Tax & AccountingLegalComplianceJuly 24, 2025

The price of knowledge: why professionals must invest in their research solution

With free resources such as ChatGPT and Microsoft Copilot at your fingertips, have you thought about how much that free option could really cost you or your firm? Even low-cost paid AI solutions can come with considerable risks, both financial and reputational.


A significant concern is around accuracy, an issue highlighted by both the government and various professional bodies. In its guidelines for the use of AI in the public service, the government has noted that AI can produce “inaccurate and incomplete outputs”.

The Chartered Accountants Australia and New Zealand's (CA ANZ) view is that:

There is a risk of significant harm caused for users that believe all such outputs are well researched, reasoned, and true without such human oversight. Of particular concern, is how to educate users that tools built from generative AI do not ‘think’ about the question they are posed, but simply generate a response based on complex algorithms applied against the sequence of words in a prompt.
The New Zealand Law Society has also expressed caution on the use of AI tools, stating that:
Gen AI cannot understand its output, nor can it validate its accuracy, in the way a human author can.

Tax and legal professionals are under strict obligations to maintain their knowledge and skill levels and must provide competent services to their clients. Failure to adhere to these obligations can result in costly appearances before disciplinary tribunals, financial penalties and loss of reputation. A short-term saving in costs may lead to significant and long-term damage to your business.


Table of contents


Your professional obligations, and risks, as an accountant

Accountants and tax advisors are subject to the code of conduct issued by the professional body of which they are a member, and disciplinary action may be taken if they fail to observe such codes.

For example, accountants and tax advisors who are New Zealand resident members of CA ANZ are subject to the New Zealand Institute of Chartered Accountants (NZICA) Code of Ethics. The Code of Ethics sets out the fundamental principles that guide members in their decision making and conduct. One of the fundamental principles is “professional competence and due care”, where a member must maintain professional knowledge and skills by keeping up to date with professional, business and technology-related developments and professional and technical standards. Under another key fundamental principle, “confidentiality”, members must respect the rights of clients and employers and have all information kept secure, private, and confidential.

CA ANZ New Zealand members who provide audit, review or related services such as Agreed upon procedures must also comply with Professional and Ethical Standard 1 (PES 1) International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand), issued by the New Zealand Auditing and Assurance Standards Board of the External Reporting Board. PES 1 and NZICA Code of Ethics share the same core fundamental principles.

Accountants and tax advisors may also be sued by their clients under common law for breach of contract or negligence for incorrect advice, resulting in costly awards of damages.

Your professional obligations, and risks, as a lawyer

Lawyers have strict duties and obligations under the Lawyers and Conveyancers Act 2006 that must be adhered to. A lawyer must uphold the rule of law, facilitate the administration of justice in New Zealand, and act in accordance with all fiduciary duties and duties of care owed to clients.

In addition, lawyers must comply with the rules of conduct and client care prescribed by the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. The rules set out the minimum standard of conduct expected of every lawyer practicing in New Zealand.

A lawyer must always act competently and in a timely manner consistent with the terms of their retainer and the duty to take reasonable care when providing services to a client (Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3). This involves the provision of accurate advice (including accurate contracts and other documentation) to clients.

There are also responsibilities owed to the court. As an officer of the court, a lawyer has an absolute duty of honesty to the court and must not mislead or deceive the court (Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, rr 2.1 and 13). Information provided to the court (including legal citations) must be accurate.

A breach of the above duties and obligations may result in disciplinary action.

Lawyers may also owe duties of care to their clients in both tort and contract and may be sued for negligence or breach of contract, with the awarding of damages against them.

How relying on free and low-cost AI technology puts you at risk

The role of tax and legal professionals is to help their clients navigate the complexities of regulatory compliance and legal obligations, whilst ensuring the best outcome based on their clients’ unique circumstances. At the heart of this role are two core functions: advising the client by recommending a course of action, outlining the potential risks and benefits; and ensuring compliance obligations are met by completing forms or tax returns on the client’s behalf.

To perform this role to the standards required by the governing legislation you must act competently and with reasonable care. This is why it is crucial that the research materials you use as the basis of your advice or compliance activities are comprehensive, accurate and up to date so that you can trust the results. Relying on free or low cost solutions puts you at risk of providing the wrong advice or completing compliance tasks with inaccurate information; alternatively, you or your staff have to spend additional time validating the answers from other sources to minimise the risk of providing inaccurate advice to your clients.

Out of date datasets


Some free or low-cost AI tools are trained on static data sets that are from a particular point in time and not updated. This limitation is often not transparent to the user. As a result, the answers they provide can be out of date and inaccurate as they are generated from a content set that does not have the most recent sources of information. This can include missing substantial legislative update or a crucial rate or threshold change.

Wrong jurisdiction


Free or low-cost AI tools do their best to find an answer, any answer. That can include composing an answer based on information from another jurisdiction. On the surface, these answers appear accurate but do not reflect the correct law for your client’s situation.

Hallucinations


Generative AI is prone to hallucination, producing an answer that reads as authoritative but which is actually false. This extends to creating fictitious court cases that support a client’s position – cases that do not in fact exist. In a recent employment law case, the plaintiff referred to a fictitious case as a result of using generative AI (LMN v STC [2025] NZEmpC 46). Judge King pointed out the importance of checking information produced by generative AI before relying upon it in court proceedings.

Privacy and security


There are also significant privacy and security concerns when using free or low-cost AI technology. Tax agents and legal professionals must generally seek client permission before disclosing any of their information to third parties, including AI tools. Despite training and guidelines, there is always a risk that sensitive or confidential data relating to your clients or firm may be uploaded into the AI tool.

Not all AI tools have the same level of privacy and security and some may:

  • be vulnerable to unauthorised access or hacking if they do not store or transmit data securely
  • acquire personal or usage data without clear consent and without being transparent about who has access and how it is used or
  • share data with third parties without explicit consent.

Once lost, such data can never be retrieved and, if client information is involved, the loss of trust may also never be retrieved.

When accuracy matters, trust isn’t optional

Adopting AI technology for your professional practice is a business investment decision that must be implemented with due consideration for the risks and benefits. Short term cost savings might improve the immediate bottom line but could have long-lasting negative impacts on your business and reputation, and expose you to financial penalties.

Wolters Kluwer has a global division of expert engineers and developers dedicated to creating the best AI solution in the market for tax and legal professionals, complying with world standard protocols around privacy and security. Your data, and your clients’ information, is safe with us. Extensive work has been done to reduce the risk of hallucination in AI generated answers, reinforcing the trust factor.

Already in use in North America, our AI solution will soon be deployed across our award-winning CCH iKnowConnect research platform in Asia Pacific. This AI tool will generate results you can rely on as they are sourced from the extensive content set curated and updated by the subject matter experts at Wolters Kluwer. AI generated answers contain links back to our content set so that you can validate the result, apply the law to your clients’ circumstances and be confident in the advice you are giving. Our content set is updated daily by our experts, capturing the latest changes to ensure that you and your clients are always up to date. This is Authoritative AI, built on decades of editorial integrity and expertise, not just algorithms.

Read more about our Authoritative AI.

Back To Top