Artificial intelligence is here, and it’s reshaping workflows, collaboration, and compliance across the accounting industry by integrating into accounting software.

From automating workflows to improving audit accuracy, AI accounting software is reshaping how CPA firms and finance teams work.

If you’ve been wondering what that means for your firm, you’re not alone. We’ve pulled together answers to some of the most pressing questions about AI in accounting.

What Is AI Accounting Software?

AI accounting software is any tool that uses artificial intelligence to streamline accounting and financial processes that are typically manual or require human oversight. 

It can perform key accounting functions like AI lease abstraction, AI data extraction for audits, transaction categorization, anomaly detection, and reporting faster and more accurately than traditional systems.

AI accounting software also learns from patterns in financial data. It can automatically identify errors or inconsistencies, flag anomalies before they become audit issues, and even predict future financial trends. Unlike standard accounting tools that rely on rigid rule sets and manual data entry, AI-powered systems adapt, improve, and scale with your business.

Is AI Accounting Software Being Adopted?

According to recent industry surveys, 41% of accountants are already using AI to automate workflows, and 56% say a firm’s value drops if it doesn’t use AI. Gartner predicts that by 2028, at least 15% of day-to-day work decisions will be made autonomously through agentic AI.

For CPA firms that have embraced AI, the results are hard to ignore. The AI in accounting report from CPA.com says AI accounting software is helping CPA firms:

• Spend up to 70% less time on manual tasks

• Achieve 5x faster review cycles for tax prep and audits

• Gain 2–3x greater client capacity without increasing headcount

As compliance standards evolve, PCAOB findings highlight audit deficiencies, and standards for audits become stricter, AI’s influence will only grow.

What Are the Core Use Cases for AI in Accounting?

We’re seeing four main applications of AI accounting software:

1. AI in Lease Accounting: AI takes the complexity out of compliance with ASC 842, GASB 87/96, and IFRS 16. Instead of sifting through contracts line by line, AI-powered tools automatically extract key data points like lease terms, renewal options, and payment schedules to generate journal entries and disclosures with audit-ready precision.
2. AI in Audits: AI performs risk assessments, anomaly detection, and full-population testing, flagging outliers or inconsistencies across datasets in seconds.
3. AI in Financial Due Diligence: AI accelerates due diligence by standardizing and analyzing financial data across entities, so performance trends and deal decisions can be made with ease.
4. AI in Bookkeeping: automates daily transaction categorization, bank reconciliations, and real-time reporting. It learns from past activity to classify entries accurately, helping firms close books faster and reduce month-end headaches.

How Does AI Support Compliance With ASC 842, GASB 87/96, and IFRS 16?

Across ASC 842, GASB 87/96, and IFRS 16, challenges are similar. Here’s how AI helps firms stay compliant, confident, and audit-ready across every framework.

ASC 842

For private and public entities under U.S. GAAP, ASC 842 requires nearly all leases to be recorded on the balance sheet. That means right-of-use (ROU) assets and lease liabilities for operating and finance leases.

Where AI helps:

• Lease Identification & Extraction: AI uses natural language processing (NLP) to scan contracts, flag embedded leases, and automatically extract key data points like lease terms, renewal options, and payment schedules.

• Automated Calculations: Once the data is captured, AI applies the proper ASC 842 rules to calculate ROU assets, lease liabilities, and amortization schedules.

• Continuous Compliance: When leases change (renewals, modifications, impairments), AI instantly remeasures balances and updates disclosures.

• Audit-Ready Outputs: Every calculation and assumption is logged, giving auditors a transparent trail of how results were generated.

GASB 87 & GASB 96

GASB 87 covers leases, while GASB 96 extends similar principles to subscription-based IT arrangements (SBITAs) for government entities. Both add major workload for finance teams already balancing complex reporting cycles.

Where AI helps:

• Data Capture from Lease and SBITA Contracts: AI automates data extraction for both physical and digital agreements to save hours of document review.

• Standard-Specific Logic: AI distinguishes between GASB 87 and GASB 96 requirements, applying the correct formulas for recognition, measurement, and amortization.

• Automated Reporting: Disclosures, schedules, and footnotes are generated automatically with the right GASB terminology and classification.

• Ongoing Updates: When contracts renew or terminate, AI reclassifies and recalculates immediately so the next CAFR or audit report reflects the most accurate data.

IFRS 16

For international organizations, IFRS 16 mirrors much of ASC 842 but introduces its own recognition and measurement nuances.

Where AI helps:

• Cross-Standard Flexibility: AI accounting software can distinguish and apply IFRS 16-specific rules across multi-entity, multi-country portfolios.

• Disclosure Alignment: AI generates IFRS 16-compliant disclosures and reconciliations that align with global reporting requirements.

• Scalability for Global Audits: AI ensures data consistency across regions and entities, reducing the risk of AI financial reporting discrepancies in consolidated financial statements.

How Does AI Maintain Quality in Audits?

AI maintains quality in audits by testing 100% of journal entries, identifying anomalies, and validating data across entire populations in seconds. 

In a recent address, PCAOB Board Member Christina Ho emphasized that traditional audit sampling covers a fraction of transactions. That can leave room for oversight and inconsistencies. 

