everyone’s job, the real-world impacts of AI are turning out to be quite a bit more nuanced.
Now that a significant majority (81%) of tax and audit firm professionals are regularly using AI in their day-to-day workflows, many professionals are reaping the benefits of efficiency gains. But that rapid adoption has also introduced a surprising mix of risks that no one saw coming. These trends are spotlighted in our fourth annual Future of Professionals Report, and here we go further, offering guidance to firm leaders on how to navigate those rapid-fire changes currently unfolding across talent, client-facing, and financial dimensions.
Top talent demands top tech
One of the most important findings in our research is that accounting and audit firm employees increasingly see professional-grade AI tools as a non-negotiable part of their jobs. Specifically, 26% of tax and audit firm professionals now say they would turn down a role that did not offer access to professional-grade AI tools. Moreover, 29% of professionals who are experiencing a gap — between the value they are getting from AI and what they would expect from the technology capabilities available in the market today — are already considering leaving their positions as a result.
That means firm leaders need to do more than embrace the idea of AI; they need to show their teams they are investing in the technology and training needed to stay competitive in this fast-moving market.
Clients expect more
It’s not just employees who see the value in AI. According to our research, 89% of corporate tax clients say it is very important, or even essential, to receive AI-enabled quality improvements from the firms they work with. Not surprisingly as a result, nearly two in five (39%) decision-makers in tax and audit are already feeling “some” or “significant” client pressure to move faster on AI, and 32% of tax and audit firm professionals believe they’ll be at risk of losing clients within the next 12 months if they can’t up their game.
We’ve moved past the period of AI optics; clients are expecting more concrete results from their firms, and those that cannot deliver quickly will be at risk of being replaced by those that can.
The bottom line
And then there are the operational and business management aspects of the AI equation. Nearly half (48%) of tax and audit senior leaders say they are already under financial pressure to act faster on AI, but one-third (34%) of them have yet to make significant changes to their operating models in response to AI. Compounding that challenge, some 35% of tax and audit firm professionals say they are currently using AI tools their firm has not authorized in their day-to-day work, introducing a host of new governance and operational risks.
Together, these findings illustrate a significant set of change management and leadership challenges that will not be solved with a user license for the latest large language model. Firms need to recognize the scale of the transformation taking place right now regardless of whether they choose to embrace it or ignore it, and they need to act quickly if they want to stay on the right side of history.
"Accounting and audit firm employees increasingly see professional-grade AI tools as a non-negotiable part of their jobs."
Tax and audit firms under pressure
Talent
Measure | Total tax and | 1-3 employees | 4-29 employees | 30 or more |
|---|---|---|---|---|
Facing pressure | 45% | 31% | 44% | 55% |
Seeing consequences | 26% | 17% | 28% | 37% |
Client
Measure | Total tax and | 1-3 employees | 4-29 employees | 30 or more |
|---|---|---|---|---|
Facing pressure | 54% | 51% | 48% | 63% |
Seeing consequences | 32% | 21% | 30% | 39% |
Financial
Measure | Total tax and | 1-3 employees | 4-29 employees | 30 or more |
|---|---|---|---|---|
Facing pressure | 49% | 48% | 48% | 51% |
Seeing consequences | 18% | 16% | 16% | 21% |
Facing pressure = proportion of respondents reporting they face “some” or “significant” pressure currently.
Seeing consequences = proportions already seeing consequences, or expecting to do so within 12 months.
The talent clock
Tax and audit firms have long wrestled with a talent shortfall; AI now represents both an opportunity to address that shortfall and a risk to existing talent if firms move too slowly. A quarter of professionals (26%) would not accept a job offer from a firm without professional-grade AI access, and 29% are already considering leaving, or plan to do so within two years, if the gap between their expectations of AI and their lived experience persists. Firms that cannot offer credible AI capability are not only less productive today: they’re less likely to attract and retain the professionals they need for tomorrow.
The client clock
Nearly two in five (39%) senior leaders in tax and audit are already feeling “some” or “significant” client pressure to move faster on AI. Should their organization fail to make sufficient progress, 32% of professionals in this sector expect to see tangible consequences (such as losing clients) within 12 months. But the risk is here now: nearly a third (32%) of corporate clients* are already reconsidering, or planning to reconsider, firm relationships within the year.
The financial clock
Nearly half (48%) of tax and audit senior leaders report being already under “some” or “significant” financial pressure to act faster on AI. Yet a third (34%) of tax and audit professionals say their firm has not made significant changes to its commercial model in response, highlighting a gap between felt urgency and visible action.
