Watchdog quizzes big four on cheating in audit exams
THE big four auditors have been asked to explain the measures in place to prevent professionals using CHATGPT and other AI tools to cheat in exams.
The Financial Reporting Council (FRC) has quizzed Britain’s biggest auditing firms and professional accountancy bodies amid fears AI poses to the system. The accounting watchdog said that it continues to “work closely” with the organisations to ensure they have robust systems in place to combat cheating that could undermine the quality of audits.
It is understood KPMG UK warns employees before and during mandatory audit training that using AI will not be tolerated and rule-breakers risk losing their jobs. Deloitte UK also tells students that using AI tools during exams will be considered gross misconduct.
The Institute of Chartered Accountants in England and Wales (ICAEW) said it works with regulators to monitor exam malpractice.
The 144-year old organisation, which has more than 208,000 members, said audit exams are completed in a fully invigilated environment so candidates could not use AI chatbots without being detected. An ICAEW spokesman added: “However, we are constantly monitoring the use of AI and the risk it poses.”
The professional body, established by a Royal Charter in 1880, supervises some 11,500 firms. It is investigating how AI can be used to “enhance the exam experience” as the technology becomes ubiquitous in the workplace.
“Our exams are always moving towards replicating the skills required in the current and future professional accountancy environment,” an ICAEW spokesman added.
Concerns around AI follow a string of recent embarrassing cheating scandals in the accounting sector. In 2022, the FRC ordered top auditors to crack down on cheating after discovering that dozens of employees shared answers to online tests introduced during the pandemic. The regulator found that trainee accountants exchanged answers via email or messaging platforms such as Whatsapp on a number of occasions.
The FRC launched the investigation following reports of widespread cheating across the Big Four’s operations in US, Canada and Australia.
KPMG Netherlands was this month fined a record $25m (£20m) by the Public Company Accounting Oversight Board after hundreds of employees cheated in their ethics exams.