Your team is already using ChatGPT. Here's what ICAEW expects you to do about it

AI is already part of the working week in most UK practices. In a survey of 515 UK accountants and bookkeepers commissioned by Xero in August 2025, 98% said their practice used AI in some way for day-to-day tasks, and 47% used it at least once a week (Xero, Cebr and Censuswide, November 2025).

Firms' own rules are further behind. In Tolley's spring 2024 survey of 446 UK tax practitioners, only 8% of those in private practice said their organisation had created an AI policy in the previous 12 months, and 13% had run AI training for staff. In the same survey, 77% had some level of concern about the reliability of public AI tools (Tolley, May 2024).

So people are aware of the risks. The gap is in the paperwork and in the everyday habits that would let a practice stand behind how its staff use AI.

What does ICAEW expect of a practice that uses AI?

ICAEW expects a practice to know which AI tools are in use and approve them properly, keep client and confidential data out of public tools, train the people who use them, check what the tools produce with professional scepticism, and tell clients when AI has been used. It applies the Code of Ethics rather than writing a new rulebook.

ICAEW hasn't written a rulebook for AI. Its guidance applies the Code of Ethics to how firms use it, and the same few points come up again and again.

Its dos and don'ts ask firms to "ensure you have appropriate policies and guidelines in place on how AI should be used", and to make sure the people using it "are adequately trained". They say to "keep client and confidential internal data off public AI tools", to "review and challenge AI outputs with professional scepticism, avoiding automation bias", and to "be transparent" about when AI has been used (ICAEW, Dos and don'ts of using AI).

In July 2026, ICAEW went further on confidentiality. Firms "should ensure that confidential client information is not entered into systems without appropriate due diligence, contractual protections and internal approval", and should understand "where data is stored, who can access it, whether it may be used to train models, and how outputs are monitored". As ICAEW's Regulatory Policy Director, Sophie Wales, put it: "AI and other digital tools can bring real benefits, but they do not reduce a firm's ethical responsibilities" (ICAEW Regulatory News, 28 July 2026).

What that looks like in a small practice

You don't need a compliance department for any of this. In a practice of five to thirty people, it comes down to five pieces of work and one habit.

1. 01An anonymous staff survey. Ask the team which AI tools they use, on which accounts, and whether client information has ever gone in. Keep it anonymous, or you won't get honest answers.
2. 02An approved tools register. One business AI tool, with a data processing agreement, that doesn't train on your data, marked as approved for client work. Everything else marked as not approved, including free personal accounts.
3. 03A short AI policy. Two pages that say which tools are allowed, what never goes into them, who checks the output, and who to tell when something goes wrong.
4. 04A line in your engagement letter. In the Tolley survey, 83% of in-house tax teams said they expected to be told if their external advisers had used AI, but only 50% of those in private practice thought their clients wanted to know (Tolley, May 2024). A short clause closes that gap before a client asks.
5. 05A light usage log. One line per piece of client work where AI helped, recording who checked it and what they checked it against.

The habit is checking the output. AI tools can be confidently wrong, and they often miss recent changes to rules, rates or deadlines. Whoever signs the work is responsible for it, whether or not AI helped.

Why do small practices struggle with AI training?

Because nobody arranges it. A lack of training was the top barrier to using more AI in the Xero survey (36%), and only 18% of people in organisations of 2 to 50 staff expected their employer to provide it (Ipsos, 2025). In a small practice, if the partners don't book it, it doesn't happen.

Lack of experience came a close second in the Xero survey (32%), and in the 2025 study for Chartered Accountants Worldwide, 52% said insufficient skills and training was the biggest barrier to the profession adopting AI (Ipsos for Chartered Accountants Worldwide, April 2025).

It doesn't need to be long: ninety minutes on how the tools work and how to check what they produce covers most of it, with the firm's policy as the handout.

What should a practice do about AI this month?

Four things: send an anonymous staff survey, choose one approved AI tool, write a two-page policy and a tools register around what the survey shows, and add an AI clause to your engagement letters. Together they take a practice from unmanaged AI use to rules it can stand behind, inside a month.

• Send the anonymous survey this week, and give people five working days to answer.
• Pick the AI tool your practice will officially use. Check first whether one comes with the Microsoft 365 or Google Workspace plan you already pay for.
• Write the policy and register around what the survey tells you, then share them with the team.
• Add the clause to your next batch of engagement letters.

If you'd like to do it yourself, my AI governance kit for accountancy practices has the documents, mapped to ICAEW's guidance, with a step-by-step guide. If you'd rather I did it with you, that's the team AI rollout.

Sources

1. 01Xero, with Cebr and Censuswide, Accounting sector profits surge with AI adoption, 3 November 2025. Survey of 515 UK accountants and bookkeepers, 22 to 29 August 2025. xero.com/us/media-releases/uk-accounting-sector-profits-surge-with-ai-adoption
2. 02Tolley, How Generative AI is Transforming Tax Practice. Survey of 446 UK tax practitioners, March to May 2024.
3. 03ICAEW, Dos and don'ts of using AI. icaew.com/technical/technology/artificial-intelligence/generative-ai-guide/dos-and-donts
4. 04ICAEW Regulatory News, Protecting client confidentiality: internal controls and the ICAEW Code of Ethics, 28 July 2026. icaew.com/regulation/regulatory-news/regulatory-news-2026-07/protecting-client-confidentiality
5. 05Ipsos for Chartered Accountants Worldwide, AI and the Future of the Chartered Accountancy Profession, April 2025.

This article is general information, not professional or legal advice. Check current ICAEW and ICO guidance for your practice.