*The corporate professionals who took part in our 2026 research work primarily in legal (50%) or tax and accounting (33%) functions, and represent organizations across a range of sizes, with over half reporting annual revenue of $1 billion or more.
The liability firms aren’t tracking
Every tax and audit engagement depends on a clear record of how the work was done. Yet 35% of tax and audit firm professionals say they use AI tools their firm hasn’t authorized for work. Any of those uses that touch client engagements leave a hole in that record: no log of what the tool was given, what it produced, or whether anyone checked it against the standard the firm would otherwise apply.
If a piece of work is ever challenged, in peer review, in a regulatory inquiry, in a malpractice claim, the firm may not be able to say what role AI played in producing it.
This isn’t a question of whether the firm permits AI. Unauthorized tools are already in use, on live client work, whether the firm has decided that or not. The question is whether the firm can account for it.
The same exposure runs through the talent and client pressure already covered in this section: firms that can’t see what’s happening can’t manage it, and the gap between what leadership assumes and what their people are actually doing is itself a liability.
Strategic paths
Firms are already moving in different directions in terms of what they are trying to achieve with AI, and professionals typically see the paths as fluid: 44% view them as evolutionary stages rather than fixed destinations, and 29% say different parts of their organization are already pursuing different paths simultaneously.
Each path is legitimate; each leads to a different kind of firm; and each plays out differently depending on size.
AI to Elevate
Human expertise-centered, AI enabling faster and more ready delivery, commanding greater value.AI to Scale
Productivity-first, AI focused on more with less, increasing capacity, responsiveness and consistency.AI to Reimagine
AI at core, rebuilding from ground up to create new value.Deferring
1 in 10 professionals are either unsure of their firm’s strategic ambition for AI, or believe it does not have one.
Consequences of path choice
AI to Elevate
AI to Elevate
An Elevate firm centers human expertise, using AI to handle routine work so professionals can focus on complex, high-judgment advisory. Fees hold or rise on the strength of results, not throughput. The client relationship runs deep: the firm has real visibility into what’s happening with the client, personally or within the business, and uses that to provide advice the client trusts.
For smaller firms, that means owning a niche, such as digital asset taxation, international structuring, sector-specific compliance, deeply enough that price comparison becomes irrelevant. For larger firms, it means putting efficiency gains back into advisory capability rather than absorbing them into margin.
Because professionals have more time, they can build the kind of relationship that lets them see further into a client’s situation and act on it sooner. The trade-off: a smaller addressable market, and a premium that requires constant defending as AI raises the baseline.
which niche or specialism is worth owning deeply enough that price stops being the comparison clients make.
AI to Scale
AI to Elevate
Scale firms focus on producing better work without proportionally scaling headcount. AI handles routine tasks so professionals can work in a more sustainable way: less time pressure, fewer bottlenecks, more consistency. For smaller practices, this makes busy seasons more manageable and reduces strain on recruitment. At larger firms, it unlocks capacity that changes what’s commercially viable, and a lighter workload is also a stronger pitch to the people firms are trying to attract and keep.
For clients, the impact is immediate: faster turnaround, more predictable delivery, and less friction on routine compliance work, without losing professional judgment where it matters. But Scale is unlikely to be the endpoint. As AI-enabled efficiency becomes a baseline expectation, the differentiator will be what firms choose to do with that freed-up capacity to offer more responsive advice, deeper relationships, and higher value services.
whether freed-up capacity goes toward growth, work-life balance, or higher-value advisory work, because drifting into all three at once dilutes each.
AI to Reimagine
AI to Elevate
A Reimagine firm won’t improve the existing model; it will replace it. Instead of periodic, reactive compliance, clients could receive ongoing visibility into their financial position, including real time insights, proactive prompts, and advice that arrives before decisions are made, not after. The relationship could shift from annual deliverables to continuous support, with work spread more evenly across the year and fewer last minute pressures. Over time, the firm would begin to function less as a compliance provider and more as a standing advisor, closer to a strategic partner than a periodic service.
The transition risk is high, particularly for smaller firms with limited runway to absorb the investment before returns arrive. But the firms that complete this transition will be the hardest to compete with.
whether the firm has the runway to fund the transition before the new model starts paying for itself.
Deferring
Deferring
Not every firm has settled on a path, but those that don’t have a clear AI strategy are still being assessed by the same criteria. That absence of a clear direction may be defensible for a small minority, such as sole practitioners nearing retirement, or firms in stable, low-competition niches. For everyone else, delay is a strategic choice that carries a risk of falling behind.
