Analysis: tasks performed by early career practitioners are those most vulnerable to AI so fewer tax trainees may be needed in the future
By Elaine Doyle, Patrick Buckley and Brendan McCarthy, University of Limerick
Rapid, disruptive technological change is a feature of modern life as we know it, and the sharp growth of artificial intelligence (AI) has sparked concern that many jobs are at risk of automation. AI will certainly impact different professions and sectors of the economy in different ways, depending on what the capabilities of the AI systems are at a particular point in time and on the distinctive features of a profession.
To really start making realistic forecasts about the impact of AI on work to inform and guide practice, we need to focus on specific professions in a robust manner. There is general acceptance that AI will have - and indeed already has had - a significant impact on tax practice. Several of the tasks traditionally associated with tax practice are highly susceptible to automation.
University of Limerick research forecasts that particular tasks are very likely to be automated while others remain less likely, at least for the foreseeable future. This suggests that the tax practitioner role won't disappear, but it will need to evolve.
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The tasks performed by early career practitioners are those most vulnerable to AI automation and significantly fewer individuals are likely to be needed at the tax trainee level. How then will tax practitioners replenish their more senior ranks if the bottom rungs of the career progression ladder are populated by significantly fewer trainees? In an extreme case, firms may face severe skills shortages years after engaging in significant automation.
Elaine Doyle is Professor of Taxation at University of Limerick and she began her career in the tax industry. "I joined PwC (then PriceWaterhouse) as a tax trainee in an era when there was one desktop computer in an office shared by two people. It was located in the corner of the room and accessed only occasionally. All client files were paper based, and communication was through the post.
"I really understood the nuts and bolts of tax computations because I had to do them manually. The type of tax compliance work I engaged in during my first few years is all fully automated now and tax trainees today are engaged in work involving professional judgement skills at a much earlier stage."
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AI and automation have certainly lessened the amount of time consuming 'drudge’ work that needs to be undertaken and frees up time to engage with clients on higher value work such as planning and professional advice rather than routine calculations. This makes the work more interesting. However, the accounting firms and the tax profession as a whole need to think seriously about the long-term, perhaps unintended, impact of this transition.
"I developed in-depth technical knowledge from spending long hours doing what would be considered routine tax work", explains Doyle. "This exposed me to the nuances and anomalies that occur when applying tax rules in a real-world context and allowed me to develop practical experience and a deep understanding of how tax works.
"A key question for the profession moving forward is whether it is possible to develop that knowledge and understanding without really engaging with detailed computational work for a sustained period of time. If it is not, it may impact on the degree to which tax practitioners can give robust professional advice, particularly when the generation of tax practitioners who have that deep level of computational experience are no longer working in practice."
Students who possess the right balance of skills will still do well in a tax career, but they will have to be more tech savvy
The reduction in time spent on routine tax compliance tasks as a result of AI will mean fewer tax trainees will be needed. If fewer trainees are recruited into firms, the pipeline of employees who will progress to more senior levels will also be reduced.
What next then for those considering a career in tax? Tax practice is changing significantly in terms of the use of technology, but we haven’t seen a slowdown in the levels of recruitment happening for tax trainees yet.
Students who possess the right balance of skills will still do well in a tax career, but they will have to be more tech savvy and be capable of adding value to a client beyond tax compliance work. As a profession, tax will need to evolve so that practitioners can advise on a wide range of business issues including sustainability.
Tax practitioners will therefore need to be competent in shaping and guiding the decisions and recommendations these AI systems will make, without having specific detailed knowledge of how particular judgements or decisions are made by an AI system. That’s going to be a big change for a profession that has always prided itself on precision and detailed technical understanding.
Along with tax trainees, educational institutions will also have to adapt for the future. Universities will need to include data analytics and sustainability content in all their tax offerings to appropriately prepare tax students for their role as future professionals.
Being able to communicate with clients effectively and present complex information in an accessible manner will also be important skills that need to be developed and enhanced in students. These skills are most appropriately developed using experiential and active learning techniques and are more easily developed in small classes. As such, educators will need to innovate in order to overcome the challenge of large class sizes.
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Prof. Elaine Doyle is a Professor in taxation in the Kemmy Business School at the University of Limerick. She is a former Irish Research Council awardee. Dr. Patrick Buckley is a Lecturer in Information Management in the Department of Management and Marketing in the Kemmy Business School at the University of Limerick. Dr Brendan McCarthy is an Assistant Professor in tax in the Deptartment Of Accounting and Finance at the Kemmy Business School at the University of Limerick.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
