iscoverThe rise of AI raises concerns about its impact on critical thinking. A look at how the accounting profession can adapt and thrive.
AI in Accounting: What will it do to thinking skills?
06 October 2025
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5 minute read
Artificial intelligence is poised to revolutionize the Australian accounting profession, but alongside the promise of efficiency and innovation, a nagging concern persists: if AI works as promised, will accountants lose – or fail to develop – the ability to think critically?
Skill development & the automation revolution
This concern around staff development isn’t entirely new. The automation wave of the early to mid-2010s, which saw widespread adoption of accounting software that produces financial reports directly from bank feeds, prompted reflection on what was lost along the way.
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“Accountants who began their careers before automation took-off likely had extensive experience with manual transaction classification, from sorting shoeboxes full of receipts to reconciling printed bank statements.” says James McPhedran, co-founder of Elfworks. “Though inefficient, this work honed critical thinking skills. By making thousands of small judgments, accountants developed an intuitive understanding of the clients business, enabling them to spot issues, nuances, errors, fraud, and opportunities.” says McPhedran.
Accountants entering the field after the early/mid-2010s often lacked this foundational grounding. While automation undoubtedly boosted productivity and profits, questions arose about the erosion of fundamental accounting knowledge, the loss of professional judgment development, and a diminished ability to detect errors or fraud. As firms automate and use AI, what abilities are being lost?
Skill development and the AI revolution
Now, as AI adoption accelerates, similar worries are surfacing.
“If staff are no longer required to manually grind through documents to build an understanding of legislation, rulings, case law, trust deeds, and other client documents, will junior staff develop the ability to think independently? Will they lose the ability to pick up nuances in client information?” asks Ian Youngman, co-founder and Managing Director of Elfworks.
Without a thorough grounding in the fundamentals, will accountants of the future struggle to handle "edge cases" – the out-of-the-norm scenarios that demand a firm grasp of accounting principles?
“We see AI adoption and the potential loss of critical skill development as two sides of the same coin”, says Youngman.
The solution? AI driven learning
Elfworks is championing AI-driven learning solutions as a complement to AI adoption. According to Elfworks, their guiding principles to address the issues are to:
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When AI is used to aid critical thinking on client problems (such as with the Advice function on the Elfworks platform), the same AI solution should be able to instantly produce a Learning Module with learning outcomes based around the critical thinking processes involved in that specific Advice function
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There should be the option to create Learning Modules around these critical skill areas that target different experience levels e.g., Junior, Intermediate and Advanced
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The Learning Modules created should be optional
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The Learning Modules created should be shareable within the organisation.
The company further argues that the beauty of applying AI's processing power at this problem means the Learning Modules targeting critical thinking skills can be hyper-personalised to firm clients and their issues. It also means AI can be used to create Learning Modules that address potential skill losses not just from the AI ‘revolution’ but also skill losses from the automation ‘revolution’ i.e., Learning Modules that simulate the manual classification of client transactions that occurred prior to automation of accounts from bank statements.
“For senior staff, time saved with AI can be allocated to high-value client work. This is an obvious way to make more money within a firm. For more junior staff, part of the time saved with AI can be allocated to critical skill development to benefit the staff member, the firm and the profession as a whole” says McPhedran.
The challenge for the accounting profession is to harness the power of AI while preserving and cultivating the critical thinking skills that have always been its hallmark.
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