Four priorities, wherever you are
Priority
Govern the tools your people are already using
What this means
High tool use without a governance framework is a live liability. Approving one professional-grade AI tool built on verified professional content, alongside clear usage guidance, changes that risk profile more than a broad policy with no tooling behind it. Professionals are clear about the minimum standard: tools must safeguard confidential data (96%), ground outputs in authoritative content (94%), and produce reasoning that can be explained and defended (90%). These are the conditions Fiduciary-Grade AI is designed to meet.
If you’re a small practice
Approve one tool and write a single page: what it’s for, who is accountable for outputs before they reach a client, and what to do if the tool produces something you can’t verify. If you can’t write that page today, that’s the gap to close first.
If you’re a larger firm
Formalize what your team is already doing informally. Audit shadow AI as a signal, not just a compliance problem. It tells you where your approved provision hasn’t reached. Ensure your policy names tools, not just principles.
Priority
Know where your firm is going, even if the path isn’t fixed
What this means
Most firms start with Scale because volume pressure and busy-season compression are the most immediate problems. But Scale should not be a destination in itself. The firms that get the most from it are those already asking what they want the freed-up capacity for, more time back for their people, deeper client relationships, or more complex advisory work. That answer should shape how Scale is implemented, not be decided after the fact.
If you’re a small practice
Is your growth model built on doing existing work more efficiently, or on charging more for work that requires deeper expertise? Either is valid. Knowing which one you mean makes the downstream decisions, on tooling, pricing, and hiring, considerably clearer.
If you’re a larger firm
Map where each part of your firm currently sits. Different teams pursuing different paths simultaneously is legitimate, but it requires clarity on what each is building toward and where investment goes.
Priority
Understand what you and your people want from AI, and make sure it’s what you’re actually building toward
What this means
The question of what to do with freed-up time is not just strategic, it’s a people question. Some professionals want the time back; and others want AI to free them for more complex, fulfilling work. A firm that deploys AI for throughput without understanding which of these its people are hoping for risks a misalignment that shows up in attrition before it shows up anywhere else. Getting this right also becomes a talent proposition: once you can say clearly what AI means for the quality of work your people do, that’s one of the most compelling things you can tell a prospective hire.
If you’re a small practice
With a small team, this is a direct conversation rather than a policy question. What does your team, or the person you’re hoping to hire, actually want AI to change about their working life? The answer should shape how you deploy it and how you talk about it when recruiting.
If you’re a larger firm
The professionals most likely to leave are mid-career, operationally critical, and already the most embedded AI users. They have the clearest view of the gap between expectation and reality. Understand what they want from AI, make sure your deployment reflects it, and use that story externally. Firms that can articulate a clear AI value proposition for their people will have a meaningful advantage in a market where over a quarter of candidates are already screening for it.
Priority
Decide what work early-career professionals still need to do
What this means
If junior intake falls on the assumption that AI compresses the path to professional judgment, someone still has to provide the structured development that makes that true. The firms best placed are those that answer this question before AI removes the option, not after.
If you’re a small practice
If you have no junior staff, the question applies to you directly: what work do you still need to do yourself to maintain the professional judgment you charge for? Name at least one task category that must stay human-led, and why.
If you’re a larger firm
Identify the work early-career professionals still need to do before AI handles it by default. Build that into role design and supervision now, before junior intake falls and the opportunity to get it right has passed.
About this report
Thomson Reuters
Thomson Reuters (TSX/Nasdaq: TRI) informs the way forward by bringing together the trusted content and technology that people and organizations need to make the right decisions. The company serves professionals across legal, tax, audit, accounting, compliance, government, and media. Its products combine highly specialized software and insights to empower professionals with the data, intelligence, and solutions needed to make informed decisions, and to help institutions in their pursuit of justice, truth, and transparency. Reuters, part of Thomson Reuters, is a world-leading provider of trusted journalism and news.
For more information on Thomson Reuters, visit tr.com and for the latest world news, reuters.com.
Thomson Reuters Institute
The Thomson Reuters Institute brings together people from across the legal, corporate, tax & accounting and government communities to ignite conversation and debate, make sense of the latest events and trends and provide essential guidance on the opportunities and challenges facing their world today. As the dedicated thought leadership arm of Thomson Reuters, our content spans blog commentaries, industry-leading data sets, informed analyses, interviews with industry leaders, videos, podcasts and world-class events that deliver keen insight into a dynamic business landscape.
Visit thomsonreuters.com/institute for more details.
Download the report
Download your copy of the full report today.
