Grounded Output

The Latest

  1. Professional ethics Client data and confidentiality

    A CCAB Draft Case Study Says Client Authorization Is Still Required Even When Client Data Is Processed to Create Synthetic Data

    In draft case studies on the ethical use of AI, published for consultation in June 2026, the Consultative Committee of Accountancy Bodies sets out a fictional firm's plan to train its own large language model on synthetic data derived from actual client data, and the concerns raised about it.

  1. Tax authorities and e-invoicing

    HMRC Will Become the UK Peppol Authority for E-Invoicing, and the Government's Roadmap Says the Authority Will Not Receive Copies of VAT Invoices for Business Transactions

    In a roadmap published on October 28, 2026, HMRC and the Department for Business and Trade set out the milestones toward mandatory e-invoicing for VAT invoices from April 1, 2029, and say that "No decisions have been taken" on whether e-invoicing digital reporting should be introduced.

  2. Ownership and vendors Who may own a firm

    Singapore's Accounting and Corporate Regulatory Authority Says Public Accountants Must Retain Effective Control Under External Private Capital Arrangements

    In a practice direction issued on April 6, 2026, Singapore's Accounting and Corporate Regulatory Authority sets out what it expects of accounting entities "considering, implementing, or operating under" arrangements "that introduce non-public accountant ownership or economic participation in an accounting entity."

  3. AI laws

    The European Banking Authority Maps the AI Act Against EU Banking and Payments Law for AI That Assesses the Creditworthiness of Natural Persons

    In a letter of November 21, 2025, the European Banking Authority tells the European Commission where EU banking and payments law already has obligations relevant to the AI Act's requirements on high-risk AI used to assess creditworthiness, including where the act "does not envisage targeted derogations or other regulatory synergies."

  4. Evidence and documentation Documenting AI-prepared work

    The UK's Financial Reporting Council Says Investigation Subjects Must Be Ready to Identify, Explain and Justify Their Use of AI

    In its Annual Enforcement Review of July 2026, the Financial Reporting Council says it anticipates extensive scrutiny of the use of AI in financial reporting, audit and actuarial work in the year ahead, and lists "use of AI" among the communication channels in its advice on firms' data retention policies.

  5. People and training

    The Solicitors Regulation Authority Proposes to Reflect Technology and AI Within Solicitors' Existing Competences Rather Than as a Standalone Competence

    In a consultation open from October 8 to December 3, 2026, the regulator of solicitors in England and Wales proposes changes to the statement of the competence it expects of solicitors, among them references to technology and AI in ethics, in research and drafting, and in supervising others.

  6. Ownership and vendors Who may own a firm

    Accountancy Europe Says Private Equity-Backed Consolidation of European Accountancy and Audit Firms Continues at a Significant Pace

    In an update dated July 2026, Accountancy Europe counts the publicly reported private equity transactions in European accountancy and audit firms from January 2025 to April 2026, and says some of the platforms built in the first wave of consolidation "are now facing questions about exit and refinancing."

  7. When AI-prepared work goes wrong Cases and sanctions

    An Orange County Appeals Court Sanctions a Supervising Lawyer Who Says He Reviewed a Petition's Arguments but Not Its Citations

    In an order of August 2026, the appellate division of Orange County's superior court in California sanctions two lawyers, one of them the supervising attorney, who did not review the citations, over a petition whose table of authorities listed four cases that "appeared to have been fabricated" by generative AI.

  8. Banks and model risk

    Australia's Prudential Regulator Says Assurance Practices Are Not Keeping Pace With AI at the Selected Large Entities It Engaged With

    In a letter of April 30, 2026 to the entities it regulates, APRA reports what it found among selected large banks, insurers and superannuation trustees, among them a reliance on "point in time and sample based assurance methods" that it calls "ill suited to probabilistic models that learn, adapt and degrade over time."