With AI, audit coverage can go deeper, fewer missed risks, and higher confidence in every engagement.

What Are the Benefits of AI in Accounting?

The benefits of AI in accounting are:

1. Improved Accuracy & Data Integrity: AI reduces the risk of human error by automatically extracting, validating, and reconciling financial data. Firms get standardized, audit-ready data every time.
2. Time Savings & Scalability for CPA Firms: Manual work slows growth. AI removes that barrier by automating repetitive tasks. In the end, firms can take on more clients without increasing headcount.
3. Stronger Client Relationships: With routine work automated, accountants can focus on advisory, insights, and proactive guidance instead of data clean-up.
4. Enhanced Transparency and Audit-Readiness: Every calculation, remeasurement, and report generated by AI is backed by a clear, traceable data trail. This transparency builds client confidence and satisfies regulators and auditors.

What Are the Myths & Misconceptions of AI in Accounting

The misconceptions of AI in accounting include:

Myth 1: “AI will replace accountants.”

At Crunchafi, we don’t think AI will replace accountants. We believe it will empower them.

While AI takes over repetitive, manual tasks like data entry, reconciliation, and reporting, accountants can focus on higher-value work like advisory, analysis, and client strategy.

The goal is not for firms to cut staff. It is to scale faster, reduce burnout, and be more strategic.  

Myth 2: “AI isn’t secure.”

AI systems are only as secure as the company behind them. 

However, as CPA firms are dealing with sensitive client data, it is important for the AI accounting software you choose to have SOC 2 certifications, GDPR compliance, end-to-end encryption, and opt-in training protocols.

Myth 3: “AI is too complex to implement.”

This isn’t the case. Ideally, CPA firms will build their own domain-specific AI models. That means they will have their own accounting-native LLMs that are more accurate and aligned with accounting vocabulary and regulations.

Additionally, AI will continue to integrate into financial systems and accounting software. AI agents will be able to operate within the source data to reduce latency.

Should You Consider Adopting AI Accounting Software?

Firms that start integrating AI today will be the ones leading their industry tomorrow. The key is knowing how to start.

Here’s where to begin:

• Identify Your Workflow Pain Points. Which parts of your process are slowing you down? Data collection? Lease calculations? Reporting? Start where accounting automation AI will have the biggest impact.

• Define Your Compliance Priorities. Whether it’s ASC 842, GASB 87/96, IFRS 16, or PCAOB audit standards, make sure any AI solution you choose was built with compliance at its core.

• Start Small, Scale Fast. Pilot the software with one service line or client segment. Once your team sees the time savings and accuracy gains, expanding across the firm will be easier.

• Train Your Team. AI is best when it's paired with expertise. Encourage your staff to explore and experiment with AI accounting software.

How Do You Evaluate AI Accounting Vendors?

Below is a list of the five qualities your AI accounting software needs to have:

• Security: Look for SOC 2 Type II certification, GDPR compliance, and end-to-end encryption.
• Compliance: Verify support for ASC 842, GASB 87/96, and IFRS 16 standards.
• Scalability: Make sure the software can scale with your firm and integrate into your existing accounting system.
• Ease of Use: Choose a platform that your team can navigate without weeks of training.
• Support: Make sure there’s real, responsive, CPA-level support behind the technology.

Crunchafi is redefining what AI can do for accounting and finance teams. Purpose-built by CPAs, for CPAs, our suite of products automates the manual, simplifies the complex, and ensures every number stands up to audit scrutiny.

With Crunchafi, you get more than software. You get a trusted partner that understands the pressure of tight deadlines, evolving standards, and client expectations. From lease accounting to data extraction, our suite of products helps firms scale smarter, deliver faster, and work with confidence.

Ready to get started? Book a demo today and see why many of the top 400 CPA firms are using Crunchafi to fuel their accounting processes.

Additional FAQs

What is AI accounting software?

AI accounting software uses artificial intelligence to automate and optimize accounting tasks such as data entry, reconciliations, reporting, and compliance. It learns from financial data to detect errors, flag anomalies, and generate accurate journal entries and disclosures.

How is AI used in lease accounting?

AI in lease accounting works by extracting data from lease documents, classifying leases, and calculating right-of-use (ROU) assets and lease liabilities under standards like ASC 842, GASB 87/96, and IFRS 16. It also updates disclosures automatically when leases change for ongoing compliance and audit-ready accuracy without manual spreadsheets.

Can AI improve audit quality and compliance?

Yes. AI enhances audit quality by testing 100% of transactions, detecting anomalies, and standardizing audit documentation. It reduces manual sampling errors, flags potential risks early, and provides transparent audit trails for regulators.

Is AI accounting software secure for sensitive financial data?

Leading AI accounting software vendors prioritize data protection with SOC 2 Type II certification, GDPR compliance, and end-to-end encryption for data in transit and at rest. Many also use opt-in training protocols to prevent client data from being used to train AI models.

How does AI impact ASC 842, GASB 87, and IFRS compliance?

AI simplifies compliance with ASC 842, GASB 87/96, and IFRS 16 by automating lease data extraction, classification, and calculation of right-of-use (ROU) assets and liabilities. It applies the correct standard-specific logic, generates required disclosures, and remeasures balances when leases change.