Risk factor changes · ACN

What changed in Accenture's risk factors

Item 1A (Risk Factors) of Accenture's FY2026 10-K compared with its FY2025 10-K, sentence by sentence.

Newer: 10-K filed 2026-10-16 · Older: 10-K filed 2025-10-10

New in the latest 10-K 42

• Because the effects of these conditions on client demand may take time to emerge, they can be difficult to anticipate and respond to.
• Our success depends, in part, on our ability to continue to develop and implement solutions and services that anticipate and respond to rapid and continuing changes in technology and offerings to serve the evolving needs of our clients, including in areas involving advanced AI, which includes generative, agentic and physical AI and digital-, cloud- and security-related offerings, which are continually evolving, as well as developments in areas such as quantum and edge computing, infrastructure and network engineering, intelligent connected products, digital engineering and manufacturing, and robotics solutions.
• Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud, AI Table of Contents ACCENTURE 2026 FORM 10-K Item 1A.
• For example, limited client technology budgets may be increasingly allocated to AI investments which may reduce client spending on, or demand for, certain of our solutions and services.
• Many of our AI solutions and services rely on third-party AI models, platforms and infrastructure providers over which we have limited control, and changes in the availability, performance, security, pricing, licensing terms or regulatory treatment of these technologies, including restrictions that vary across jurisdictions, could adversely affect our ability to develop, deploy and deliver AI solutions and services.
• Leveraging AI capabilities, including autonomous or semi-autonomous agents, in the delivery of our services and for our internal functions and operations presents additional risks, costs and challenges, and the anticipated productivity gains, efficiencies and other benefits from our AI initiatives may not be realized, may take longer than expected to achieve or may require greater investment, oversight and human intervention than anticipated, which may materially impact our financial results.
• Moreover, the use of AI may give rise to risks related to harmful content, accuracy, bias, IP infringement or misappropriation, defamation, Table of Contents ACCENTURE 2026 FORM 10-K Item 1A.
• Such services could increase our exposure to claims, investigations or litigation related to AI systems developed, deployed or used by us, our ecosystem partners or our clients, regardless of the merits of any such claims.
• For example, we provide AI safety and related advisory services, which may involve evaluating, testing or providing recommendations regarding AI systems.
• Such services could increase scrutiny from regulators, clients, investors or the public and may result in reputational harm as well as litigation claims related to the provision of these services.
• These regulations may impose significant and differing requirements depending on our role in developing, providing, deploying, implementing or using AI systems, for ourselves and our clients, including requirements regarding the governance, design, development, testing, transparency, oversight and use of AI, and may limit our ability to incorporate certain AI capabilities into our offerings.
• The rapid adoption of AI across our business requires continued large-scale reskilling and upskilling; if we cannot reskill and upskill our people at the pace and scale required, we may be unable to meet client demand, realize anticipated productivity benefits, maintain competitiveness or align our workforce with evolving business needs, which could adversely affect our results of operations.
• The timing and cost of these actions and the benefits are uncertain and may differ from our expectations.
• Additionally, legislative, regulatory or executive actions have and may in the future increase the cost of obtaining or maintaining H-1B or similar visas in the U.S. or require us to pay higher wages to visa holders, increase our delivery costs and affect our ability to efficiently deploy talent globally.
• The rapid development and increasing use of AI technologies, including autonomous or semi-autonomous agents, within our and our clients businesses have created new attack surfaces, security vulnerabilities, more sophisticated methods of attack, data privacy and other risks.
