AI in Accounting – 7 Best Practices to Protect Client Confidentiality

AI is changing how we work. But there’s a catch…

If you’re an accountant using AI tools like ChatGPT in your firm, you must be extremely careful. Why? Because one wrong move with client data could land you in serious trouble.

Let me explain… There are strict regulations and ethical guidelines that govern how we handle client information. And while AI can be a brilliant assistant, it’s also a risk if misused.

Here are 7 best practices to help you stay safe, stay compliant, and use AI in accounting with confidence.

Check out the full video on this topic here.

1. Understand Your Ethical and Legal Obligations

Every accounting professional is bound by a code of ethics. Whether you’re under the ICAEW, AICPA, or another body, you have a fundamental duty of confidentiality.

Here’s the key part: if you enter client data into AI tools without permission, you might be breaking the rules. And it’s not just ethics, you’ve also got laws to think about:

• GDPR (EU/UK)
• UK Data Protection Act
• CCPA (California)

These laws are serious. And they apply to how you use AI tools too. Always check your professional body’s AI guidance.

2. Never Input Real Client Data into Public AI Tools

You might think this is obvious, but many accountants still do it. Never enter anything that identifies a client into a public tool like ChatGPT.

That means NO:

• Names
• Addresses
• Dates of birth
• Financial data

Once it’s in, you can’t control where it goes.

3. Use Anonymised or Synthetic Data Instead

Want to test AI with client scenarios? That’s fine, but use safe data.

• Anonymised data: Remove anything that identifies the client.
• Synthetic data: Create fictional data with the same trends.

It keeps you compliant and still gives you great results.

4. Choose Secure AI Platforms

Not all AI tools are equal. The free version of ChatGPT? Not suitable for client-related work.

Here’s what I recommend: use business-grade tools. For example, ChatGPT Teams is what we use in our business. It’s designed for professionals and doesn’t use your data to train its models by default.

Other secure options include:

• Microsoft Copilot
• Claude (Anthropic)
• Google Gemini (Business versions)

Check their policies before using, and always choose tools that protect your data.

5. Create a Firm-wide AI Usage Policy

This is essential. You need a clear, written AI usage policy in your firm.

It should include:

• What tools are approved
• What data can and cannot be used
• Expectations for human review
• Guidelines on staff accounts and devices

It’s not just about protection. It also shows professionalism and leadership.

6. Train Your Team on AI Best Practices

Got a team? They need training.

Make sure everyone knows:

• What’s allowed
• What’s off-limits
• How to follow the policy
• Why this matters

Remind them that personal AI accounts are not for client work. Mistakes are too easy and too costly.

7. Maintain Human Oversight

AI is amazing. But it’s not perfect. You must always have a qualified human reviewing the output before anything goes to a client.

I like to treat ChatGPT like a junior assistant. It can help speed things up and improve quality, but it still needs supervision.

AI sometimes hallucinates (that’s the term for when it makes things up) and when it does, it sounds very convincing. Never let AI write unchecked reports, emails, or tax advice. Keep a human in the loop.

Want to Learn More?

If you want to stay ahead of AI and learn how to use it in your firm…

Join my free community: ChatGPT for Accountants & Bookkeepers

You’ll get:

• News and updates
• Image ideas
• Prompt help
• A growing group of forward-thinking professionals

Final Thoughts

AI in accounting can be a powerful tool. But only when used responsibly. These 7 best practices will help you protect your clients, your firm, and your reputation.

If you’re serious about using AI in your accounting firm the right way, check out the full video on this topic here.

FAQs

What’s the biggest mistake accountants make with AI?

Using real client data in public AI tools without thinking about the consequences. It’s risky and often a breach of confidentiality.

How do I know if an AI tool is safe to use?

Check if it offers enterprise-level or team-level security features. Always review its privacy policy and data handling terms.

Do I really need a written AI policy in my firm?

Yes. A written policy sets clear expectations, protects your firm, and shows clients that you take data security seriously.

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Wishing you every success on your pricing journey

The Value Pricing Academy Team