Financial Reporting Dossier

A. KEY GLOBAL UPDATES

1. FRC: PUBLISHES GUIDANCE PROVIDING CLARITY TO AUDIT PROFESSION ON THE USES OF AI

On 26^th June 2025, the Financial Reporting Council (FRC) has published its first guidance on the use of artificial intelligence (AI) in audit, alongside a thematic review of the six largest firms’ processes to certify new technology used in audits.

FRC observed that most firms had well-established processes in place to certify Automated Tools and Techniques (ATT)prior to deployment for use in audits. However, in some cases, these processes were less mature and not supported by documented policies. They identified various examples of good practice across the certification process. This included innovative ways to identify opportunities for using ATTs in audits, guiding audit teams through the ATTs available to them depending on their requirements and targeting required training to relevant users. They also observed good practice across some firms to proactively review ATTs over time to confirm they remain appropriate for use in audits.

As AI tools continue to be utilised in audit, this new guidance outlines a coherent approach to implementing a hypothetical AI-enabled tool, and offers insights into FRC documentation requirements, all designed to suppo