The UK’s Financial Reporting Council (FRC) has launched its first guidance on integrating artificial intelligence (AI) in the audit profession. This guidance aims to streamline the application of AI tools within audit processes while ensuring compliance with documentation standards. Developed with input from the FRC’s Technology Working Group, it assists auditors and central teams in effectively using AI. FRC executive director Mark Babington emphasizes that responsibly deployed AI can significantly enhance audit quality and foster innovation in the sector, positively impacting UK economic growth. The thematic review accompanying the guidance sheds light on certification processes at major audit firms, showcasing best practices essential for maintaining quality. The guidance, structured in two parts, provides principles for documentation and exemplifies AI applications in audits. It adopts a broad definition of AI and aligns with the UK government’s AI principles, aiming to support innovation without imposing new regulatory requirements. The revised UK Stewardship Code, focusing on stakeholder engagement, will take effect in January 2026.
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