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AI governance 6 min read

Shadow AI in accounting firms

A survey in April finds eleven AI tools; by June the list is wrong. Where shadow AI in a firm comes from, and how to keep track of it without monitoring individuals.

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Quick answer

Shadow AI in a firm is the AI use staff have taken up on their own: a free ChatGPT account for a client email, Perplexity for a tax question, a transcription tool for client meetings, a PDF summariser for contracts in audit files. It happens because it makes the work faster, and what it adds up to is not a list of breaches but a list of tools nobody has decided on yet. A quarterly survey is out of date after two months: tools appear faster than a survey finds them, and AI in existing software never goes through a purchasing decision. What works is continuously observing which domains are opened in the browser, with no user ID, and recording a decision for each tool.

01

Alongside the approved tools, every firm has a free chatbot, an AI search engine, transcription tools and PDF summarisers in use

02

In a firm the pasted text is rarely neutral: a general ledger, a payslip with a citizen service number, a draft opinion

03

A survey of eleven tools describes April, not June

04

Auditors work on site at clients, outside the firm's network, so proxy logs only see part of the picture

05

The service's domain is enough for the decision; who opened it adds nothing

In April, the IT manager of a firm with a hundred and twenty staff sends a survey to all service line leads: which AI tools do your teams use? Eleven names come back in a spreadsheet, each with an owner. In June a partner asks whether the firm can take over the contract analysis tool his team has been using for a few weeks, because two of them are paying for it themselves. The tool is not on the list of eleven.

That is how it goes in almost every firm. The list was right in April; the work has moved on since, and so have the tools. That is shadow AI: self-service, without a decision from the firm and genuinely in use. It is not a list of breaches but a list of decisions still to be made.

What runs alongside the approved tools?

A handful of tools turn up almost everywhere, for the same reason: for the job in hand, the approved tool is not the obvious choice.

What gets openedWhy people choose itWhat the firm needs to know about it
ChatGPT on a free accountRewriting a client email, tightening a note to the accountsWhether input is used for training, and whether a client name was in it
Perplexity or another AI search engineA tax question with sources, finding a statuteFree or business account, and what the query contained
Transcription of meetingsMinutes of the meeting on the annual accounts without having to type themWhere the recording is processed, and what the client said in the meeting
PDF summarisersLeases, loan agreements and minutes in an audit fileThe whole document goes in, including pages the question did not need
AI features in professional softwareThe bookkeeping or accounts preparation software gained an assistant with an updateNo new domain, no new purchasing decision, but a new processing operation

The last row is the hardest, and in a firm the biggest: nothing new was installed, nobody requested anything, and yet text from a general ledger now goes to a model it did not go to last year. Browser extensions belong on the list too: an extension with read permissions is an AI tool as well.

Why does this matter more in a firm?

Because the text being pasted is rarely neutral. A general ledger belongs to a client. A payslip carries a name, a citizen service number and a bank account number. A draft opinion is information the client does not have yet, and for a listed client it can be inside information. In a firm, the ordinary material of a working day is client information covered by a duty of confidentiality, and some of it is personal data as well.

A free account is not the same as an environment the firm has set up. On a personal account, input can be used to improve the model unless the user switches that off, and there is no data processing agreement. The difference is set out in our comparison of free and business AI accounts. The Dutch Data Protection Authority reported breach notifications where employees had put personal data into an AI chatbot, and advises organisations to set clear rules on whether this is allowed and with which data.

Confidentiality is one of the principles in the Dutch professional code for accountants. The AFM, the Dutch financial markets regulator, supervises licensed audit firms, and the NBA, the Dutch professional body for accountants, oversees the profession. None of those frameworks prescribes how a firm handles AI; all three assume the firm knows what happens to client information. An AI service nobody has decided on falls outside that knowledge. How this fits together for a firm as a whole is on the page about AI governance for accounting firms.

Why is a survey out of date after two months?

Back to the list of eleven. In April it contained Copilot, ChatGPT on a business account, Claude, Perplexity, the bookkeeping software, the invoice scanning software, the accounts preparation software, a translation tool, a transcription tool, a data analytics tool in the audit practice and a tool that summarises competitors' annual accounts for the advisory practice. A good list. Every tool had an owner.

By June it is wrong on four counts. The advisory team has switched to a different transcription tool, because it worked better with Teams. An update added an AI notes feature to the accounts preparation software, and nobody reported it. Two audit staff are using a contract analysis tool a colleague recommended, at their own expense. And nobody has opened the translation tool since May. Nobody did anything wrong. The survey described April.

