Key takeaways:
- New resources from CCAB outline how accountants can use AI ethically.
- These include ethical dilemmas for accountants to test their judgement.
- They cover common roles for the profession.
Artificial intelligence (AI) is a potentially useful tool, but it also poses some tricky questions for accountants. The pressure is on for us all to embrace it, but – as with any new thing – there is a danger that we get pushed into uncomfortable territory in the pursuit of efficiencies and cost savings.
As part of a soft launch of CCAB’s new AI and ethics resources, the body wants to start a discussion with the profession about the ethics surrounding AI.
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This audio file was produced by AI and is based on the Insights article above on succession planning.
CCAB has published a draft statement to the profession on the ethical use of AI and draft case study scenarios for accountants to test their instincts.
The dilemmas: what would you do?
CCAB’s case studies outline hypothetical scenarios based on different roles and workplace settings, and the body wants you to think about how you should respond.
Try to apply the ‘conceptual framework’ approach to identify, evaluate and address threats to the profession’s fundamental principles.
Suggested answers can be found on the CCAB website.
1. Mid-size business: The presentation rush job
You are CFO of a manufacturing company. Your CEO has asked you to put together a draft three-year strategy and one-year business plan for consideration at the next board meeting, which is in just two weeks.
Given the time crunch, you decide to use the free version of a public AI tool to speed up the process. You ask your finance team to feed previous company reports, financial data, market analyses and other relevant materials into the tool, and prompt it to produce a three-year strategy and one-year business plan for a firm in your sector.
While you and your CEO are initially pleased with how professional the output looks, you re-read it the night before. You realise with horror that the AI has recommended outsourcing manufacturing operations to an authoritarian regime with a poor human rights record. It also appears to have accessed non-public information about competitors.
There’s no time to start from scratch; you will have to adapt the AI’s work.
How do you make this right?
2. Accountant in practice: where’s the judgement?
You are a partner in a mid-sized accounting firm that has invested in an AI audit platform. It:
- automatically extracts information from client financial systems,
- analyses entire transaction populations instead of samples,
- identifies anomalous patterns, and
- generates risk assessments.
Your audit team has used the tool on an audit for a large retail client. The AI flagged certain transactions as ‘high risk’ suggesting potential revenue recognition issues. The engagement manager tries to explain this to the client’s CFO, but cannot back it up beyond “the AI system identified them as anomalous”.
The client angrily responds arguing that your firm is over-reliant on black box technology. Where is the appropriate judgement when conducting the audit?
How do you respond?
3. Accountant in a large firm: is it synthetic enough?
You are a partner responsible for innovation and technology at a large global accounting firm. You aredeveloping a large language model (LLM) to enhance service lines, including audit, tax and advisory.
As part of this, your tech team suggests creating a synthetic dataset based on actual client data for LLM training. They say that this will make the model’s performance stronger. They assure you that, while it’s based on real client data, it won’t use any information in the training. Instead the data will be used to create “statistical probabilities and patterns”.
The tech team stresses that competitors are creating similar tools, so the project needs to move forward to maintain your competitive edge.
What do you do?
4. Non-executive director: who signed this off?
You are an experienced accountant serving as a non-executive director and chair of the audit committee for a listed technology company.
The company is now using AI to automate big chunks of its financial reporting process, including complex revenue recognition calculations for long-term contracts and intangible asset valuations.
During the quarterly audit committee meeting, management presents strong financial results, pointing to the AI for creating efficiencies and improving insights.
When questioned by the committee, the CFO and finance team cannot answer how the AI arrived at certain key figures. The system, they say, uses complex algorithms.
You can’t see any documented board-level discussion, or approval, of the use of this AI tool for financial reporting. There’s nothing on the scope, or a risk assessment.
What’s your response?
5. Public sector professional: to cut or not to cut?
You are a senior accountant in a central government finance department advising on resource allocation. The department has brought in an AI tool designed to analyse vast public spending datasets and predict the long-term effectiveness and value for money of various social programmes.
The AI flags a long-running community health scheme in a deprived area as having a low predicted social return on investment over the next decade. As such, it recommends reallocating its funding to a newer digital-skills programme. It isn’t clear how it reached that conclusion.
Programme managers argue that the scheme has improved the sense of community in the area, as well as preventative health benefits. Senior managers, however, want to see quick efficiency savings from the AI’s conclusions.
Who do you listen to?
CCAB’s AI resources
CCAB has created an online AI hub is part of an initiative to engage with the profession on the ethics of AI, rather than the usual pure risk-management approach adopted by the sector.
David Gomez, Senior Ethics Adviser at ICAEW, says: “AI tools offer significant opportunities to enhance efficiency, insight, quality and effectiveness. However, they can also give rise to complex ethical risks that are novel in scale and speed.”
The CCAB’s new webpages include a series of AI-generated podcasts and links to a range of useful AI resources published by CCAB member bodies, IESBA and the International Federation of Accountants.
CCAB is keen to engage with professional accountants and you are encouraged to join the conversation at ccab.org.uk/ai-hub.
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