AI in the world of Accounting & Law: what do the experts think? – NEWSLETTER 245

Auditors: The Guardians of Trust in the Age of AI

As technology advances and artificial intelligence (AI) reshapes industries worldwide, the role of auditors has never been more critical. Each year, on the last Thursday of September, Auditor Proud Day recognises these professionals who quietly safeguard the integrity of our financial and business systems.

Auditing in the AI Era

Auditors have always been trusted to ensure that financial reports are accurate, risks are properly managed, and systems are reliable. Today, their scope extends even further. With AI now preparing reports, managing compliance, and supporting decision-making, auditors are tasked with reviewing not only the outcomes but also the algorithms and data pipelines driving them.

AI as a Tool – Not a Replacement

Far from replacing auditors, AI has enhanced their toolkit. Automated systems allow for faster analysis, scanning millions of transactions and uncovering anomalies at scale. Yet while AI can detect patterns, only human auditors bring context, judgment, and professional scepticism qualities essential for identifying bias, inconsistencies, and ethical concerns.

Guardians of Fairness and Accountability

Because AI reflects the biases present in its training data, auditors play a vital role in interrogating how systems are designed and deployed. They ensure technology strengthens, rather than undermines, fairness and transparency.

The New Frontier of Assurance

The role of the auditor is also expanding beyond financial statements to include sustainability reporting, climate risk, and non-financial disclosures, many of which rely on AI. This requires auditors to deepen their knowledge in data science and technology while staying true to their core strengths: independence, objectivity, and integrity.

Why This Matters

Ultimately, it comes down to one word: trust. Whether you’re an investor, regulator, employee, or customer, confidence in a company depends on reliable information. Auditors are not here to slow down innovation they are here to ensure it’s implemented responsibly.

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Should Law Students Face Sanctions for AI Use too?

Earlier this month, a Victorian lawyer became the first in Australia to face sanctions for using AI in court filings, after submitting non-existent citations. The regulator’s message was clear: AI has its place in legal practice, but it must be used responsibly and ethically.

This incident has sparked a wider debate: if practising lawyers are held to account, should law students – tomorrow’s practitioners, also face sanctions for improper use of AI?

The Educational Challenge

Law schools have a central mission: to train future lawyers in critical thinking, legal reasoning, and professional judgment. Overreliance on generative AI risks undermining these goals, producing graduates who repeat information rather than analyse it. As one academic put it, “The purpose of legal education is not just skills, but the shaping of future professionals.”

Sanctions Already in Place

Across Australia, universities are introducing policies around AI. Some prohibit its use entirely, while others require disclosure of when and how it is used. Breaches can lead to serious academic misconduct proceedings and, in extreme cases, expulsion. The aim is to set standards early, ensuring students approach AI with the same caution and responsibility expected in professional practice.

Ethical Engagement vs. Prohibition

Educators emphasise that banning AI altogether is not the solution. Instead, students should be encouraged to use it thoughtfully and ethically, verifying sources, questioning reasoning, and applying their own judgment. AI may assist research, but it cannot replace empathy, critical analysis, or the human responsibility that lies at the heart of law.

Preparing for the Future

Generative AI will undoubtedly be part of the profession. By setting clear boundaries in education, law schools ensure graduates are prepared to leverage technology responsibly, without compromising academic integrity or professional ethics.

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