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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Other current issues

Orla Partners plans to use an AI-based tool that drafts audit working paper conclusions from client data. Under ISQM 1 and the IESBA Code, which approach is most appropriate?

The firm should treat the AI tool as a technological resource under ISQM 1, assess it is fit for purpose, and have qualified staff review its output. Responsibility for the audit opinion stays with the engagement partner and cannot be delegated to the tool or its vendor.

  1. ATreat the tool as a resource within the quality management system, assess its fitness for purpose, and ensure engagement team members review and remain responsible for the conclusions drawnCorrect
  2. BRely on the tool's conclusions without review because the vendor has certified it as accurate
  3. CProhibit review of the tool's output because reviewers might introduce bias
  4. DTransfer responsibility for the audit opinion to the tool's vendor under a contract

Explanation

ISQM 1 treats technological resources as part of the system of quality management, requiring appropriate design, implementation and use. The firm and engagement partner remain responsible for the opinion and must apply professional judgement and scepticism. Vendor certification cannot replace the auditor's own responsibility.

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