AI Is Collapsing Time: What Accounting Firms Must Do Next

In episode 170 of the Woodard Report Podcast, Joe Woodard spoke with Kacee Johnson about the state of AI adoption across the accounting profession. Kacee recently stepped out of a senior leadership role at CPA.com, where she helped shape technology strategy for firms and worked closely with the AICPA community. She is now the Executive Director of AI Native Accounting Foundation, which focuses on education, research, recognition, and scholarships related to AI in the profession.

The conversation focused on a question many firms are still trying to answer. Are they adopting AI in a way that creates real transformation, or are they simply layering tools onto old workflows and hoping for quick results.

Two very different responses to AI

Joe opened by asking Kacee what has surprised her most as she looks across firms. Her answer drew a clear distinction between two different approaches. Kacee said many firms are treating AI as an adoption moment and responding with urgency because they believe they are behind. That urgency often leads to a fast rollout of tools layered onto existing processes.

She said the more interesting firms are the ones stepping back and treating AI as an operating model shift. Instead of asking what tool to plug in next, they are asking what the firm should look like if AI is doing a significant share of the work.

Joe asked whether a quick reaction is necessarily bad if it produces immediate efficiency gains. Kacee said the problem is not speed by itself. The problem is that many firms move before they define the problems they are trying to solve or the opportunities they want to pursue. That leads to fragmented systems, disconnected data, and firms chasing efficiency without fixing the business model underneath.

Kacee said, “AI is collapsing time.” In firms that still price, reward, and organize work around time, that creates real pressure. Even if the firm avoids the issue internally, clients will eventually notice that AI is reducing the time involved in completing work and begin asking harder questions about value.

Watch Episode 170 here

Upskilling matters as much as software

Joe then raised a growing concern inside firms. Team members worry that AI may displace their jobs, especially if they are not in leadership positions. Kacee said she is hearing that concern regularly. She described cases where firm leaders do not want vendors discussing time savings too openly because they fear it will unsettle staff. At the same time, practitioners are asking what they are supposed to do with the hours AI has freed up.

That tension points to a larger issue. Kacee said firms need to use the opportunity to upskill their teams rather than treat the extra capacity as a threat. The work is not disappearing. It is shifting. More value will come from judgment, analysis, review, and decision support. She also stressed that advisory work is not limited to one service line. It can show up in CAS, tax, audit, and other practice areas if firms are willing to rethink how their people contribute.

Joe connected that to a broader truth. Time has never really measured outcomes. It measures effort and attention. If AI reduces the effort required, that should be seen as a benefit. But for firms still charging for effort rather than outcomes, the shift will feel disruptive.

From backward looking to forward looking

The conversation then turned to CAS and the capabilities firms need to develop. Joe referenced the CPA.com CAS 2.0 model, which includes transactional accounting, controller services, back office process outsourcing, financial planning and analysis, and fractional CFO work. He asked Kacee where she sees the biggest upskilling opportunity.

Kacee said firms already have more tools than ever to support predictive and prescriptive work, but many are still using them in static, backward looking ways. She said the real opportunity is to become truly forward looking and to help clients make decisions rather than simply report what happened. That becomes even more important as software tools begin sending insights directly to clients before the CPA or advisor has even picked up the phone.

In that environment, firms have to offer more than reports. They need to help clients understand what the numbers mean, what decisions follow from them, and what direction the business should take next. Kacee said that is where the market is moving, and firms that do not adapt will increasingly feel pressure from both clients and competing tools.

Joe added that AI is also lowering the barrier to services that once sat much higher in the market. He pointed to tools that can now automate parts of nexus studies and other compliance work that used to require much larger firms. Kacee agreed, but she also noted that the firms seeing the strongest gains are often not trying to do everything. They are going deeper rather than broader. In her view, specialization still matters, and AI may make depth even more valuable.

The problem with hype

Later in the episode, Joe raised the question that many firms are wrestling with. How should they think about the gap between AI hype and actual reality? Kacee said the hype is one of her biggest frustrations because it can overwhelm firms and actually delay real adoption. Some firms hear exaggerated claims, see mixed results, and decide to wait.

She gave the example of the recent New York Times piece warning people not to let AI do their taxes. Kacee said most people never read far enough to understand the context. The article was talking about general purpose GPTs, not purpose built AI tools embedded in professional tax systems. That difference matters, but the nuance is often lost.

Kacee also pushed back on inflated vendor claims based on narrow benchmarks or ideal conditions. In many cases, firms are shown a high accuracy rate or major efficiency gain without any real context about sample size, workflow complexity, or implementation conditions. That makes it harder for firms to know what to expect and can create unrealistic assumptions on both sides.

Joe agreed that the answer is not to dismiss AI because some of the marketing is overblown. His advice echoed Kacee’s larger message. Firms need a plan. They need to experiment carefully, build a multiyear strategy, and separate hype from signal without losing momentum.

The AI Native Accounting Foundation

Joe asked Kacee to explain the purpose of the AI Native Accounting Foundation. Kacee described four pillars. The first is education through a podcast, newsletter, and other content. The second is awards that recognize meaningful work in areas such as training, workflow implementation, strategy, governance, and innovation. The third is scholarships. The fourth is research.

Kacee said the foundation’s first research project compares purpose built AI tools for the profession against general GPT systems across a dozen workflows in multiple practice areas. The goal is to produce clearer comparisons around real accuracy and practical use cases, which ties directly back to the problem of hype versus reality that the two had discussed earlier. Joe also added that Kacee will be presenting those awards at Scaling New Heights and recording a live episode of her podcast there as well.

The message is clear. The profession is still in an early stage of figuring out what AI really means. But the firms that respond best are not the ones chasing every new tool. They are the ones willing to slow down, think strategically, upskill their teams, and rethink how value is created.

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This article was written with the assistance of AI and edited by a human.