Accounting automation’s intelligent future

Intelligent process automation (IPA) represents a transformative approach combining robotic process automation (RPA), artificial intelligence (AI), and other advanced technologies to streamline complex business processes.

What makes IPA particularly attractive for accounting professionals is its ability to execute the judgment-intensive processes that characterize modern accounting work. Unlike earlier automation technologies that primarily addressed structured, repetitive tasks, IPA goes further, using advanced AI capabilities to make predictions and adaptations based on algorithms. So, while IPA can’t make judgments like humans, it can support more nuanced decision-making.

AN EVOLUTION IN AUTOMATION

IPA represents a major leap forward for automation technologies. For instance, an IPA system might analyze historical audit findings, current regulatory guidance, and client-specific risk factors to suggest appropriate testing approaches for an audit engagement — a level of assistance that far exceeds what RPA can provide. This capability to support professional judgment represents a fundamental shift in how automation technologies can serve accounting professionals.

The integration of generative AI within the IPA framework further distinguishes it from previous automation approaches. Whereas traditional automation executes existing processes, IPA with generative capabilities can help design new processes, draft professional communications, generate analytical frameworks, and create documentation templates tailored to specific client situations. This creative dimension enables IPA to serve as both an implementation tool and a creative partner in professional service delivery.

Another distinctive feature of IPA is its sophisticated orchestration capabilities. Rather than automating isolated tasks, comprehensive IPA implementations coordinate activities across multiple systems, departments, and even organizations. These capabilities could help accounting firms automate complex, multistage processes like financial close procedures, tax-compliance workflows, or audit engagements in their entirety, rather than merely automating discrete components of these processes.

AGENTS OF CHANGE: REASONS FOR ADOPTING IPA

IPA’s emergence coincides with the rise of agentic AI (see the June JofA article, “Agentic AI Poised to Change the Way CPAs Work“). As the name implies, agentic AI demonstrates abilities associated with agency. It can set complex goals, devise a plan to accomplish them, and adjust to situational changes with little to no human intervention. Because agentic systems can operate with greater autonomy than generative AI, they enhance IPA’s capabilities by introducing more sophisticated decision-making and problem-solving approaches.

IPA and agentic AI can help the accounting profession address one of its biggest challenges: the overwhelming burden of repetitive, high-volume tasks. Automating routine activities like data entry, reconciliations, and compliance documentation would allow CPA firms to reclaim considerable staff time. Though some time must remain dedicated to oversight, the time saved could free up CPAs to focus on higher-value work — such as analysis, strategic recommendations, and client advisory services (see the section “Potential IPA Implementations”) — enhancing both client relationships and firm performance (or business performance in the case of corporate finance and accounting).

IPA adoption also has important talent implications, especially among younger professionals less interested in the repetitive work that has traditionally made up much of a young accountant’s workload. By automating mundane tasks, firms create more engaging roles centered on problem-solving and client interaction, making accounting careers more attractive.

The financial case for IPA adoption is compelling on multiple levels. Organizations implementing comprehensive IPA solutions typically achieve meaningful cost reductions in finance operations by streamlining and eliminating unnecessary steps. According to a recent report by McKinsey, one insurer improved efficiency by 40% and significantly increased customer satisfaction by leveraging four levers: lean practices, digital tools, analytics, and IPA. In addition to reducing costs, IPA also accelerated processes and minimized errors. These efficiency gains translate directly into improved profitability, which is particularly important considering fee pressure remains a persistent challenge for accounting service providers.

Perhaps most importantly, IPA helps CPAs address evolving expectations. Clients and employers today expect their accountants to provide real-time insights, proactive guidance, and strategic partnership (either with the client or, in the case of corporate CPAs, company management). IPA can help CPAs meet these expectations by handling routine processes autonomously, freeing professionals to deliver more sophisticated analysis.

From a risk management perspective, IPA offers significant advantages in compliance and quality control. Automated processes follow consistent protocols, reducing the likelihood of human error in calculations or regulatory filings. Chanyuan (Abigail) Zhang Parker, in her paper, “Intelligent Process Automation in Audit,” Journal of Emerging Technologies in Accounting (Vol. 16, Issue 2, p. 69 (Fall 2019)), noted that IPA can improve audit quality by testing the full population of the client’s data, then selecting and investigating the most suspicious items. Improved audit quality will support auditors in meeting GAAS and PCAOB standards, while also helping their clients or employers better comply with GAAP requirements. These improvements not only protect firms and companies from potential liability but also enhance client and executive confidence in the reliability of financial information.

