UK’s FRC publishes guidance on AI use in audit

The UK’s Financial Reports (FRC) has issued its opening guidance, which provides a clearance for the auditing profession in the application of artificial intelligence (AI).

The guidance aims to facilitate an organized approach to integrating artificial intelligence tools into audit and clarifying document requirements, thus enhancing innovation while ensuring the quality of audit.

It has been developed with inputs from the FRC’s technological work group, and aims to help auditors and central teams in auditing companies in developing and using artificial intelligence tools.

It also defines the organizational expectations of third -party technology providers who serve the audit industry.

“Artificial intelligence tools now go beyond experimentation to become a reality in a specific review scenarios. When published with responsibility, it has great potential to enhance the quality of scrutiny, support market confidence, pay innovation, and eventually contribute to economic growth in the United Kingdom,” said Mark Babington’s Executive Director of FRC.

“FRC continues to support and encourage innovation in scrutiny. This guidance aims to clarify how Amnesty International can enhance the audit work as well as clarify FRC’s expectations about the appropriate documents for the tools that use artificial intelligence.”

“We realize that this field is moving quickly and will continue to participate in the profession, whether in the United Kingdom or internationally, to support the appropriate innovation and use of Amnesty International.”

The object review of the FRC, which was conducted along with the guidance, provides an insight into the processes of issuing certificates for new technologies in the largest six audit companies.

It highlights good practices that are decisive to maintain audit quality and summarize corporate methods to verify tools and automatic technologies for audit purposes.

The main advantages of the guidance include a two -part structure with an illustrative example of the application of artificial intelligence in scrutiny and documents principles.

The guidance adopts a wide definition and aspirational appearance of Amnesty International, covers machine learning models and deep learning models, and enhances a balanced approach in documents to avoid excessive details.

It also recognizes the different levels of the required explanation depending on the context and use of artificial intelligence.

The principles are exposed to multi -use and apply to a wide range of artificial intelligence use in scrutiny. It is in line with the Five International Organization of the UK government and is related to the tools obtained from third -party service providers.

Although the guidance is comprehensive, it is not mandatory and does not provide new regulatory requirements, while emphasizing the support of innovation in the current framework.