  9. When AI-prepared work goes wrong Cases and sanctions

    California's Office of Tax Appeals Says an Appellant Cited Opinions of the Tribunal That Do Not Exist

    In a precedential opinion issued on May 15, 2026, California's Office of Tax Appeals says an appellant in a sales tax case cited opinions of the tribunal that do not exist, and that parties and representatives appearing before it "are expected to know about the risk of AI hallucination."

  10. Oversight and accountability

    PCAOB Staff Say Audit Committee Chairs Are Increasingly Seeking Insights From Their Auditors on AI's Potential Impacts on Financial Reporting

    In a Spotlight of April 2026 on its conversations with more than 250 audit committee chairs, the PCAOB's staff report that chairs expressed concerns about "staff preparedness to detect fraud that might be facilitated with the use of artificial intelligence (AI)," and that several asked how AI implementation by audit firms would affect fees.

  11. Ownership and vendors Deals and vendors

    Australian Law Societies' Checklist Asks Law Practices Choosing a Third-Party AI Tool Who Owns the Output and Whether the Contract Covers Its Errors

    A checklist dated February 2026, from the Queensland Law Society with other Australian law societies and the Law Institute of Victoria, is meant to help small and mid-tier firms select and adopt AI tools built by someone else, and asks, among other things, whether the contract includes indemnities for errors caused by the tool.

  12. Banks and model risk

    Respondents to the Bank of England and FCA's 2026 AI Survey Most Often Relied on Vendor Assurance and Contracts to Understand High-Materiality Third-Party AI

    In a report published on October 26, 2026, the Bank of England and the Financial Conduct Authority describe their fourth survey of artificial intelligence in UK financial services, and say third-party implementations made up a larger share of the AI systems firms considered highly material than in 2024.

  13. Banks and model risk

    Connecticut's Banking Department Says It Plans to Review the AI Systems of the Entities It Regulates During Supervisory Examinations

    In guidance dated September 22, 2026, the Connecticut Department of Banking set out its expectations for how the Connecticut-chartered financial institutions and other entities it licenses or regulates should govern the AI systems they use, and said it plans to review those systems and related policies and procedures during supervisory examinations.

  14. Evidence and documentation Documenting AI-prepared work

    Australia's Fair Work Commission Says People Who Use Generative AI to Help Prepare a Document for One of Its Cases Must Say So, Check It and State That They Did

    A guidance note of the Fair Work Commission, published on August 24, 2026 and commencing on October 20, sets requirements for anyone who uses generative AI to help prepare a document to be lodged in one of its cases, and says the checking "must be done by a person."

  15. When AI-prepared work goes wrong Cases and sanctions

    The Sixth Circuit Says Citing Real Cases Did Not Absolve a Lawyer Whose AI-Drafted Briefs Carried False Quotations

    In an opinion of April 3, 2026, recommended for publication, the United States Court of Appeals for the Sixth Circuit said that an appointed lawyer, by the lawyer's own admission, used artificial intelligence to draft two briefs and filed them without properly verifying the cited authorities, and ordered that the lawyer not be paid under the Criminal Justice Act for the time spent on the appeal.

  16. Regulators and standard setters Audit and assurance

    The FRC Says Some Audit Firms Are Now Deploying Generative AI to Perform Audit Procedures and Generate Audit Documentation

    In its Annual Review of Audit Quality 2026, dated July 2026, the UK's Financial Reporting Council says some firms are deploying generative AI tools to perform audit procedures and generate audit documentation, plans a thematic review of how the largest firms govern its use, and says limited use of GenAI on audits was observed in the past year.

  17. Professional ethics Judgment and competence

    A Draft CCAB Statement Says Professional Accountants Cannot Abdicate Responsibility for Outputs Produced by Their Use of AI

    In June 2026 the Consultative Committee of Accountancy Bodies published, for consultation, a draft statement to the accountancy profession on the ethical use of AI. It reminds accountants that they "cannot abdicate responsibility" for outputs produced by their use of AI tools and systems, and it discloses that AI tools were used in preparing the statement itself.

