U.K. regulator urges auditors to explain AI use in audits
Plans to encourage audit firms to provide companies with details about how they use AI as part of their audit work have been broadly welcomed, but even such use of the latest advanced technology doesn’t alleviate fears around how corporate data may be used, secured, retained, and even made public.
The Financial Reporting Council (FRC), the U.K.’s corporate governance regulator, has published its first guidance on the use of artificial intelligence (AI) in external audit. The overview and accompanying 155-page Thematic Review outline how AI-enabled tools can be used in performing audits and offer insights into the documentation the regulator requires to monitor their use.
The FRC hopes the guidance will support audit firms as they develop and use AI tools in their work, as they seek to become more efficient and save money, while also reminding third-party technology providers what their regulatory requirements and legal duties regarding data and AI use.
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