As regulatory complexity increases across jurisdictions, IPA provides CPAs with tools to manage compliance burdens more effectively. Systems can be programmed to monitor regulatory changes, flag potential compliance issues, and even generate appropriate documentation. This is particularly valuable in specialized areas like tax compliance, where firms using advanced automation can handle more returns during tax season without increasing staff size. The resulting capacity allows firms to maintain service quality during peak periods without the traditional stress on personnel and systems.

IPA represents not just a technological shift but also a strategic opportunity for CPAs to redefine their professional value proposition. By embracing these tools, accounting professionals can transcend their historical role as processors of financial information to become true business advisers, leveraging both technological capabilities and human expertise to deliver unprecedented value to clients. This transition is not merely beneficial but increasingly essential for practice sustainability in an evolving marketplace.

POTENTIAL IPA IMPLEMENTATIONS

As IPA evolves, it may transform accounting as we know it, but even now its potential use cases abound. Consider the following hypothetical examples:

Automated audit documentation and testing

Accounting firms and finance departments can implement an IPA solution that combines RPA with machine-learning capabilities to transform the audit workflow. The system can automatically retrieve client financial data from various sources (e.g., ERP systems, banking platforms, and spreadsheets), normalize it, and perform preliminary analytical procedures. The advanced AI analyzes historical patterns to identify unusual fluctuations or high-risk areas requiring deeper investigation.

When testing transactions, the system can select statistically valid samples, retrieve supporting documentation, and perform initial validation checks. For example, when examining accounts receivable, the IPA solution can match invoices to shipping documents and payments, flag aging discrepancies, and even generate confirmation requests. Auditors now focus primarily on evaluating exceptions, applying professional judgment to complex matters, and communicating with clients. This implementation can reduce documentation time significantly and increase the coverage of tested transactions, improving both audit quality and efficiency.

Comprehensive audit risk assessment and planning

CPA firms can implement an IPA system to improve their audit risk assessment and planning process. The system can analyze the client’s industry, financial performance, and control environment against a vast database of historical audit outcomes. Using natural language processing, it can review prior audit findings, management letters, and regulatory filings to identify recurring issues or risk factors. The system can then apply machine-learning algorithms to develop a preliminary risk assessment that considers both quantitative factors (e.g., unusual financial ratios and transaction volumes) and qualitative indicators (e.g., management changes and system implementations).

Based on this assessment, the IPA solution can recommend specific audit procedures, sample sizes, and specialist involvement tailored to the client’s risk profile. As audit evidence is gathered, the system will continuously update its risk assessment and suggest modifications to the audit approach.

With this kind of implementation, however, data quality is key. Machine learning assumes all previous audit data is 100% labeled. This creates the risk that if, for example, any previous misstatements were not identified as such, the machine learning could be pulling from inaccurate data. To meet standards and assure data quality, human intervention is needed to evaluate the appropriateness of previous audit data and ensure the accuracy of data the algorithm will learn from.

Comprehensive financial close automation

Corporations can implement IPA solutions to streamline their month-end close process. An IPA solution can begin by automatically importing data from subsidiary ledgers, reconciling intercompany transactions, and identifying discrepancies. Machine-learning algorithms can review account fluctuations against historical patterns and business activities, flagging unusual variances for controller review. The system can then generate journal entries for predictable adjustments (e.g., accruals, amortization, and foreign currency translation) and route them for appropriate approval.

Once entries are posted, the IPA solution can generate financial statements, validate them against predefined rules, and compile supporting documentation. The cognitive component can learn continuously from reviewer actions, refining how it identifies issues and suggests corrections. Beyond saving time, this can improve internal control documentation, reduce audit preparation time, and help the finance team deliver more timely insights to business leaders.

Financial planning and analysis

CFOs can implement an IPA solution in their office to improve the budgeting and forecasting processes. The system can automatically collect actual performance data, market indicators, and operational metrics from disparate sources. Using machine-learning algorithms trained on historical relationships, it can generate baseline forecasts that account for seasonality, business cycles, and known future events.

What makes this truly intelligent is the system’s ability to incorporate unstructured data from news sources, customer feedback, and industry reports to adjust projections. For example, when social media sentiment about a product line declines, the system can adjust revenue forecasts before sales reports show the impact. The IPA solution can also conduct scenario planning by simulating the financial impact of potential business decisions or economic changes. During review meetings, finance leaders can modify assumptions in real time and immediately see the cascading effects across financial statements.