• Cybersecurity threats are constantly expanding and evolving and becoming increasingly sophisticated and complex involving social engineering and AI.
• For example, increasingly powerful and available AI models are finding zero-day vulnerabilities and creating exploits which may significantly diminish the time frame for us and our clients and service providers to respond and protect our networks and systems.
• Risk Factors 17 target pricing and overall economics.
• Moreover, many of our contracts tie our compensation to agreed-upon performance standards, milestones or outcome-based measures such as cost savings, revenue enhancement or business goals.
• If we fail to satisfy these measures, or if we experience delivery difficulties, our contracts could yield lower profit margins than planned or be unprofitable.
• A number of countries where we do business, including the United States Table of Contents ACCENTURE 2026 FORM 10-K Item 1A.
• Pillar Two applied to us beginning with fiscal year 2025.
• Sovereignty initiatives, procurement preferences, local ownership or control requirements and other similar measures, together with changes in geopolitical relationships, trade restrictions or extraterritorial laws, may reduce our ability to standardize and scale solutions across markets or favor local providers or technologies.
• Complying with these requirements may increase our costs, delay or limit the solutions and services we can provide, fragment our technology and delivery architecture, reduce operational efficiency, impair our ability to serve clients consistently across jurisdictions, or result in the loss of existing or prospective business.
• If we are unable to anticipate, adapt to or comply with these developments at the pace and scale required, our competitive position, client relationships and results of operations could be adversely affected.
• As our operating model evolves, including through a network of businesses with varying degrees of operational autonomy, it may become more difficult to maintain consistent standards, manage risks and protect our brand and reputation.
• The effort required to effectively balance business autonomy with enterprise oversight may divert management attention and resources.
• If we do not successfully implement the changes or operate effectively under any new operating model, our business and results of operations may be negatively impacted.
• Integration activities can disrupt ongoing business, divert management attention and require significant additional resources.
• As we continue to expand into new and high-growth areas, the financial profile varies across our acquisitions.
• We have paid and in the future may pay higher valuations for acquisitions, particularly for solutions and platforms and assets in areas with significant growth potential and higher demand, which may require longer periods to generate expected returns.
• We also periodically evaluate, and have engaged in, the disposition of assets and businesses, which has and may in the future include the sale of all or portions of our business in particular countries or jurisdictions.
• Our business is subject to the risk of litigation involving current and former employees, Table of Contents ACCENTURE 2026 FORM 10-K Item 1A.
• Government investigations or proceedings related to our diversity, equity and inclusion programs have and may in the future result in financial penalties, sanctions, or restrictions on government contracting, which may adversely affect our results of operations.
• Risk Factors 23 U.S. companies that reincorporate or have reincorporated outside the United States.
• Standards for tracking and reporting on sustainability matters have not been harmonized and continue to evolve and may change over time, which could result in significant revisions to our current ambitions, reported progress in achieving such ambitions, or ability to achieve such ambitions in the future.
• We rely on confidentiality policies and procedures, nondisclosure and other contractual Table of Contents ACCENTURE 2026 FORM 10-K Item 1A.
• Risk Factors 24 arrangements, and patent, trade secret, copyright and trademark laws to protect our IP rights.
• Laws in the countries where we operate may provide limited IP protection or may change in ways that limit our ability to obtain or maintain protection.
• The steps we take may not prevent or detect infringement or enable timely enforcement.

