Generative AI Poses New Financial Reporting Hazards for Auditors

Generative AI has ushered in a new era of threats that could undermine corporate accounting and safeguards over that reporting—tasking auditors with vetting how their clients are using the evolving technology, according to industry guidance published Thursday.

“Auditors need to be aware that the information produced by genAI is not necessarily factual and may not be able to be replicated,” according to the report from the Center for Audit Quality, which represents the interests of public company audit firms.

The largest advisory group to the US audit board urged the regulator last summer to issue similar guidance. ...