UK's FRC releases guidance on AI in audits to enhance innovation and audit quality
From Yahoo Finance: 2025-06-30 11:36:00
The UK’s FRC issues guidance on AI in audits to enhance innovation and ensure quality. Developed with industry input, it clarifies documentation requirements and sets expectations for third-party tech providers. The FRC aims to support responsible AI use to boost audit quality and drive economic growth.
The FRC’s thematic review alongside the guidance highlights best practices for new technology certification at top audit firms. It emphasizes the importance of maintaining audit quality and outlines firms’ approaches to validating automated tools. The guidance includes an example of AI application, principles for documentation, and a broad definition of AI.
The guidance promotes a balanced approach to AI documentation, recognizing different levels of explainability needed based on context. Aligned with the UK government’s AI principles, it’s versatile for various audit scenarios and doesn’t introduce new regulatory requirements. The FRC supports innovation within the existing framework to advance AI use in audits.
In June 2025, the FRC revised the UK Stewardship Code, focusing on value creation and stakeholder engagement. The updated code will be effective from 1st January 2026. “UK’s FRC publishes guidance on AI use in audit” was originally published by The Accountant.