Reworded 96

Removed words are struck through; added words are highlighted.

• Changing demand patterns from increased economic and political volatility and uncertainty, including as a result of increasing geopolitical Geopolitical tensions, inflation, economic downturns, changes in global trade policies, including the threat or imposition of tariffs or other trade restrictions and related retaliatory actions, protectionism, nationalism, global health emergencies and their impact on active or escalating conflicts or tensions in certain regions, including the ongoing conflict in the Middle East, have in the past adversely affected, and could continue to adversely affect us, our clients and the industries we serve, have in the past had a negative impact and which could in the future have a significant negative negatively impact on our results of operations.
• As we continue to expand our solutions and services into these new areas, we are exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may negatively affect our reputation and demand for our solutions and services.
• Table of Contents ACCENTURE 2025 2026 FORM 10-K Item 1A.
• Risk Factors 12 Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud, AI and data solutions, could affect the nature of how we generate revenue.
• This has caused, and may in the future cause, clients to reduce or delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
• Developments in the industries we serve, which may be rapid, also could have in the past and may in the future shift demand to new solutions and services.
• In a particular certain geographic market, markets, service or industry group, groups, a small number of clients have contributed, or may, in the future contribute, represent a significant portion of the revenues of such geographic market, service or industry group, revenues, and any decision by such a client to delay, reduce, reduce or eliminate delay spending on our solutions and services have had and could in the future have a disproportionate impact on the our results of operations in the relevant geographic market, service or industry group. that area.
• We are increasingly applying AI-based technologies to our solutions and services, to how we deliver work to our clients, with our ecosystem partners and to our own internal operations.
• AI technologies are complex and rapidly evolving, and we face significant competition, including from our clients and ecosystem partners, who have and may continue to develop their own internal AI-related capabilities, as well as new AI-native companies, which can lead to reduced demand for our solutions or services.
• As these technologies evolve, some services and tasks currently performed by our or our clients' people have been and will continue to be replaced by automation, including AI-enabled solutions, which will has led and may continue to lead to reduced demand for our services and/or adversely affect the utilization rate of our professionals, if demand for those services is not replaced by demand for new solutions and services or if the pace and level of spending on new solutions or services are not sufficient to make up any shortfall.
• The development, adoption and use of AI technologies is are still in the early stages and involve significant risks and uncertainties, which may expose us to legal, reputational and financial harm.
• Moreover, the use of AI may give rise to risks related Risk Factors 13 inappropriate access to harmful content, accuracy, bias, intellectual property infringement or misappropriation, defamation, use of data, data privacy, cybersecurity and health and safety, among others, and also bring the possibility of new or enhanced governmental or regulatory scrutiny, litigation or other legal liability, or ethical concerns that could adversely affect our business, reputation or financial results.
• Table of Contents ACCENTURE 2025 2026 FORM 10-K Item 1A.
• Risk Factors 13 Evolving rules, regulations and industry standards governing AI may require us to incur significant costs to modify, maintain, or align our business practices, solutions and services to comply with U.S. and non-U.S. rules and regulations, the nature of which cannot be determined at this time and may be inconsistent from jurisdiction to jurisdiction.
• Several jurisdictions where we operate are considering or considering, have proposed or enacted legislation and policies regulating AI and non-personal data, such as the European Union s AI Act. Act, as well as other AI, digital, cybersecurity, data governance and product liability requirements.
• Any failure to address concerns relating to the responsible use of AI technology in our solutions and services may cause harm to our reputation or result in financial liability and, as such, may increase our costs to address or mitigate such risks and issues.
• There is competition for scarce talent with market-leading skills and capabilities in new technologies, and our people have been directly and will continue to be targeted because of their highly sought-after skills and this will likely continue. skills.
• There is a risk that at certain points in time, as a result of technological Technological developments or changes in demand, we demand may have result in us having more people than we need in certain skill sets or geographies or at compensation levels that are not aligned with skill sets. skills.
• In these situations, we have engaged, and may in the future engage, in actions to rebalance our workforce, including reducing the rate of new hires and increasing involuntary terminations as a means to keep our supply of people and skills in balance with client demand, such as the three-pronged talent strategy initiated in the fourth quarter of fiscal 2025. terminations.
• At certain times and in certain geographical regions, we will may find it difficult to hire and retain a sufficient number of employees with the skills or backgrounds to meet current and/or future demand.
• If our utilization rate is too high or too low, it could have an adverse effect on employee engagement and attrition, attrition and the quality of the work performed performed, as well as our ability to staff projects.
• Risk Factors 14 We are particularly dependent on identifying, retaining and developing top talent and members of Accenture Leadership leadership with critical capabilities.
