PCAOB and FRC Guidance on AI in Audit: What Every Audit Professional Needs to Know

As artificial intelligence (AI) is increasingly used in audit, regulators and authorities have been paying growing attention to how it is used. For professionals in this space, understanding that AI use sits within a regulatory and supervisory context — and that this context is developing — is important. This guide takes an even-handed, general look at AI in audit and the regulatory dimension, including bodies such as the PCAOB and the FRC. Note that regulatory expectations and guidance in this area are developing and vary by jurisdiction, so always check the current, official guidance from the relevant regulator(s) for your situation, and follow your organisation's policies. For related material, see our guide on audit.

AI and the regulatory context

AI use in audit does not happen in a vacuum — it sits within a regulatory and supervisory context. Regulators and authorities — potentially including bodies such as the PCAOB and the FRC — have shown growing interest in how AI is being used, given its potential impact and risks. The general direction is that the use of AI is expected to be responsible, well-governed, and consistent with existing requirements around matters like accuracy, accountability, risk management, and (where relevant) consumer or market protection. Importantly, this is a developing area: regulatory thinking, expectations and any specific guidance on AI are evolving, and they vary by jurisdiction and regulator. So rather than assuming a fixed set of AI-specific rules, the realistic position is that AI use is expected to comply with existing requirements and be responsibly governed, while regulators continue to develop their approaches. For professionals, the key is to be aware of this context and to check the current, official guidance from the relevant regulators for their specific situation, rather than relying on general or dated assumptions.

Why the regulatory dimension matters

The regulatory dimension matters because audit is an area where standards, accountability and (often) consumer or market protection are important, and where the use of new technology like AI raises questions regulators care about. Using AI in ways that don't meet regulatory expectations — for example around accuracy, governance, accountability or appropriate use — could create real risks. Conversely, using AI responsibly and in line with requirements helps organisations benefit from it while managing those risks. Because regulators are paying attention and developing their approaches, organisations and professionals need to stay aware of expectations and ensure their AI use is consistent with them. This isn't a reason to avoid AI, but a reason to use it thoughtfully and in a well-governed way, with an eye to the regulatory context. For professionals, understanding that AI use is subject to regulatory attention — and ensuring their use is responsible and compliant — is part of using AI properly in a regulated environment.

How to approach AI responsibly in this context

For professionals using or considering AI in audit, a responsible, compliance-aware approach is essential. Check the relevant regulators' current guidance — including bodies such as the PCAOB and the FRC where applicable — since expectations are developing and vary. Ensure AI use is consistent with existing requirements, around accuracy, accountability, governance, risk management and appropriate use. Follow your organisation's policies and governance on AI. Manage the risks — including accuracy, data security, bias and over-reliance — that regulators care about. Maintain accountability, since responsibility remains with people and organisations. Verify AI outputs, rather than relying on them blindly. And stay informed, given that regulatory approaches to AI are evolving. Approached this way — responsibly, with awareness of the regulatory context, and within existing requirements — AI can be used in audit while meeting the standards expected in a regulated environment. Always check the current, official guidance from the relevant regulators for your specific situation, as this is a developing area.

Frequently asked questions

Is AI use in audit regulated?

AI use sits within a regulatory and supervisory context, and regulators (potentially including bodies such as the PCAOB and the FRC) are paying growing attention. The general expectation is responsible, well-governed use consistent with existing requirements. Check current official guidance.

Are there specific AI rules?

This is a developing area — regulatory thinking and any specific guidance on AI are evolving and vary by jurisdiction and regulator. The realistic position is that AI use is expected to comply with existing requirements and be responsibly governed. Always check current guidance.

Why does the regulatory dimension matter?

Because audit involves standards, accountability and often consumer or market protection, and using AI in ways that don't meet expectations could create risks. Responsible, compliant use helps manage those risks.

How should I approach AI in this context?

Check the relevant regulators' current guidance, ensure use is consistent with existing requirements, follow your organisation's policies, manage the risks, maintain accountability, verify outputs, and stay informed.

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