A quiet transformation is unfolding in the accounting world, driven not just by software upgrades, but by a rapidly growing divide in mindset. According to the Karbon AI 2025 Report, a gap is emerging between firms that are actively embracing artificial intelligence and those that continue to resist it.
The hesitation is understandable. For many accounting leaders, AI feels like a black box, unknown, unpredictable, and potentially ominous. There’s a lingering fear that automation could replace accountants, disrupt reliable workflows, or worse, cause errors in front of clients. Data security is another concern, particularly when client information is involved. But while fear slows progress, the numbers tell a different story.
The report found that although many firms already have AI capabilities built into their accounting software, only 37% invest in AI training for staff. As a result, these tools are often underused or misunderstood, leaving productivity gains on the table. Those who do train their teams see powerful results: an average of 66 minutes saved per employee per day, translating to 52 hours of extra productivity per person per year. That’s more than a full workweek reclaimed.
Rayhan Aleem, Co-Founder and CEO of Tax Star, shares, “Many accountancy firms are cautious because AI feels like a big unknown,” he explains. “They worry about accuracy, client trust, and compliance. There is often a comfort with familiar processes, so leaders prefer to stick with what they know rather than disrupt it.”
This fear, he says, is compounded by a lack of clarity around ROI.
“But from what we have seen at Tax Star,” Aleem adds, “Once accountancy firms experience how AI can work alongside their teams, much of that hesitation starts to ease. Firms also are effectively outsourcing the finance operations of their clients to the software, and therefore need to ensure that those processes are robust, safe and secure. AI has had a bad reputation of late and therefore can shake the confidence of accountants.”
Training, he believes, is the bridge between fear and adoption. “AI is not a plug-and-play solution,” Aleem says, adding, “Teams need to know how to use it, where it adds value, and when human judgment is still required. Without training, staff may underuse or misuse the tools. Firms that invest in training usually see the highest efficiency gains and the least risk. But we must also understand that in a world where technology, regulation and tax is constantly changing, there are competing demands on where firms need to focus when it comes to training.”
And while firms are juggling ever-changing regulations and client demands, the ones that prioritize AI training are seeing the best returns, with fewer risks.
To integrate AI safely, Aleem recommends a measured approach.
“The safest way is to integrate AI gradually,” he advises. “Start with repetitive back-office tasks where mistakes will not affect clients directly. As confidence builds, move into client-facing areas, always with human review in place. When AI is positioned as an assistant rather than a replacement, adoption feels much more natural.”
But there is a warning for firms that delay adoption. “The main risk is being left behind,” he says. “Clients expect faster reporting, real-time insights, and digital-first service. Firms that resist AI will spend more time on manual work, which slows delivery and raises costs. Over time, that hurts profitability, competitiveness, and retention.”
Security, of course, remains non-negotiable. “Firms should work with tools that are GDPR compliant, ISO certified, and encrypted,” Aleem says. “Internally, they need strict access controls, strong data handling policies, and regular audits. Just as important, they should explain clearly to clients how data is managed to build trust.”
As global AI regulations evolve, firms also need to keep pace with compliance. “Firms must ensure AI outputs comply with local accounting standards and tax regulations,” he stresses. “AI can guide, but final responsibility always sits with qualified professionals. At Tax Star, we designed the platform to align with UAE corporate tax rules and international compliance standards, so firms can adopt AI knowing it supports regulatory requirements rather than conflicts with them.”
Interestingly, while larger firms have the budget and in-house capabilities to explore AI early, Aleem points out that smaller firms can be more agile. “Smaller firms often move slower because resources are tighter and risk feels greater,” he says. “But they can also adopt faster because they can plug into off-the-shelf solutions without building complex systems.”
So where should a hesitant firm start?
“Start with education,” Aleem recommends. “Leaders do not need to transform everything overnight, but they should learn where AI can bring value and test it in a safe, low-risk area. Piloting one tool in a single process and measuring the results is often enough to build momentum.” In fact, many of the firms Tax Star works with begin small, automating a portion of their corporate tax process. Once they see the time saved, the rest follows naturally.
Firms that embrace AI not only unlock productivity, but they also future-proof their business. As Aleem puts it, “Early adopters are gaining a clear edge. It’s not about replacing accountants. It’s about equipping them with the tools to do more, better, and faster.”
