Source: Financial Times
The FRC’s guidance establishes a liability firewall: AI tools can augment audit work, but they don’t transfer responsibility from human auditors to the algorithm. This matters because audit firms have financial incentive to treat AI as a scapegoat for missed red flags, and regulators are moving preemptively to prevent that dodge. Regulators understand AI adoption in high-stakes professional services will accelerate regardless—so they’re locking down accountability now, before the industry tries to diffuse it.