Artificial intelligence (AI) and digital tools are rapidly transforming the accountancy sector with promises of enhanced efficiency, insight and audit quality. Embracing this innovation wave, however, does not come without risk, and regulators are increasingly alert to the ethical implications.

The Financial Reporting Council (FRC) has very recently issued new guidance on the use of AI in audit, coinciding with ICAEW’s new technology-centred revisions to its Code of Ethics, which came into force on 1 July 2025. Responsible and ethical use of AI is now therefore no longer optional, but a regulatory expectation.