The Financial Reporting Council (FRC) has prompted the Big Four audit firms in the UK to disclose the measures they are implementing to prevent exam cheating facilitated by AI tools such as ChatGPT, according to reports from The Telegraph.
This initiative comes amid concerns that individuals might exploit such technologies to circumvent rules, potentially undermining audit quality.
The FRC has reportedly engaged in discussions with the UK’s largest auditors and professional accountancy organisations to ensure that robust mechanisms are in place to identify, monitor, and address any cheating incidents.
It is reported that KPMG UK now regularly reminds its staff during mandatory audit training sessions that cheating with AI tools is unacceptable and could lead to dismissal.
Similarly, Deloitte UK has informed its trainees that the use of AI during exams is strictly prohibited and would be treated as serious misconduct.
The Institute of Chartered Accountants in England and Wales (ICAEW) has been proactive in collaborating with regulators to continuously monitor and manage the risks of exam malpractice. Despite being a 144-year-old institution with over 208,000 members, the ICAEW ensures that its audit exams are conducted under strict supervision, making it difficult for candidates to use AI chatbots undetected.
According to The Telegraph, an ICAEW spokesman stated that the institute remains vigilant about the evolving use of AI and its potential risks. Moreover, the ICAEW is exploring how AI might be utilized to improve the examination experience in the future as the technology becomes more prevalent in professional settings.
The organisation emphasizes that its exams are designed to reflect the skills needed in the modern and future accountancy landscape.
This focus on AI comes in the wake of several high-profile cheating incidents within the accounting sector in recent years.
In 2022, the FRC mandated a stricter enforcement against cheating after discovering that numerous employees had shared answers during online tests that were introduced during the COVID-19 pandemic. The investigation, which extended to the Big Four’s operations in the US, Canada, and Australia, uncovered that trainee accountants had exchanged answers via email and messaging platforms such as WhatsApp.
Recently, KPMG Netherlands was hit with a record fine of $25 million (£20 million) by the Public Company Accounting Oversight Board after it was found that numerous staff members, including top executives, had cheated on their ethics exams.