• In addition, if we do not obtain the U.S. government Table of Contents ACCENTURE 2025 2026 FORM 10-K Item 1A.
• Risk Factors 14 In addition, if we do not obtain the shareholder approval needed to continue granting equity awards under our share plans in the amounts we believe are necessary, our ability to attract and retain people could be negatively affected.
• As the breadth and complexity of this infrastructure continues to grow, including as a result of the increasing reliance on, and use of, mobile technologies, social media and cloud-based services, emerging technologies (such as more of our employees continue to work remotely, advanced AI), and as cyberattacks become increasingly sophisticated (e.g. (e.g., organized crime and/or state-sponsored organizations, deepfakes and AI generated social engineering), the risk of security incidents and cyberattacks has increased.
• Threat actors are already leveraging AI technologies to develop new hacking tools and attack vectors, exploit vulnerabilities, obscure their activities, and increase the difficulty of threat attribution.
• Such In the past, we have experienced, and in the future, we may again experience, data security incidents which have led to and could in the future lead to shutdowns or disruptions of or damage to our systems and those of our clients, ecosystem partners and vendors, and unauthorized disclosure of sensitive or confidential information, including personal data and proprietary business information.
• In providing solutions and services to clients, we often manage, utilize and store sensitive or confidential client, Accenture or other third-party data, including customer customer, vendor, ecosystem partner and other personal data and proprietary information, and we expect these activities to increase.
• Unauthorized disclosure or use of, denial of access to, or other incidents involving sensitive or confidential client, vendor, ecosystem partner or Accenture data, whether through systems failure, employee negligence, fraud, misappropriation, or cybersecurity, ransomware or malware attacks, cyberattacks by nation state actors, criminal groups, or bots or other intentional or unintentional acts, could damage our reputation and our competitive positioning in the marketplace, disrupt our or our clients business, cause us to lose clients and result in significant financial exposure exposure, remediation costs and legal liability.
• Similarly, unauthorized access to unauthorized, or through, denial of of, access to, downtime or other incidents involving, our software and IT supply chain or software-as-a-service providers, our or our service providers information systems or those we develop for our clients, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/or state-sponsored organizations, who continuously develop and deploy social engineering methods, phishing frameworks and viruses, ransomware, malware or other malicious software programs, has and could in the future result in similar negative publicity, significant remediation costs, legal liability, damage to our reputation and government sanctions and could have a material adverse effect on our results of operations consequences see risk factor below entitled Our business could be materially adversely affected if we incur legal liability.
• These All these developments are increasing the difficulty of detecting and defending against cybersecurity attacks and maintaining effective security measures and protocols.
• We are subject to numerous laws and regulations designed to protect this personal data and proprietary information, including privacy and privacy, cybersecurity and product security laws such as the European Union s General Data Protection Regulation ( GDPR ), Digital Operational Resilience Act and Network and Information Security 2 Directive, Directive and Cyber Resilience Act, the United Kingdom s GDPR, U.S. states recent comprehensive privacy legislation, as well as various other U.S. federal and state laws governing the protection of privacy, health or other personally identifiable information and data privacy and cybersecurity laws in other regions, and related contractual obligations.
• These monetary Monetary damages might not be subject to a contractual limit of liability or an exclusion of consequential or indirect damages and could be significant.
• Table of Contents ACCENTURE 2025 2026 FORM 10-K Item 1A.
• Risk Factors 15 off-shore large multinational IT service providers, including the services arms of large global technology providers; offshore IT service providers in lower-cost locations, particularly in India; accounting firms and consultancies that provide consulting, managed services and other IT solutions and services; solution or service providers that compete with us in a specific geographic market, industry or service area, including advertising agency holding companies, engineering services providers and technology start-ups start-ups, AI-native companies and other software companies that can scale rapidly to focus on or disrupt certain markets and provide new or alternative products, end-to-end solutions, services, or commercial or delivery models; and in-house IT departments of large corporations that use their own resources, rather than engage an outside firm, such as the growing number of companies that are setting up global capability centers ( GCC s ). GCCs.
• The technology companies described above, including many of our ecosystem partners and new AI-native companies, are increasingly able to offer services related to their AI, software, platform, cloud migration and other solutions, or are developing AI, software, platform, cloud migration and other solutions that may require integration services to a lesser extent or replace them in their entirety.
• They may also form closer or preferred arrangements with our competitors. competitors and joint clients.
• In addition, our ecosystem partners have in the past and may in the future also experience reduced demand for their technology or software, including, for example, in response to changes in technology, which could lessen related demand for our solutions and services.
• Table of Contents ACCENTURE 2025 2026 FORM 10-K Item 1A.
• We believe the Accenture brand name and our reputation are important corporate assets that help distinguish our solutions and services from those of competitors and also contribute to our efforts to recruit and retain talented employees.

