Australian academics apologise for false AI-generated allegations against big four consultancy firms

A group of academics has offered an unreserved apology to the big four consultancy firms after admitting they used artificial intelligence to make false allegations of serious wrongdoing in a submission to a parliamentary inquiry.

The accusations have been met with scorn by the firms, concerned that inaccurate information has been given parliamentary privilege to unfairly tarnish the reputation of its staff.

The academics, who specialise in accounting, were urging a parliamentary inquiry into the ethics and professional accountability of the consultancy industry to consider broad regulation changes, including splitting up the big four.

Part of the original submission relied on the Google Bard AI tool, which the responsible academic had only begun using that same week. The AI program generated several case studies about misconduct that were highlighted by the submission.

The original submission falsely accused KPMG of being complicit in a “KPMG 7-Eleven wage theft scandal” that led to the resignation of several partners. It also accused KPMG of auditing the Commonwealth Bank during a financial planning scandal. KPMG never audited the Commonwealth Bank.

Deloitte’s general counsel, Tala Bennett, also expressed concern about the submission wrongly accusing her firm of being sued by the liquidators of the collapsed building company Probuild for allegedly failing to properly audit its accounts. Deloitte never audited Probuild.

The submission raised concerns about a “Deloitte NAB financial planning scandal” and wrongly accused the firm of advising the bank on a scheme that defrauded customers of millions of dollars. Deloitte told the Senate there was no such scandal.

It also accused Deloitte of falsifying the accounts of a company called Patisserie Valerie. Deloitte had never audited the company.

“Deloitte supports academic freedom and constructive discourse in relation to those matters currently before the committee, however, it considers that it is important to have factually incorrect information corrected,” Bennett said.

“It is disappointing that this has occurred, and we look forward to understanding the committee’s approach to correcting this information.”

KPMG has written to the academics’ employers to state that while they respect academic freedom, they will seek to publicly correct the record to protect the reputation of their staff.

This is believed to be the first time a parliamentary inquiry has grappled with the issue of artificial intelligence generating false accusations that are subsequently covered by parliamentary privilege, which prevents defamation law suits.

The sections of the submission that contained false information generated by artificial intelligence will now been removed. A new document is expected to be uploaded to the Senate inquiry website.

skip past newsletter promotion

Sign up to Afternoon Update

Our Australian afternoon update breaks down the key stories of the day, telling you what’s happening and why it matters

Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.

after newsletter promotion

In a letter to the Senate, emeritus professor James Guthrie claimed responsibility for the error, excusing the other academics.

“Given that the use of AI has largely led to these inaccuracies, the entire authorship team sincerely apologises to the committee and the named Big Four partnerships in those parts of the two submissions that used and referenced the Google Bard Large Language model generator,” Guthrie said in the letter.

“Given we are also accounting academics, we are deeply invested in the public interest and ensuring accountability and transparency in the sector – which is why we unreservedly offer our apologies and deep regret.”

Guthrie said the factual errors were “regrettable” but insisted “our substantive arguments and our recommendations for reform remain important to ensure a sustainable sector built on shared community values”.

“I now realise that AI can generate authoritative-sounding output that can be incorrect, incomplete or biased,” Guthrie said.

The Liberal senator Richard Colbeck, who chairs a separate inquiry into the consulting industry, said the incident was “a salient reminder to everyone to check your sources”.

“This shows how out of control things can get if basic facts are not correct.”

Leave a Comment