  18. Ownership and vendors Who may own a firm

    The FRC Says It Is Not in Principle Against Greater Participation of External Private Capital in the UK Audit Market

    In a letter dated September 26, 2024, the UK's audit regulator said that ownership structures are "a matter for the firms" and that it is "not in principle against a greater participation of external private capital in the UK audit market." The same letter says there are "important risks that will need to be carefully managed."

  19. When AI-prepared work goes wrong Cases and sanctions

    The Solicitors Disciplinary Tribunal Struck Off a Lawyer Who Filed Misleading AI-Generated Citations and Repeated the Errors After They Were Pointed Out

    In a judgment dated August 25, 2026, the Solicitors Disciplinary Tribunal found that a registered foreign lawyer had filed misleading quotations and citations "in consequence of" his use of generative AI, and had sent further erroneous ones after the errors were pointed out. It ordered him struck off, on this and a separate allegation. The decision is subject to appeal to the High Court, and the order remains in force meanwhile.

  20. When AI-prepared work goes wrong Liability and insurance

    The SRA Warns That Solicitors and Regulated Individuals Who Use AI Remain Accountable for Their Work, Regardless of How It Was Prepared

    In a warning notice published on August 17, 2026, the Solicitors Regulation Authority said that solicitors and regulated individuals who use AI in delivering legal services "remain accountable for their work and outputs, regardless of how that work has been prepared," named two areas of particular concern, false or incorrect information in court and other documents, including citations, and client confidentiality, and said that those who do not have proper regard to the notice are at risk of disciplinary action.

  21. AI laws

    The European Commission Says It Starts Enforcing AI Act Rules on August 2

    On July 31, 2026, the European Commission said that from August 2 its AI Office and national authorities "will begin enforcing" the AI Act, as new transparency rules start to apply. The same release says the AI Omnibus postponed the application of the rules on high-risk AI systems to December 2, 2027.

  22. Fees and pricing

    The Texas Bar's Ethics Committee Says Lawyers May Not Bill Hourly for Time Generative AI Saved

    In its Opinion 705 of February 2025, the Professional Ethics Committee for the State Bar of Texas says that in most typical hourly arrangements, depending on the agreement, a lawyer will likely be able to charge for the time spent using generative AI, including checking its work, but may not charge hourly fees for the time the tool saved.

  23. Banks and model risk

    The FSB Describes Effective Human Oversight of AI at Financial Institutions as Meaningful, Not Nominal

    On October 15, 2026, the Financial Stability Board published its final report on sound practices for financial institutions' responsible adoption of AI. Effective human oversight, it says, is "meaningful," as opposed to oversight that is nominal or driven by what it calls tick-the-box compliance.

  24. Professional ethics Judgment and competence

    Australia's Ethics Standard Setter Says Members of the Australian Accounting Bodies Who Use AI Remain Responsible for the Outcomes

    In a technical alert of October 31, 2025, Australia's Accounting Professional & Ethical Standards Board told professional accountants who are members of the Australian Accounting Bodies that when they use AI they "must continue to meet their ethical obligations" under the APES 110 Code of Ethics for Professional Accountants, and that they remain responsible for the outcomes.

  25. Tax authorities and e-invoicing

    The Treasury Inspector General for Tax Administration Reviewed Five IRS AI Use Cases and Found Risk Management Practices Need Improvement

    On September 24, 2026, the Treasury Inspector General for Tax Administration reported on five AI use cases the IRS presumed to be high-impact. It found that the IRS did not fully document its evaluation of risk, or how it evaluated the quality and appropriateness of the data used in its AI use cases.

  26. Regulators and standard setters Tax

    HMRC Says Generative AI in Tax Software Should Support, Not Replace, Human Judgment

    On January 28, 2026, the UK's HMRC published guidelines for software developers who use generative AI in commercial products that help customers submit information to it. Such software, it says, "should support, not replace, human judgment," and should clearly remind users that making sure each tax return is accurate is their responsibility.

