AI in finance and accounting
Section 230 was not written about technology and was not amended by the Code’s technology revisions. It is restructured-Code text about human expertise, and it fits the problem exactly: R230.4 requires the accountant to determine whether to decline duties where a threat to competence and due care cannot be addressed, and then to communicate the reasons.
§ 1 — When it applies
29 August 2024
Publication date of the 2024 edition of the IESBA Handbook, given as an edition marker. Section 230 is restructured-Code text and was not touched by the Technology-related Revisions; no separate effective date for it has been verified, and this is not a deadline.
§ 2 — In practice
Section 230 opens by classifying the problem: acting without sufficient expertise creates a self-interest threat to compliance with the principle of professional competence and due care. R230.3 then prohibits the accountant from intentionally misleading an employing organization as to the level of expertise “or experience” possessed — the source’s own spelling, and the two words are not doing the same work. Expertise is what you know. Experience is whether you have done this before. An accountant who has used a class of tool for a month, and lets an employer believe otherwise, breaches the provision without ever misstating a qualification.
230.3 A2 lists the conditions that create the threat, and two of them describe an AI-assisted deadline with uncomfortable precision: insufficient time for performing the duties, and “incomplete, restricted or otherwise inadequate information for performing the duties”. The second is the one that matters here, because information about the tool is information for performing the duties. An accountant handed a model’s output, a close deadline and no route to anyone who can explain how the output was produced is in the condition the paragraph names — and naming it as a threat is what obliges them to address it rather than work through it, which is the discipline R220.8 applies at the moment of reliance.
R230.4 is the provision practitioners do not know they hold. Where a threat to compliance with professional competence and due care cannot be addressed, the accountant shall determine whether to decline to perform the duties in question; and if declining is appropriate, the accountant shall communicate the reasons. Two mandatory acts, and the second gives the first its force. A quiet refusal — handing the task back, going slowly, letting a deadline drift — is not what the provision contemplates. It requires a determination to be made and reasons to be given, which turns an individual’s discomfort into a documented fact the employing organisation now has to deal with. Where the underlying problem is that nobody can obtain evidence about the tool, that is also the point at which the access question stops being an assurance matter and becomes a contracting one.
§ 3 — Who it binds
Any professional accountant in business asked to perform duties they may lack the expertise or the information to perform properly — including duties whose substance is checking, approving or signing off work a tool produced. The threat is a self-interest threat to professional competence and due care, and it arises before the work rather than after it. The Code takes effect through the IFAC member body that has adopted it.
§ 4 — What discharges it
The artefacts an assessor asks to see, and what makes each one sufficient rather than merely present.
01
What was refused, to whom the reasons were given, and on what date. Communicating them is a separate mandatory act, so a decision living only in the accountant’s own notes discharges half the provision.
02
Which of the named conditions were present — time, information, expertise — and what was tried before concluding the threat could not be addressed. It is what makes this a determination rather than a refusal.
03
Manual re-performance, a narrowed scope, an expert brought in, more time requested. A file showing only the outcome invites the reading that nothing short of refusal was ever attempted.
04
What the accountant told the employing organisation about their command of the tool and its method. The prohibition is breached by allowing a belief to stand, so the artefact is the statement rather than the silence.
§ 5 — Worked example
A newly appointed reporting accountant is asked to sign off year-end revenue cut-off testing three days before audit fieldwork starts. The testing is performed by a machine-learning tool the previous incumbent configured. Nobody left in the team can explain the rules it applies, the supplier’s support contract lapsed in March, and the documentation is a screenshot of the configuration screen.
What do R230.3 and R230.4 require, and is refusing an option?
Both named conditions are present — insufficient time, and inadequate information for performing the duties — so the self-interest threat is not a matter of opinion. R230.3 comes first and is easily missed: proceeding without saying that nobody can presently explain the method allows the employing organisation to believe in a level of expertise or experience over this tool that no one has. Saying so is not an admission of inadequacy; it is the provision. Then R230.4, where the question is not whether refusal is permitted but whether the threat can be addressed in three days. There are addressing steps short of refusal — re-perform a sample by hand, narrow the sign-off to what was actually tested, buy the configuration rules back from the supplier. If none is available, declining is what the provision contemplates, and the reasons must be communicated. That is what stops a refusal being filed as a resourcing problem and makes it the finding it actually is.
§ 6 — What a weak answer looks like
The refusal that never happened, expressed as a caveat. The accountant does the work and protects themselves with a sentence in an email noting that the tool’s method could not be verified. It reads as a sensible professional precaution and it engages neither provision: no determination has been made about whether to decline, and no reasons have been communicated in a form anybody must act on. The employing organisation has a caveat, the deadline is met, and the named threat is still sitting under the signature.
§ 7 — Exposure
No Code fine; the member body that adopted the Code determines the consequence
Both provisions are mandatory, and a breach — misleading an employer as to expertise, or performing duties in the face of an unaddressed threat — is a disciplinary matter for the adopting body. Sanctions run from reprimand and fine to conditions on practice and withdrawal of membership and the practising certificate. Nothing in the Code creates an employment consequence for declining, and nothing in it protects an accountant from one.
§ 8 — Elsewhere
Where another instrument addresses the same obligation. These are correspondences, not comparisons — the Council does not rank one framework against another.
Standard 14.1 asks the auditor to determine whether evidence that cannot be obtained is itself reportable. R230.4 puts the equivalent question to the accountant in business, before the work is done rather than after.
Finance and accounting standards
Section 113 states the competence an accountant must maintain. Section 230 governs what happens when a particular set of duties outruns it and the shortfall cannot be closed in the time available.
A correspondence indicates that two instruments address the same underlying obligation. It is not a mapping endorsed by either body, not a statement that one satisfies the other, and not a judgement about which is more demanding.
§ 9 — Where this is assessed
Examined in one credential, in the domains named on each card.
Responsible use and accountability · 15% of the paper
For finance and accounting professionals who use AI in analysis, close and reporting work — and verify the output before the numbers are relied on.
§ 10 — provenance
This page sets out what the instrument requires and what discharges it. The official text is the authority — these go straight to it.
§ 11 — Also read
Certification
What this page sets out is examined, on work the candidate has not seen, in the credential beside it. Every paper is machine marked against its key and every result is reviewed and released by a named person, and every credential is on the public register.
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