AI in finance and accounting
Where an accountant believes information they are associated with is misleading, R220.9 requires action to seek to resolve it. R220.10 is the end of that road: having exhausted all feasible options and still believing the information misleading, the accountant shall refuse to be or to remain associated with it. Resignation may be the form that takes.
§ 1 — When it applies
29 August 2024
Publication date of the 2024 edition of the IESBA Handbook, shown here as an edition marker. R220.9 and R220.10 were not amended by the Technology-related Revisions and carry no separate effective-date statement that has been verified. It is not a compliance deadline.
§ 2 — In practice
The trigger is lower than most readers assume. R220.9 engages where the accountant knows or has reason to believe that information they are associated with is misleading, and “reason to believe” is not certainty about the number — it is a state of knowledge about how the number came about. Someone who knows a forecast was generated by a tool nobody in the function can explain, on assumptions nobody has seen, is not free to treat the resulting doubt as another department’s problem. Association is the other half of the trigger and it is where AI work gets misread: a figure a model produced and an accountant passed on is the accountant’s information. The tool is not a party to anything and cannot be associated with anything.
What the provision requires is action to seek to resolve the matter, and the application material sets that out in ascending order: raise it with a superior; then with management or those charged with governance, asking that the information be corrected or that users be informed; use the organisation’s ethics or whistleblowing policy; consult a professional body, the internal or external auditor, or legal counsel; and determine whether any duty exists to communicate to third parties or to a regulator. Every rung is a step somebody can date, which is the practical reason this is a procedural duty rather than a matter of conscience. Where the underlying failure sits in a system rather than in a person, an escalation of the kind Article 73 contemplates may be running in parallel, to a different recipient and on a different clock.
R220.10 is the provision this page exists for, and it is the only obligation in the corpus whose discharge may require the professional to walk away. Where, after exhausting all feasible options, the accountant determines that appropriate action has not been taken and there is reason to believe the information is still misleading, they shall refuse to be or to remain associated with it — and the application material notes that resignation may be appropriate. Three words carry the weight. *Exhausted* sets a high bar for stopping earlier. *Determines* makes the conclusion an act with an author and a date. And *remain* reaches information already issued, not only information about to be, so an accountant who learns afterwards that a model-produced disclosure was misleading does not discharge the duty by declining to repeat it.
Two features of AI-assisted work make the ladder harder to climb, and neither alters the duty. The first is diffused authorship: when a figure emerged from a tool that three teams configured, the person to raise it with is genuinely unclear — and the provision’s answer is that unclarity about the recipient is not a reason to stop, because the ladder is defined by seniority and role rather than by who built the model. The second is evidential asymmetry. A colleague who produced a number can be asked how. A model cannot, so the accountant’s belief will usually rest on a reconciliation that failed rather than on an account of what went wrong. That is why the contemporaneous memorandum recording *why* the information was believed misleading is the artefact the whole matter later turns on, and why an audit trail over the tool is worth far more to the accountant than to the engineers who usually ask for it.
§ 3 — Who it binds
Any professional accountant in business who is or will be associated with information they know or have reason to believe is misleading — including information a tool produced and the accountant passed on, approved, or allowed to be issued. The duty follows association rather than authorship, and it continues to run after the information has gone out. The Code takes effect through the IFAC member body that has adopted it; read it as adopted in your jurisdiction.
§ 4 — What discharges it
The artefacts an assessor asks to see, and what makes each one sufficient rather than merely present.
01
What was believed misleading, on what basis, and when the belief formed. Written before the escalation rather than after its outcome, because its whole value is that it fixes a state of knowledge at a date.
02
Each rung: who it was put to, what was asked for, what came back. The ladder is the only part of this duty capable of being proved by something other than recollection.
03
Whether the figure was corrected, and whether people who already had it were told. A fix that reaches only the next reporting cycle leaves the earlier recipients exactly where they were.
04
Where a doubt arose and was closed without going further, the note saying why. Its absence is the finding: nothing then distinguishes a matter considered and settled from one never examined.
05
Where matters reached that point: what was refused, on what date, and which options had been exhausted first. Rare, and the one record an employer will not be keeping on the professional’s behalf.
§ 5 — Worked example
A financial controller at a listed subsidiary uses an AI tool to produce the quarterly inventory-obsolescence provision; the model reads sales velocity and ages stock automatically. In the second quarter the provision falls sharply. The controller cannot reconcile the fall to anything in the business, and finds that the group systems team changed the configuration to exclude a category of slow-moving stock. The divisional finance director says the change was approved, the number is within tolerance, and results are announced on Thursday.
What does R220.9 require before Thursday, and what does R220.10 require afterwards?
Before Thursday: action, not agreement. The controller has reason to believe the provision is understated and knows why, which engages the duty at once; that the change was approved goes to whether the matter can be resolved, not to whether it must be raised. The first rung has been climbed and refused, so the next is management above that level or those charged with governance — and the ask is set by the provision rather than by the controller’s diplomacy: correct the figure, or tell the users. Tolerance is the director’s judgement, not a resolution. Afterwards, R220.10 turns on what the controller then believes. If the announcement goes out and the belief survives it, the duty is not discharged by having objected once. Every remaining feasible option — the ethics policy, the audit committee, the external auditor, legal advice — has to be exhausted before the question of refusing to remain associated even arises. If it does arise, the refusal is the obligation, and resignation is one form it can take.
§ 6 — What a weak answer looks like
The escalation treated as an email. A controller raises a doubt with a manager, gets a reassuring reply, and files the exchange. Two things the provision requires are missing from it. Nothing states what specifically was believed misleading and why, so the reply is answering an impression rather than a case. And nothing records what was asked for — correction, or telling the users — so there is no way to say whether the response met the request or changed the subject. The duty is to seek to resolve. A thread ending in reassurance has resolved nothing; it has only stopped.
§ 7 — Exposure
No Code fine; the disciplinary exposure runs to the individual accountant
Where a member body concludes that an accountant remained associated with information they believed misleading, the matter proceeds through that body’s disciplinary process: reprimand, fine, conditions on practice, or withdrawal of membership and the practising certificate. It reaches the person rather than the employing organisation, and an employer’s approval of the figure does not discharge a provision that turns on what the accountant then believes. Statutory liability for the reporting itself sits under other instruments.
§ 8 — Elsewhere
Where another instrument addresses the same obligation. These are correspondences, not comparisons — the Council does not rank one framework against another.
Article 73 obliges a provider to report a serious incident to authorities within fixed periods. The Code’s ladder ends in a determination about whether any duty to communicate to a third party or regulator exists; where the system is high-risk in the Union, that duty may be somebody else’s.
Finance and accounting standards
R220.8 governs the judgement made before relying on an output. These provisions govern what is owed once the resulting information is believed to be misleading.
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 2 credentials, in the domains named on each card.
Anomaly and fraud flagging, and reporting · 20% 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.
Reliance thresholds, verification and escalation · 20% of the paper
For senior finance and accounting professionals who set the terms on which AI is used across a finance function — and answer for the estimates, controls and disclosures it touches.
§ 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 credentials beside it. Every script is marked by an AI assessor first and an independent human assessor second, and every result is on the public register.
AIAC-FNAF
Certified AI in Finance & Accounting — Fundamentals2 hours · remote, proctored · valid 2 years
AIAC-FNAP
Certified AI in Finance & Accounting — Professional3 hours · remote, proctored · valid 2 years