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Report: 49 Percent of Tax Prep Activities Can Be Automated

By:
Chris Gaetano
Published Date:
Dec 15, 2015
RobotsRemember that report put out by McKinsey and Company saying that roughly 20 percent of the tasks a CEO does could be done by machine? That was just a taste. A new interactive infographic, using the same methodology, says that 49 percent of tasks associated with tax preparation, and 12 percent of those associated with accounting and auditing can, today, be automated. 

This does not, by any means, indicate that 49 percent of tax preparers and 12 percent of accountants and auditors can be replaced by machines. The McKinsey report stressed that, rather than thinking in terms of whole professions that can be automated, their research looks specifically at individual tasks, which it felt was a more accurate way of looking at how automation will affect the working world.

So, for example, the study broke what tax preparers do into several discrete functions: advise others on financial matters, calculate tax information, correspond with customers to answer questions or resolve concerns, develop financial plans for clients, examine financial records or processes, explain regulations or procedures, interview clients to get financial information, update professional knowledge, and verify accuracy of records. McKinsey says 49 percent of these tasks can be done by machine (though neither the report nor infographic say which of these tasks can be automated, and why). 

What this might mean is that, rather than entire occupations disappearing (or, in the case of CPAs, 49 or 12 percent respectively), what exactly people do within these professions might simply change. The more rote kinds of tasks (we're sure you can think of many within the profession) can be handled by computers, freeing time and energy up for people to concentrate on the more creative, strategic tasks. So, rather than being your replacement, the computer may be more of an enhancer, helping people focus on different aspects of their jobs, rather than replacing them entirely.