The use of AI continues to grow in accountancy as practices use it to speed up tasks, draft advisory reports, automate workflows or take meeting minutes.
However, delegates at Mercia's Tax Technology Conference were reminded that no matter how sophisticated the tool, the responsibility for the work produced stays with the practitioner.
Table of contents
Ultimate responsibility
Jane Mellor, Head of Professional Standards at the Chartered Institute of Taxation (CIOT) and the Association of Tax Technicians (ATT), told the conference that whether AI is being used to help automatically prepare and submit tax returns, or take meeting notes, accuracy must be ensured.
Mellor says: ‘Ethical frameworks are there to help people to know the right way to approach things from an ethical perspective and really, they are to safeguard you and to help you to do the right thing in your tax work day-to-day.
‘Members are ultimately responsible for any work they produce. That’s one of the key things that is stated in professional conduct in relation to taxation for regulated members and firms. It means that work produced, whether that includes the use of AI or not, has to meet those ethical requirements.’
These are required by the Professional Conduct in Relation to Taxation (PCRT), the framework authored by seven accountancy bodies and binding on all their members, whether in practice, industry or the public sector.
PCRT does not make an exception for AI-assisted work. Firms now need to actively demonstrate that AI use hasn't compromised the standards clients and HMRC are entitled to expect.
Five fundamental principles
PCRT rests on five fundamental principles — integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
Mellor says: ‘Key things in meeting the integrity requirements when you’re using AI are the principles of transparency and explainability. These can really help to make sure that you meet ethical requirements.’
Objectivity is the requirement to avoid bias, conflict of interest or undue influence which can override your professional and business judgement. However, there are many ways in which bias can impact the use of AI systems.
She explains: ‘As a user you can introduce bias into the system as well. AI is a bit like a puppy, so it’s quite keen to please you. And if you ask a question in a particular way, it will try and answer it in a way that it thinks you’ll be happy with. It’s really important to phrase your prompts and your questions appropriately, so that you don’t introduce bias in the way that you are asking things.’
Treat the output like a junior’s
Mellor's practical advice is to review AI output the way you'd review the work of a less experienced team member. Don't take it on trust. Check the sources. Ask whether the conclusion actually fits the client's circumstances. If a client queries something, you need to be able to explain how the conclusion was reached.
Mellor concludes: ‘Ultimately, you don’t want to be subject to disciplinary action. If people aren’t using AI appropriately, and if clients are getting the wrong advice and complain to disciplinary authorities, then, that can be very difficult. And it’s important that you’ve met your ethical requirements in order to try and avoid that situation.’
The practical takeaways
Mellor shared her top tips for firms using AI:
- Put an AI usage policy in place and make sure everyone knows it exists.
- Review engagement letters to reflect AI use.
- Train staff properly, and record it as CPD.
- Choose AI tools carefully and check their outputs.
- Keep records supporting the advice you give.
Not all equal
With 106 tools now listed on HMRC's Making Tax Digital (MTD) software finder, Tom Herbert, Technology Editor at AccountingWeb, warned the Tax Technology Conference that they are ‘not all created equal’. He advised accountants to trust their own instincts when selecting what’s best for them and their clients.
Herbert says: ‘You’re the expert, you know your firm, you know what works for you, you know your clients. You know what works for them and more importantly, what will work with them for MTD. Have confidence, don’t be pushed around or, or swayed. But keep an open mind about what software could do for them.’
Evolving rapidly
The conference also had sessions exploring how firms can successfully integrate technology by creating an agile culture and how it should be applied in real-world tax workflows.
The pace of change in tax technology can feel overwhelming. What was clear from every session in Mercia’s Tax Technology Conference is that while the tools are evolving rapidly, the fundamentals of good tax practice remain the same: professional judgement, client focus, and strong ethical principles. The conference is available on demand.