  27. Regulators and standard setters Audit and assurance

    Staff Guidance or Standard Setting: AI in the PCAOB's Request for Comment on Standard Setting, June 2026

    On June 23, 2026, the Public Company Accounting Oversight Board asked for public comment on its standard-setting and research agendas and its approach to standard setting. On AI, it reported "no consensus" among earlier commenters on whether the matters should be addressed through staff guidance or standard setting, and asked whether there are "specific areas of the PCAOB's current standards" that are not "fit for purpose in an AI environment."

  28. Evidence and documentation Testing the data and the tools

    When a Tool Is the Primary Source of Audit Evidence: Canada's Audit Regulator on Technology in Audits, October 2025

    In October 2025, Canada's audit regulator reported examples of deficiencies it identified when a technology-assisted audit tool "provided the primary source of audit evidence." In one, procedures to test completeness and accuracy were limited to the transactions the tool identified as higher risk or outliers.

  29. Regulators and standard setters Audit and assurance

    The Auditor Owns the Outcome: Singapore's Accounting Regulator on Using AI Responsibly, October 2026

    On October 2, 2026, Singapore's Accounting and Corporate Regulatory Authority issued practice guidance for auditors on using AI. "AI can assist, but the auditor owns the outcome," it says, and that responsibility "cannot be delegated to AI."

  30. Professional ethics Judgment and competence

    Responsibility Remains Human: ACCA's Report on Ethics in Accountancy, October 2026

    In a report marked October 2026, the Association of Chartered Certified Accountants found that the use of AI "ranks first in the top three ethical challenges reported by respondents." It also sets out a checklist for ethical challenges involving AI use.

  31. Professional ethics Client data and confidentiality

    Confidential or Privileged Information: APESB's Draft Guidance on AI for Forensic Accountants and Valuers, September 2026

    A preliminary draft among the papers for the board meeting of Australia's Accounting Professional & Ethical Standards Board on September 4, 2026, says in the first of its illustrative examples that "Confidential or privileged client information should not be entered into public AI tools."

  32. People and training

    More Likely to Be Retrained Than Replaced: The New York Fed's Regional Business Surveys on AI and Workers, September 2026

    In September 2026, a post on the New York Fed's economics blog reported its regional surveys of firms on AI. Layoffs in response to AI remained uncommon, it says, and retraining remained the primary way firms adjusted their workforces.

  33. Oversight and accountability

    Cannot Be Delegated to Software: The Texas Accountancy Board on AI and the CPA, August 2026

    In its report of August 2026, the Texas State Board of Public Accountancy says a Texas CPA "remains responsible for all work product" and that "Professional responsibility cannot be delegated to software." The state's Public Accountancy Act and the board's Rules of Professional Conduct "do not specifically address generative AI," it says, but "existing professional obligations apply regardless of the technology used."

  34. Tax authorities and e-invoicing

    Always With Skilled Caseworkers Making Final Decisions: HMRC's Transformation Roadmap Update, July 2026

    HMRC's update on its Transformation Roadmap, dated July 2026, says the UK tax authority will continue rolling out an AI tool that supports its compliance work, "always with skilled caseworkers making final decisions," and that the government will mandate e-invoicing for all VAT invoices from April 2029.

  35. What firms and leaders say

    The Self-Reported Use of AI: The UK Statistics Office on Artificial Intelligence in UK Businesses, July 2026

    In July 2026, the UK's Office for National Statistics reported how UK businesses are using AI, from its survey of businesses. That survey, it says, "treats all reported uses as equivalent," light or embedded.

