The trends that will shape accounting practices in 2026

What are the trends and issues that are going to shape the accounting sector in 2026? What legislation should be on your radar?

There are four major trends that I’m encouraging clients to consider as we head into 2026.

1. Finding the sweet spot for artificial intelligence (AI) integration that balances risk and reward

Over the past few years, the power combo of generative AI (GenAI) and workflow automation tools has been thoroughly embraced in some shape or form throughout the accounting world.

The rush to adopt AI has delivered impressive productivity gains for some, but for others, the journey has been bumpy, with integration headaches and digital skill gaps slowing progress.

The real challenge for 2026 isn’t whether to use AI, but how to strike the right balance between harnessing its rewards and managing its risks. At RSM, for example, partners and directors have collectively recovered thousands of hours annually, freeing up our time to focus on higher-value advisory work.

At the same time, misinformation, bias and data privacy concerns have become pressing concerns. Earlier this year, Australia introduced the Voluntary AI Safety Standard, consisting of 10 voluntary “guardrails” around developing and using AI.

Although these specific guardrails are voluntary, you may have a hard time winning government contracts without being able to demonstrate your compliance.

2. Anti-money laundering and combating the financing of terrorism (AML/CTF) compliance

Big changes are on their way for Australia’s professional services firms thanks to the AML/CTF Amendment Bill 2024.

Under the Tranche 2 reforms, accountants are now officially part of the ‘gatekeeper sector’ for Australia’s economic security.

What does this mean? Well, from 1 July 2026, any accountants involved with setting up companies or trusts, managing client funds, acting as a nominee director, or assisting clients with property deals, will need to enrol with AUSTRAC and implement a formal AML/CTF program. You will also need to conduct client due diligence and will be obligated to report any suspicious matters.

Most rule changes for existing and newly regulated reporting entities commence on 1 July 2026, and if your business provides virtual asset services, the new laws commence from 31 March 2026.

Your formal AML/CTF program should include:

• Risk assessment - Evaluate money laundering and terrorism financing (ML/TF) risks for your firm and clients.
• Policies and procedures - Document how you’ll mitigate those risks.
• Compliance officer - Appoint a qualified AML/CTF officer.
• Training - Ensure all staff understand their obligations.
• Independent review - Regular external evaluation of your program

This is an increased liability exposure, and the implementation window is tight. If you haven’t started making moves yet, now’s the time to get cracking.

3. Income splitting under practical compliance guideline (PCG) 2021/4

PCG 2021/4 by the Australian Tax Office (ATO) is quietly reshaping the landscape for professional services firms. If you’re a partner, director, or owner in a professional services firm, you should consider how it will impact you.

While it was released in 2021, 2025 is the first year it applies to professional firms. Because of this slow start, it has gone under the radar for many.

The ATO uses PCG 2021/4 to understand a professional firm’s compliance risk. If PCG 2021/4 applies, it provides professionals with guidelines on what the commissioner will deem as green, amber or red. This determines the level of resources applied for any potential review, with the green zone being the safest.

Should this PCG apply but not be adhered to, in addition to potential additional taxes and penalties, the Commissioner has also stated that, depending on the severity of the non-compliance, all partners of the firm could be placed under review. It is important that professional partnerships understand the application of the guide and the tests applied to ensure there is no inadvertent non-compliance.

This may lead to simpler business structures for many, with some partners electing not to use a trust, instead taking profit distributions directly to their own personal name. With the inflexibility around how you can distribute profits, this indirectly affects other business structures you might have, and you will need to consider whether investments are viable.

4. Australian public country-by-country (CbC) reporting rules

Multinational groups with operations in Australia will need to adapt to the new public CbC reporting regime.

Key impacts include:

• Increased transparency - The public disclosure requirement means that sensitive financial and tax information will be available to the public, including competitors and tax authorities in other jurisdictions. This could lead to increased scrutiny and reputational risks, so groups should ensure they have performed a Public CbC Market Sensitivity Analysis.

• Compliance costs - Preparing the Public CbC report will likely involve additional compliance costs. Groups will need to ensure that their reporting systems can capture and report the required data accurately and in a timely manner.

• Penalties for non-compliance - It is important to ensure you have properly considered the applicable start date and reporting deadline, given the large penalties applicable for late filings in Australia. These penalties can reach AUD$825,000 for filings that are over six months late.

• Global coordination - Groups will need to ensure consistency in their global tax reporting to avoid unknown discrepancies arising from the confidential CbC reporting, Pillar 2 reporting and the new CbC reporting.