The Financial Reporting Council (FRC) has published its first guidance on the use of artificial intelligence (AI) in audit, alongside a thematic review of the six largest firms’ processes to certify new technology used in audits.
As AI tools continue to be utilised in audit, this new guidance outlines a coherent approach to implementing a hypothetical AI-enabled tool, and offers insights into FRC documentation requirements, all designed to support innovation across the audit profession.
Mark Babington, FRC Executive Director of Regulatory Standards, said:“AI tools are now moving beyond experimentation to becoming a reality in certain audit scenarios. When deployed responsibly, they have significant potential to enhance audit quality, support market confidence, drive innovation and ultimately contribute to UK economic growth.
“The FRC continues to support and encourage innovation in audit. This guidance aims to illustrate how AI can enhance audit work as well as clarify FRC expectations around proportionate, appropriate documentation of tools that use AI.
“We recognise that this field is moving quickly and will continue to engage across the profession, both in the UK and internationally, to support innovation and the appropriate use of AI.”
