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KPMG partner uses AI to cheat on AI test, faces fine
A partner at big four accounting firm KPMG is facing a $10,000 fine after they were found to have used AI to cheat on an internal AI exam.
The case, which is just one of 28 instances of KPMG staff using AI to cheat on internal exams since July, has pushed the firm to upgrade its AI detection processes to prevent cheating.
As first reported by The Australian Financial Review, the partner, who is a registered company auditor, completed AI training in July, but violated the recommended reference manual for the training on an AI tool to help them answer an exam question.
KPMG’s internal AI detection tools picked up the instance in August.
KPMG will now disclose cases of AI-related cheating in its annual results, and will check that its staff meet their self-reporting obligations in cases of misconduct, both of which will place pressure on its rival organisations to do the same, setting a new standard of transparency in the industry.
The partner who cheated self-reported to CA ANZ, which is currently investigating the case. The other 27 staff are at or below a manager level.
The firm says that the observed cases of AI use for exam cheating highlight the issues with the technology at its current stage. KPMG says it is working to stop these incidents.
“Like most organisations, we have been grappling with the role and use of AI as it relates to internal training and testing. It’s a very hard thing to get on top of given how quickly society has embraced it,” KPMG Australia chief executive Andrew Yates told The Australian Financial Review.
“As soon as we introduced monitoring for AI in internal testing in 2024, we found instances of people using AI outside our policy. We followed with a significant firm-wide education campaign and have continued to introduce new technologies to block access to AI during testing.”
While current regulations do not require KPMG or other accounting and auditing businesses to notify ASIC of misconduct like using AI to cheat on exams, they are required to do so if there is a disciplinary finding by the relevant body. KPMG says it voluntarily notified ASIC as part of its discussions with the agency.
However, the regulator told Greens senator Barbara Pocock that KPMG had not filed a report with ASIC “about the instances of auditors cheating using AI,” before the Financial Review report last December. The Financial Review's reporting led to ASIC contacting KPMG about the incident, and the firm provided the relevant information voluntarily.