Client advisory services transformation

A CPA firm offering outsourced accounting services can employ an IPA solution that combines transaction processing efficiency with advisory insights. Such a system can connect directly to clients’ bank accounts, credit cards, and sales platforms to automatically categorize transactions based on learned patterns. When exceptions occur, the system can apply machine learning to suggest proper classification based on similar historical items. When giving advanced technologies access to client data, adhering to best practices in data protection becomes paramount. Engaging a CPA to conduct a SOC 2 examination is one of the most effective ways to mitigate risk and protect sensitive information.

For accounts payable, the solution can extract invoice data, match it to purchase orders and receiving documents, flag discrepancies, and route it for approval based on client-specific rules. The cognitive component can analyze spending patterns, identify potential duplicate payments, and suggest vendor consolidation opportunities. On the receivables side, the system can monitor customer payment behaviors, predict cash flow, and recommend collection strategies.

What distinguishes this from simple automation is the integration of predictive analytics that generate client-specific insights on profitability trends, working capital optimization, and growth opportunities. This implementation can allow the firm to serve more clients with improved transaction processing efficiency while increasing revenue through advisory services.

Tax compliance and planning

CPA firms that offer tax services can deploy an IPA solution that refines their tax preparation process. The system can begin by automatically extracting relevant data from prior-year returns, client-provided documents, and third-party sources like brokerage statements. It then can apply current tax rules to identify deductions, credits, and potential compliance issues.

The system can recognize changes in tax law and client circumstances, suggesting adjustments accordingly. For complex scenarios, the IPA presents the CPA with alternative treatment options and their implications. The system can also maintain an audit trail of decisions and supporting documentation.

For planning, IPA solutions can generate multiple tax scenarios based on proposed client or corporate actions (e.g., business acquisitions, retirement distributions, and estate planning), calculating projected outcomes and highlighting optimization opportunities. This implementation can reduce preparation time while increasing the identification of tax-saving opportunities.

Integrated tax and regulatory compliance monitoring

For multinational corporations, an IPA solution can help with continuous monitoring of changing tax and regulatory requirements across multiple jurisdictions. The system can scan regulatory databases, tax authority announcements, and legislative updates using natural language processing to identify relevant changes. It can then assess the potential impact on the company’s operations by analyzing historical transactions against new requirements. For example, when a jurisdiction changes its sales tax rules, the system can identify affected business units, calculate potential liability, and generate compliance recommendations. The cognitive component can prioritize regulatory changes based on financial impact and implementation complexity, creating a risk-weighted action plan. For routine filings, the system can prepare draft returns, reconcile data sources, and identify potential audit triggers before submission.

This implementation can reduce compliance penalties and help the tax department shift from reactive filing to proactive planning. Companies can receive early warnings about regulatory changes, so they can adjust business processes before compliance deadlines rather than scrambling to address issues afterward.

IPA PRE-IMPLEMENTATION PLANNING GUIDELINES

For firms to realize IPA benefits, they must plan meticulously. To help with that preparation, we have created downloadable IPA pre-implementation planning guidelines to provide a structured yet flexible framework for organizations to strategically plan their IPA initiatives. The guide addresses key considerations while allowing businesses to customize components based on their specific objectives, operational requirements, and resource constraints. CPAs can use these guidelines for purchasing applications that include IPA, customizing applications with IPA features to meet organizational needs, or developing and integrating IPA with existing systems or data.

Various studies and industry reports from organizations like Gartner and McKinsey have consistently shown that projects have significantly higher success rates when they incorporate components like the ones included in our pre-implementation planning guidelines.

Effective planning anticipates potential challenges, aligns IPA initiatives closely with strategic objectives, and ensures adequate resource allocation. Organizations that invest in comprehensive pre-implementation assessments experience smoother transitions, accelerated return on investment, higher stakeholder satisfaction, and sustainable long-term success.

About the authors

Li Wang, CPA/ABV, CMA, Ph.D., is a professor in the George W. Daverio School of Accountancy at the University of Akron College of Business. Jim Bourke, CPA/CFF/CITP, CGMA, is managing director of Advisory Services at Withum Smith+Brown. Bo Ren, CPA, CMA, Ph.D., is a teaching assistant professor in the Department of Accountancy in the Gies College of Business at the University of Illinois Urbana-Champaign. To comment on this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.

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