  36. Oversight and accountability

    Critically Assess AI-Generated Outputs: What Canada's Audit Regulator Heard From Audit Committees in 2026

    In July 2026, Canada's audit regulator published insights gathered in its outreach to audit committees. On their auditors' use of AI, the committees are interested in how firms are "building challenge and validation functions into their AI-enabled audit processes."

  37. Regulators and standard setters Tax

    Not a Substitute for Professional Judgment: The IRS Alert on AI in Tax Practice of June 2026

    On June 24, 2026, the IRS's Office of Professional Responsibility issued introductory guidelines on AI in federal tax practice. Due diligence, it says, "requires verifying the accuracy of facts, citations, and calculations produced by AI."

  38. People and training

    Still in High Demand: ICAEW's Release on AI and Mid-Tier Accountancy Firms, May 2026

    On May 22, 2026, ICAEW published a release on its research into mid-tier accountancy firms. More than two-thirds of the firms, it says, felt that AI "would reduce demand for some early-career accountants."

  39. Banks and model risk

    Not Within the Scope of This Guidance: Generative AI in the US Bank Regulators' Model Risk Guidance of April 2026

    On April 17, 2026, three US bank regulators issued revised guidance on model risk management. Generative AI and agentic AI models, a footnote says, "are not within the scope of this guidance."

  40. Regulators and standard setters Audit and assurance

    Risks, Mitigations and Illustrative Examples: The FRC's Guidance on Generative and Agentic AI, March 2026

    Guidance dated March 2026 from the UK's Financial Reporting Council takes up generative and agentic AI in audit. It is aimed at "the central technical teams within audit firms who are responsible for the development of generative and/or agentic AI tools and supporting methodology."

  41. Ownership and vendors Deals and vendors

    Inaccurate or Fabricated Content: RELX's 2025 Annual Report on the Risks of Generative AI, February 2026

    In its 2025 annual report, RELX, "a global provider of professional information solutions," names "an emerging risk specific to generative AI": the possibility that "models may produce inaccurate or fabricated content."

  42. When AI-prepared work goes wrong Liability and insurance

    Remote to Insureds' Use of AI: A Lloyd's Market Association Survey of Underwriters on AI Loss Scenarios, January 2026

    In January 2026, the Lloyd's Market Association released a survey of its members' opinions on AI loss scenarios. Of the four it reports on, professional indemnity, "AI produces erroneous advice/service to clients, causing a loss," scored highest for overall impact.

  43. Regulators and standard setters Tax

    A Less Experienced Junior Colleague: Seven Professional Bodies on AI in UK Tax Work, January 2026

    In January 2026 the seven professional bodies that jointly prepare Professional Conduct in Relation to Taxation, the principles and standards their members follow in tax work, said that AI output "should also be regarded as if it were prepared by a less experienced junior colleague and reviewed with appropriate scepticism," and that members remain ultimately responsible for their work "irrespective of the use of AI tools in its creation."

  44. Tax authorities and e-invoicing

    Mandatory E-Invoicing for All VAT Invoices From 2029: The UK's Consultation Response, November 2025

    The UK government's response to a consultation on electronic invoicing says that, as announced at Budget 2025, the UK "will introduce mandatory e-invoicing for all VAT invoices from 2029."

  45. Fees and pricing

    Rule 1.5 Does Not Equate Reduced Time With Proportionally Reduced Fees: Virginia's Opinion on Lawyers' Fees and Generative AI, November 2025

    In November 2025, the Supreme Court of Virginia approved a legal ethics opinion on fees for work done with generative AI. Hourly fees can only be based on the actual time spent, it says; a non-hourly fee need not fall just because AI cut the hours.

  46. What firms and leaders say

    Auditor-in-Control Checkpoints: What EY UK's 2025 Audit Quality Report Says About AI, October 2025

    In its 2025 Audit Quality Report, EY UK says its AI capabilities are "risk-managed, tested and approved against principles in this framework, then released with clear guidance and auditor-in-control checkpoints," the framework being the firm's own. The claims are the firm's.

