Big Accounting Firms Fail To Track AI Impact on Audit Quality, Says Regulator (ft.com) 17
The six largest UK accounting firms do not formally monitor how automated tools and AI impact the quality of their audits, the regulator has found, even as the technology becomes embedded across the sector. From a report: The Financial Reporting Council on Thursday published its first AI guide alongside a review of the way firms were using automated tools and technology, which found "no formal monitoring performed by the firms to quantify the audit quality impact of using" them.
The watchdog found that audit teams in the Big Four firms -- Deloitte, EY, KPMG and PwC -- as well as BDO and Forvis Mazars were increasingly using this technology to perform risk assessments and obtain evidence. But it said that the firms primarily monitored the tools to understand how many teams were using them for audits, "typically for licensing purposes," rather than to assess their impact on audit quality.
The watchdog found that audit teams in the Big Four firms -- Deloitte, EY, KPMG and PwC -- as well as BDO and Forvis Mazars were increasingly using this technology to perform risk assessments and obtain evidence. But it said that the firms primarily monitored the tools to understand how many teams were using them for audits, "typically for licensing purposes," rather than to assess their impact on audit quality.
Pass the popcorn (Score:1)
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"Those who fail to remember that there are two types of classification error are condemned to rediscover it"
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Indeed. Easy solution: Make the C-levels personally accopuntable, including with their own wealth and going to prison.
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Indeed. Easy solution: Make the C-levels personally accopuntable, including with their own wealth and going to prison.
Tell me something. How “easy” do you think it would be to hire a C-level after you did that?
Would YOU take the job? How much? How much would it take to absorb 100% of the responsibility?
Just curious if you’ve actually thought that through, or if you’re just suggesting the eradication of executives and boards. To be inevitably replaced with some far worse.
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That is not how it works. You do a good job, you hire competent people and give them enough ressources to work and you are off the hook. At that point it is "accidental errors" only and these do not make you liable. What is going on with the greedy assholes in the big accounting companies is essentially gross negligence. And at least simple negligence is needed for liability.
Yes, I have thought that through and I know a bit more than you how things work.
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That is not how it works. You do a good job, you hire competent people and give them enough resources to work and you are off the hook. At that point it is "accidental errors" only and these do not make you liable.
Oh wow, look at that. The number of "accidental" financial mistakes has skyrocketed 3900% in a single year. What are the odds of that happening after you pass Executive Prison Legislation?
Also, legally define "enough" resources in the era of AI magically solving everything in the HR hiring department. That should be one hell of a courtroom argument 5 years, 2 bankruptcies, and a dissolution from now when the corporate lawyers point to a ChatGPT support contract as the defense. You were saying something a
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Quis auditorem audit?
No big deal (Score:4, Insightful)
This ought to be really easy to rectify:
Ask me anything...
>> Hey, how are you doing on all those audits?
No problems.
>> Great! Keep up the good work.
Better not to look... (Score:2)
Than to find an uncomfortable truth, seeing the huge piles of money they are wasting.
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This.
If they don't understand how it's being handled and they have reassurances then it can't possibly be their responsibility if it all goes wrong, right?
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Better not to look - if you're the only one thinking of looking.
Let's be honest, they're probably all up to their necks in trouble. If one of them decides to clean up and look, it'll be scandal after scandal and loss of customers throughout. Meanwhile, the others all seem to be making out like bandits.
The only solution here is to make them all look for uncomfortable truths, or else accept they're all crooked. Neither of those options are nearly as easy as you ,might imagine.
Obviously (Score:2)
If they would, they would either stop using them or become liable. So they look away and hope for the best. Typical MBA scum.
Progress (Score:2)
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Well, what happens if you put two morons in place to do a job, one supervising the other? Nagative synergies is what is happening, you get 2x the stupid!
The Larry Move. (Score:2)
Are we really all that surprised they’re doing licensing audits? Hell, they’ve probably been silently helping with that for years now through corporate audits.
And if we really had a problem with that whole litigation-for-profit business model, Larry Ellison would have found himself under a fucking guillotine years ago. Back when we should have ended that move.