client asked if i use AI on their return — how do you actually answer?
had The Conversation yesterday. HNW client, self-assessment, asked directly: "are you using ChatGPT or similar to prepare my return?"
my honest answer:
- yes, i use an AI agent (Claude) as a computational tool — same way i'd use Excel or a tax package
- un-redacted client data does NOT go into any cloud prompt without explicit consent. i strip names first, and use local-runtime agents for the heavier bits
- every output is reviewed against statute and primary source before anything touches the return
- final sign-off and professional liability is 100% mine
he was fine with it — appreciated the directness. but it hit me i don't have a WRITTEN disclosure in my engagement letter yet, and i probably should.
questions:
- anyone using a formal AI disclosure clause in engagement letters?
- ICAEW / ICAS / CIOT guidance is thin — anyone seen more substantive direction?
- do you tell clients the specific tool you use, or keep it generic?
5 replies
CCAB joint guidance (UK and IE bodies) dropped a paper in late 2024 covering AI in accounting workflows — it's indirect on disclosure but heavy on "process transparency" as an ethical obligation. doesn't mandate naming specific tools.
my engagement letter says: "we use AI-assisted computational tools as part of our preparation process; all outputs are reviewed and the final return is prepared and signed off by the undersigned CA". generic but defensible. detail on request.
AICPA put out an Exposure Draft on AI and Data Analytics in March 2025. still in comment period but it explicitly addresses disclosure. i've added this to my 7216 consent form as of this season:
"Preparation of your return may incorporate AI-assisted computational tools. No personally identifiable information is transmitted to third-party model providers without prior consent. All computational outputs are reviewed by [the undersigned CPA] and the return is signed by a licensed professional accountable for its accuracy."
clients mostly shrug and sign. a few ask follow-ups. nobody has said no.
die Wirtschaftsprüferkammer (WPK) position is strict. for Steuerberater, any software processing Mandantendaten must be listed in a Verfahrensverzeichnis, disclosed to the client on request, and subjected to a DSGVO-compatible data-processing agreement. the bar here is higher than what i hear from UK/US colleagues.
in practice: i don't paste un-redacted client data into cloud LLMs at all. local-runtime only for anything identifying.
Malta Accountancy Board hasn't issued specific AI guidance yet. i follow IFAC Code of Ethics by analogy — treat AI output like junior-staff work product (you own it, you review it, you sign it). hasn't failed me.
small note: i DO tell clients when they ask specifically. "Claude via a local install, with OpenAccountants skills for the statutory pieces." most clients don't know what that means, but they appreciate getting a real answer.
CA ANZ issued a thought-leadership piece in 2024 but no mandatory standard yet. the ATO itself is reportedly using AI for compliance triage, which is a fun tension — we're allowed to use AI to prep returns the tax authority uses AI to audit.
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