  47. Ownership and vendors Who may own a firm

    Considerations and Questions for Boards of Accountancy: NASBA's White Paper on Private Equity in CPA Firms, October 2025

    A white paper dated October 24, 2025, from the National Association of State Boards of Accountancy sets out questions on private equity in CPA firms for the state boards that regulate them in the United States. It asked for comments by January 31, 2026.

  48. When AI-prepared work goes wrong Liability and insurance

    Whether They Intend to Cover: A Lloyd's Market Association Report on AI and Errors and Omissions Insurance, September 2025

    A report of a committee of the Lloyd's Market Association, published on September 18, 2025, says that a professional who relies on generative AI is "still expected to adhere to the professional standards" of their regulator, and that underwriters "should consider whether they intend to cover losses resulting from reliance on inaccurate GenAI outputs by professional services firms."

  49. Evidence and documentation Documenting AI-prepared work

    Such That Another Professional Can Understand: Australia's Auditing Standard Setter on AI Audit Tools, July 2025

    In July 2025 Australia's Auditing and Assurance Standards Board set out considerations for auditors who use AI tools. Among them is documentation "Such that another professional can understand" the matters the page lists, including the design and use of the tool.

  50. Evidence and documentation Testing the data and the tools

    Functions as Intended: The FRC's Review of How Audit Firms Certify Their Automated Tools, June 2025

    In June 2025 the UK's audit regulator published its review of how the six largest audit firms certify the automated tools their auditors use, a snapshot of the firms' processes as they described them in 2024. It found no formal monitoring by the firms "to quantify the audit quality impact of using ATTs," though their use "may sometimes be captured in other activities such as root cause analysis."

  51. Evidence and documentation Documenting AI-prepared work

    What Should Be Found on the File: The UK Audit Regulator's Guidance on Documenting AI Tools, June 2025

    In June 2025, the UK's Financial Reporting Council published an illustrative example and guidance on documenting tools that use AI in audits. The guidance "sets out expectations on what should be found on the file, and what can reasonably be documented centrally."

  52. AI laws

    It Is Not a Defense: Utah's 2025 Law on Generative AI in Consumer Transactions and Regulated Services

    Utah's S.B. 226 of 2025 says it is not a defense to the violation of a statute its Division of Consumer Protection administers and enforces that generative AI "made the violative statement" or "undertook the violative act." Someone providing services in a regulated occupation must disclose generative AI in a "high-risk" interaction.

  53. Banks and model risk

    Partial Understanding: The Bank of England and FCA's Survey of AI in UK Financial Services, November 2024

    In November 2024, the Bank of England and the FCA published the results of their 2024 survey of AI in the UK financial firms they regulate. Many firms said they had only "partial understanding" of the AI they use, largely because of third-party models.

  54. Professional ethics Client data and confidentiality

    Very Difficult to Track or Control: Australia's Privacy Regulator on Personal Information and Commercial AI Products, October 2024

    In October 2024, Australia's privacy regulator published guidance on using commercially available AI products. Once personal information has been input into an AI system, it says, "it will be very difficult to track or control how it is used."

  55. Evidence and documentation Testing the data and the tools

    Analyzing Information in Electronic Form: The SEC's Approval of the PCAOB's Amendments on Technology-Assisted Analysis, August 2024

    On August 20, 2024, the Securities and Exchange Commission approved amendments to the PCAOB's auditing standards on audit procedures that involve "analyzing information in electronic form with technology-based tools." They "will be effective for audits of financial statements for fiscal years beginning on or after December 15, 2025."

  56. AI laws

    Consequential Decisions: Colorado's 2024 Law on High-Risk Artificial Intelligence Systems, May 2024

    In May 2024, Colorado's governor approved a law on high-risk AI systems used in consequential decisions, among them decisions on lending, insurance and legal services. As signed, the duty of reasonable care it places on those who develop and deploy such systems applies on and after February 1, 2026.