CPA Practices NAICS 541211

Sep 29, 2025 - Accounting Industry Embracing AI and Automation

• Automation and AI are transforming how tax firms get work done, cutting out repetitive tasks and boosting accuracy, according to a recent The Future of Tax Automation webinar from Thomson Reuters. Nearly 80% of tax professionals believe AI will have a major impact on their industry within the next five years, and more than half of firms are already seeing returns from the investments they’ve already made. New tools like optical character recognition, automated verification, and generative AI can scan documents and pull out key data, cross-check for errors, and create detailed summaries. In addition, the Webinar estimated that AI would save accounting pros about 5 hours of busy work per week for a per employee added value to the organization of $24,000. The shift towards automation is especially important as accounting firms face heavier workloads and staffing shortages.
• CPA practices face a staffing shortage after several years of attrition through retirements and middle-aged CPA burnout that has left the accounting industry about 300,000 workers short with not enough fresh recruits to replace them. The US Bureau of Labor Statistics shows CPA firm employment flat throughout 2024 and for the first half of 2025, coming in at -0.2% year over year in June. The shortage is likely to affect CPAs and taxpayers alike. CPAs are overloaded with work - which makes them prone to mistakes and filing errors - leaving many without the bandwidth to take on new clients. Those lost clients can then potentially make their own mistakes doing taxes themselves, creating a domino effect of accounting headaches. The problem could be compounded by the IRS itself, which was already lacking enough accountants to efficiently process 2024 tax returns only to face a 30% auditor staff cut by the Trump administration.

• The US government ended the Internal Revenue Service’s Direct File program, a free electronic tax return system, in mid 2025. Direct File was created during the Biden administration and became quite popular for its time savings and ease of use. Tax prep firms and lobbyists claimed Direct File was unnecessary because free tax filing software programs already exist, although they are difficult to use. The program had been in a holding pattern since the Department of Government Efficiency (DOGE) targeted it for closure at the beginning of the year. The non-partisan Taxpayers Protection alliance supported the move and says Direct File costs too much and of the 450,000 taxpayers who logged into it for the 2024 tax season, only 140,800 of those filed a completed return. A pilot program when it started, Direct File had expanded to half of the US this year’s tax season before being axed.
• CPA credentialing is declining across all company sizes, reflecting a shift in corporate hiring practices and licensing trends, according to INSIDE Public Accounting. Between 2020 and 2024, the average amount of corporate staff that held a CPA license dropped from 56% to 48%. Larger companies report even lower CPA licensing among staff at 41%. The trend is driven by fewer accounting graduates taking the time to complete the 150 hours of required training for a license, as well as firms expanding into non-traditional markets that require different skill sets than traditional accounting. Several states have created different pathways to CPA licensure - such as Ohio, Georgia, and Minnesota - acknowledging the existing process is too expensive and time-consuming. Alternative licensing pathways typically involve graduation with an accounting degree combined with experience in the field and passing a CPA exam.