Surveying more often does not solve this. Every survey is a snapshot, and our article on why tool catalogues date describes the mechanisms: tools appear daily, AI turns up in software you already have and tools change hands. Which methods detect use, and what each one misses, is covered in our article on how to discover which AI tools employees really use. One thing matters more in a firm than elsewhere: auditors spend weeks on site at the client, on the client's network. The firm's proxy logs see the firm, not the laptop in the client's meeting room.

How do you keep track without monitoring staff?

By recording only what the decision needs: which AI services are opened in the firm, how often and whether there is a decision on them. For that, the service's domain is enough. Who opened it, which page and what was on it do not change the decision; they do turn the measurement from a count of services into a record of people. That distinction, and what it means under the GDPR and for the works council, is covered in our article on AI monitoring versus employee monitoring.

That is why the BeeSensible extension records only the registrable domain, at most once a day per device, with no user ID, no path and no page content. Because it runs in the browser, the extension goes with the laptop to the client's office. The observed domains are matched against a catalogue of over 1,000 AI tools, with the vendor, country, training policy and a risk score for each. In the Inbox, an admin sees which tools have no decision yet and records that decision; BeeSensible never makes that choice itself.

AI register
AllowedUnder reviewNot allowedAll tools
Search by tool, vendor, domain or former name…
1,012 tools
DeepSeek
Critical · 90/100
Not allowed
Otter.aiNew
High · 68/100
No decision yet
Grok
High · 67/100
Not allowed
ChatGPT
High · 62/100
Allowed
Perplexity
Medium · 55/100
No decision yet
HeyGen
Medium · 53/100
No decision yet

Every tool, scored for risk

Over 1,000 AI tools, each scored from Low to Critical. Nothing is approved or blocked until someone decides.

More about AI Governance

What BeeSensible does and does not show here is set out on the product page for See. A phone without the extension stays out of sight, and the AI notes feature in the accounts preparation software has no domain of its own; that is reassessed when there is an update or new terms, not on a fixed date.

What do you do with the list?

Start with the tools opened most often that have no decision yet. For the contract analysis tool, that means checking whether there is a business tier, where the documents are processed, whether a data processing agreement is available and whether contract analysis is something the firm wants to encourage. The answer is often yes, on one condition: only documents the client has been told will be processed this way. That is "Limited use", with the condition in a single sentence.

For the free ChatGPT account the answer is usually: not allowed, with Copilot or the business tier named as the alternative. That decision only works if it reaches staff when they open the tool, not if it sits in a policy document. Our article on which AI tools employees may use shows what such a list of statuses looks like; the fields a firm records for each tool are set out in our article on an AI register for accounting firms; the rest of the subject is under AI governance.

Nobody reproaches the partner from the first paragraph, or his team. The firm sees their tool, decides on it and lets them know the decision the moment someone opens the tab. In July the IT manager does not send out a new survey. He looks at which tools were opened this month and still have no decision.

FAQ

Common questions

Which AI tools do staff in an accounting firm use without the firm knowing?

The same ones keep coming up: a free ChatGPT account for client emails and notes, Perplexity for tax questions with sources, transcription tools for client meetings, PDF summarisers for contracts and minutes in audit files, browser extensions that rewrite emails and AI features that arrived in the bookkeeping or accounts preparation software with an update. Exactly which ones, you only find out by observing; it varies by firm and by month.

Is shadow AI in a firm a data breach?

Not in itself. The fact that an AI service was opened without a decision only tells you that nobody has looked at it yet. Whether there is a breach depends on what was put in: the text of a statute in a free account is different from a payslip with a citizen service number. The Dutch Data Protection Authority has received breach notifications where employees put personal data into a chatbot, so the second situation does occur.

Why is a quarterly survey not enough?

Because a survey is a snapshot and the picture keeps moving. Between two surveys new tools appear, existing professional software gains an AI feature without a new purchasing decision and people do not report what they do not recognise as AI. The April list was not wrong; it simply describes April.

Can a firm keep track of which AI tools staff open?

To work out which tools need a decision, the service's domain is enough: that an AI tool was opened in the firm, which one and how often. Who opened it adds nothing. A measurement with no user ID, no path and no content stays a count of services; it does not become a record of people. Write that down and discuss it with the compliance officer and, where there is one, the works council.

What do you do with a tool that has no decision yet?

Assess it, starting with the tools opened most often. Look at the vendor, the country, whether it trains on input, whether a data processing agreement is available and whether a business tier exists. Then choose: allowed, limited use with a condition or not allowed with a named alternative. "No decision yet" is an honest interim status, not a final one.

Portrait of Rens Timmermans from BeeSensible

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