Cannot Be Delegated to Software: The Texas Accountancy Board on AI and the CPA, August 2026

The Texas State Board of Public Accountancy publishes its Texas State Board Report "four times a year for licensees." The issue of August 2026 carries an article on its front page called "AI and the Texas CPA: Professional Obligations in a Changing Environment."

"While the Texas Public Accountancy Act and the Texas State Board of Public Accountancy Rules of Professional Conduct do not specifically address generative AI, existing professional obligations apply regardless of the technology used." Parts of it follow, not the whole.

The Tool and the Licensee

Generative AI can assist in professional services, the board says, but "it cannot replace the judgment and expertise of a licensed CPA." AI systems "generate content based on patterns in data rather than professional reasoning." As a result, it says, they may produce inaccurate statements, outdated information, fabricated citations, or conclusions that appear reasonable but are unsupported.

"A Texas CPA remains responsible for all work product provided to clients, regulators, lenders, investors, or other third parties." Whether AI drafts a tax memorandum, summarizes accounting guidance, prepares engagement documentation or writes to a client, the board says, "the CPA must review and evaluate the output before relying upon it." "Professional responsibility cannot be delegated to software."

Competence, Care and the Client's Data

On competence and due professional care, the board points to its Board Rule 501.74. CPAs who use AI should understand both what it can do and where it falls short, including that its responses "may contain errors, incomplete analyses, or unsupported conclusions." Before using AI-generated information in professional work, practitioners "should verify facts, validate authoritative references, and determine whether the output is appropriate for the specific engagement." "The efficiency gained through AI should never come at the expense of professional diligence," the board says.

It calls the handling of confidential client information "Perhaps the most significant risk associated with generative AI," and points to Board Rule 501.75. Many publicly available AI systems, it says, process information through third-party providers and may retain what users enter. Before entering client information into any AI platform, it says, a CPA should understand how the provider stores, uses and protects the data. "Texas CPAs have a statutory obligation to safeguard confidential client information. Those obligations do not disappear when information is entered into an AI system."

Firms, the board says, should evaluate whether a platform has appropriate security controls and contractual protections before letting personnel use it with client-related information. "As a best practice, firms should establish clear policies governing the use of AI and confidential data."

Attest Work and the Record

The use of AI in attest engagements, the board says, "presents additional considerations." AI may help practitioners identify trends, organize information or prepare preliminary documentation, the board says, but "AI-generated analyses do not constitute audit evidence, nor do they replace the procedures required by professional standards." Auditors "remain responsible for obtaining sufficient appropriate evidence, evaluating risks, exercising professional skepticism, and reaching independent conclusions."

"When AI plays a significant role in the preparation of professional work, practitioners should consider documenting how the technology was used, what procedures were performed to validate the results, and how final conclusions were reached." Such documentation, it says, may prove valuable during peer review, quality management inspections, litigation or regulatory inquiries. "The objective is not to document every interaction with an AI tool, but rather to demonstrate that professional judgment was exercised and that appropriate review procedures were performed."

The board's word is "consider," and its line is "a significant role." Who decides what counts as significant, and would that decision be on the file too?

Policies, and the Guiding Principle

Many firms, the board says, are adopting formal policies on AI to address emerging risks. Effective policies, it says, often include approved applications and vendors, restrictions on the use of confidential information, review and approval procedures, documentation expectations, employee training, cybersecurity and data protection standards, and procedures for monitoring evolving regulatory guidance.

For Texas CPAs, the board says, "the guiding principle remains unchanged: technology may assist in performing professional services, but it does not replace professional responsibility."