Source: Financial Times
The Financial Reporting Council’s guidance establishes that deploying AI tools in audits doesn’t transfer accountability—firms remain responsible for failures even when algorithms flag issues or make recommendations. This creates a legal and operational limit on AI adoption in high-stakes compliance work: auditors can automate detection and analysis, but they cannot treat machine outputs as exonerating evidence or reduce their own judgment obligations. The ruling forces a reckoning between the efficiency gains vendors promise and the regulatory reality that automation cannot eliminate professional liability.