AI for HR and Accounts: A Serious Business Risk?

I recently attended an event expecting to come away feeling more positive about artificial intelligence. Instead, I left feeling concerned.

Two speakers explained that they used AI to help with their business accounts. When I asked one of them about this, they confirmed that everything was still sent to their accountant for checking, which is exactly how AI should be used: as a support tool, with a qualified professional verifying the result.

The other speaker then explained that they also used AI in the middle of the night to deal with HR problems and write emails to difficult members of staff.

That worried me even more.

AI is not an HR professional

AI can produce a polished and professional-looking email in seconds, but it does not necessarily know:

• The employee’s contract or employment status
• The full history of the situation
• The company’s HR policies
• Whether a proper investigation has taken place
• Whether the employee has a disability or protected characteristic
• Whether the proposed action follows employment law and Acas guidance

An employer could send an AI-generated email believing it to be correct, while unintentionally creating a grievance, discrimination issue or employment tribunal risk.

What happens if the employee also uses AI to respond? The employer may then use AI to answer that response. Before long, two AI systems are effectively arguing with each other while the people involved become increasingly disconnected from the real issue.

Using AI does not remove responsibility. If an employer approves and sends an email, it remains the employer’s communication, regardless of who or what drafted it.

What about confidentiality?

There is also a serious data protection concern.

An employer might enter an employee’s name, health information, absence history, performance concerns or disciplinary allegations into an external AI platform.

Businesses must understand what happens to that information, where it is stored and whether they are legally permitted to share it. Confidential or personal employee information should not be entered into AI systems without appropriate safeguards.

AI cannot take responsibility for your accounts

The same risks apply to bookkeeping, accounts and tax.

AI can help explain terminology, create templates and support calculations. However, it may misunderstand tax rules, use outdated information or produce an answer that looks convincing but is incorrect.

The business owner or company directors remain responsible for keeping accurate accounting records and submitting correct information to HMRC and Companies House. If AI gets it wrong, “the AI told me to do it” is not a defence.

AI does not:

• Hold professional qualifications
• Carry professional indemnity insurance
• Accept responsibility for mistakes
• Understand every detail of your business
• Represent you during an HMRC investigation

If you use AI for accounts, the information should always be checked by an appropriately qualified bookkeeper, accountant or tax adviser.

Has AI gone mad or have we?

AI has not gone mad. The real problem is people placing too much trust in a tool they may not fully understand.

AI can be an excellent assistant, but it is not an HR manager, employment lawyer, bookkeeper, accountant or compliance adviser.

HR and accounts are two areas where mistakes can quickly place a business in legal, financial and reputational trouble. Use AI to help the experts, not to replace them.

Get the right business support

AA Compliance Compass provides practical support with bookkeeping, financial processes, policies, procedures, business documentation and compliance.

If you use AI within your business, make sure its output is checked by someone with the appropriate knowledge and experience. A quick AI-generated answer could prove extremely expensive if it is wrong.

Visit AA Compliance Compass Business Support Services to discover how we can help protect and strengthen your business.