LATEST UPDATE

Innovative new guidance supports audit firm adoption of emerging AI technologies

The Financial Reporting Council has published guidance to support audit firms in the responsible use of generative and agentic AI in audit engagements, helping firms manage risks to audit quality while realising efficiency and quality benefits. The guidance codifies good practice, rather than addressing identified deficiencies, and reinforces that auditors remain fully accountable for audit quality.

At a glance: Generative and Agentic AI Guidance outlines a practical framework for building appropriate confidence in AI outputs, supported by professional judgment and illustrative real-world examples, and aligns the use of AI with firms’ existing quality management responsibilities under ISQM 1.

The guidance is available on:
https://media.frc.org.uk/documents/Generative_and_Agentic_AI_Guidance_factsheet_quJLgito.pdf