Removed since the previous 10-K 67

• Economic and geopolitical volatility and uncertainty is particularly challenging because it may take some time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations.
• Our success depends, in part, on our ability to continue to develop and implement solutions and services that anticipate and respond to rapid and continuing changes in technology and offerings to serve the evolving needs of our clients.
• Examples of areas of significant change include advanced AI, which includes generative, agentic and physical AI, digital-, cloud- and security-related offerings, which are continually evolving, as well as developments in areas such as software, augmented and virtual reality, automation, blockchain, Internet of Things, quantum and edge computing, infrastructure and network engineering, intelligent connected products, digital engineering and manufacturing, and robotics solutions.
• Such technological developments and spending delays can negatively impact our results of operations if we are unable to introduce new pricing or commercial models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any shortfall.
• Leveraging AI capabilities for our internal functions and operations presents additional risks, costs and challenges, including those discussed in these risk factors.
• These regulations may impose significant requirements on how we design, build and deploy AI and handle non-personal data for ourselves and our clients or limit our ability to incorporate certain AI capabilities into our offerings.
• The timing and amount of costs related to these business optimization actions and the nature and extent of benefits realized from such actions are subject to uncertainties and other factors, including local country consultation processes and regulations, and may differ from our current expectations and estimates.
• Although only a very small percentage of our people in the U.S. are on H-1B visas, changes in immigration laws or policies, or the application of those laws and policies, could limit the availability of H-1B or other visas in the U.S.
• We depend on identifying, developing and retaining top talent to innovate and lead our businesses.
• This includes developing talent and leadership capabilities in markets where the depth of skilled employees may be limited.
• Our ability to expand in our key markets depends, in large part, on our ability to attract, develop, retain and integrate both leaders for the local business and people with critical capabilities.
• In the past, we have experienced, and in the future, we may again experience, data security incidents resulting from unauthorized access to our and our service providers systems and unauthorized acquisition of our data and our clients data including: inadvertent disclosure, misconfiguration of systems, phishing ransomware or malware attacks.
• Cybersecurity threats are constantly expanding and evolving, becoming increasingly sophisticated and complex, including as a result of evolving AI technologies and threat actors increasingly mature infrastructure and systems capable of broadly deploying zero-day attacks.
• For example, failure to comply with the GDPR may lead to regulatory enforcement actions, which can result in monetary penalties of up to 4% of worldwide revenue, orders to discontinue certain data processing operations, civil lawsuits, or reputational damage.
• If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client, third-party or Accenture data, or otherwise mismanages or misappropriates that data, we could be subject to significant litigation, monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions.
• Our competitors include: large multinational IT service providers, including the services arms of large global technology providers;
• Risk Factors 17 convey the value of our solutions and services, the more risk we have in winning new work in sufficient volumes and at our target pricing and overall economics.
• Moreover, many of our contracts include clauses that tie our ultimate compensation to the achievement of agreed-upon performance standards or milestones.
• If we fail to satisfy these measures, it could significantly reduce or eliminate our fees under the contracts, increase the cost to us of meeting performance standards or milestones, delay expected payments or subject us to potential damage claims under the contract terms, any of which could significantly affect our profitability.
• We also have a number of contracts in which a portion of our compensation depends on performance measures such as cost-savings, revenue enhancement, benefits produced, business goals attained and adherence to schedule.
• These goals can be complex and may depend on our clients actual levels of business activity or may be based on assumptions that are later determined not to be achievable or accurate and could negatively impact our profit margins if not achieved.
• Similarly, if we experience unanticipated delivery difficulties due to our management, the failure of third parties or our clients to meet their commitments, or for any other reason, our contracts could yield lower profit margins than planned or be unprofitable.
• Risk Factors 18 liabilities.
• The plan aims to prevent the proliferation of separate new digital taxes and to ensure a fairer distribution of profits among countries by creating a new global system to tax income based on the location of users, and to impose a floor on tax competition through the introduction of a global minimum tax.
• Ireland and other countries where we operate have enacted Pillar Two, the OECD s global minimum tax rate, which applies to us beginning with fiscal year 2025.
• On June 28, 2025, the G7 released a statement on global minimum taxes that outlined, among other items, that work will be done to simplify the overall Pillar Two administration and compliance framework.
• In addition, our currency hedging activities, which are designed to partially offset the impact on consolidated earnings related to the changes in value of certain balance sheet items, are themselves subject to risk and might not be successful.
• One aspect of our strategy is to continue to grow in our key markets around the world.
• Our strategy might not be successful.
• If any of these circumstances occurs, we have a greater risk that interruptions in communications with our clients and other Accenture locations and people, and any down-time in important processes we operate for clients, could result in a material adverse effect on our results of operations and our reputation in the marketplace.
• Sovereignty initiatives or other nationalist trends in our markets may result in local sourcing initiatives, conflicting local or regional requirements, or other developments that may make it more difficult or costly to operate in or negatively impact demand for our solutions and services in those markets.
• While these developments have not materially impacted our ability to deliver services to our clients, international conflicts are unpredictable and we might not be as successful in mitigating these operational risks in the future.
• We are unable to protect our people, facilities and systems, and those of our ecosystem partners, suppliers and clients, against all such events.
• It might also become more difficult to maintain our Table of Contents ACCENTURE 2025 FORM 10-K Item 1A.
• Ongoing business may be disrupted, and our management s attention may be diverted by acquisition, investment, transition or integration activities.
• In addition, we might need to dedicate additional management and other resources, and our organizational structure could make it difficult for us to efficiently integrate acquired businesses into our ongoing operations and assimilate and retain employees of those businesses into our culture and operations.
• The number of transactions we execute annually may increase this risk.
• For example, we may face litigation or other claims as a result of certain terms and conditions of the acquisition agreement, such as earnout payments or closing working capital adjustments.
• Risk Factors 21 We also periodically evaluate, and have engaged in, the disposition of assets and businesses.
• In addition, the contracting practices of competitors, along with the demands of increasingly sophisticated clients, may cause contract terms and conditions that are unfavorable to us to become new standards in the industry.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.