AI in finance and accounting
R320.11 is the public-practice duty, and it is not a copy of R220.8. It asks a prior and blunter question: where an accountant intends to use the output of technology in a professional activity, they shall determine whether the use is appropriate for the intended purpose. It sits in Section 320, which is about the appointment.
§ 1 — Who it binds
A professional accountant in public practice intending to use the output of technology in undertaking a professional activity: preparing accounts, compiling management information, computing a tax liability, producing a valuation or a forecast for a client. Part 3 of the Code binds the individual in practice, and this duty attaches to the appointment. It takes effect through each IFAC member body that has adopted it.
§ 2 — In practice
The wording is that when a professional accountant intends to use the output of technology in the course of undertaking a professional activity, the accountant “shall determine whether the use is appropriate for the intended purpose”. Compare what that asks for. The Part 2 provision asks what steps are needed to discharge a preparation duty; this one asks whether the use is appropriate at all, which is a gate rather than a calibration. The placement explains why. Section 320 is Professional Appointments, and its sub-headings run from the general through changes in professional appointment to using the work of an expert, then using the output of technology, then other considerations. There is no sub-heading about accepting engagements as such — but the section’s subject is the appointment, which is why the duty falls due when a practice decides what it will do for a client rather than when a file is being prepared.
320.11 A1 lists eight factors, and one differs from its Part 2 counterpart by a single phrase that is doing real work: the oversight factor reads the firm’s oversight rather than the employing organisation’s. That is not tidying. A practice’s oversight of a tool is usually firm-wide while the engagement is not, so a tool approved at firm level may be quite unsuitable for a particular client’s circumstances, and the firm-level approval reads to the person on the engagement like an answer to a question it was never asked. The second distinctive point is that the accountant’s position within the firm bears on whether they can obtain the information needed to make the determination at all. In practice the person using the tool is frequently not the person who can find out how it works, and the Code makes that positional fact part of the ethical judgement rather than an excuse for it — the same asymmetry Article 26 addresses by placing duties on the deploying organisation.
Reading the duty at the appointment rather than at the file changes what a practice has to do with it. A determination that a use is appropriate for an intended purpose can be made once, for a class of engagement, and revisited when either the tool or the purpose moves — which is far more workable than a fresh judgement per deliverable and is the only version a small practice can actually operate. What it cannot become is a firm-wide statement that the tool is approved, because the determination is about the use and not about the tool. The nearest analogue elsewhere in the corpus is the decision at the front of an engagement about what the work will and will not cover, settled before anything is done rather than after.
§ 3 — What a weak answer looks like
The approved-tools list offered as the determination. A practice keeps a register of software the firm has evaluated, and an engagement team treats a tool’s presence on it as the answer. The register records that the firm formed a view about a product. The provision asks whether this use, for this client, for this purpose, is appropriate — which the register was never asked and cannot answer, and which changes the moment a client stops resembling the files the tool was tested on.
§ 4 — What discharges it
The artefacts an assessor asks to see, and what makes each one sufficient rather than merely present.
01
Which use, for which client and purpose, judged appropriate on what basis. A firm-wide approval note is evidence about a product and does not answer the question the provision puts.
02
What the practice has established about the tool across its lifecycle, in a form an engagement team can point to. The factor names the firm’s oversight, so an engagement can lean on it only where it exists in writing.
03
Where the person using the tool could not reach the person who understands it, the record of the attempt. Position within the firm bears on the judgement, so it belongs in the file and not in someone’s memory.
04
What would make it stale: a version change, a new class of client, a different purpose. Without one, a determination quietly becomes a standing permission that nobody reviews.
§ 5 — Worked example
A four-partner practice licenses an AI tool that drafts statutory accounts from a client’s bookkeeping file. The IT partner evaluates it, approves it for use, and circulates a note saying it has been tested on the firm’s own data. A manager then uses it on a client that has just moved from cash to accruals accounting, on a new chart of accounts, with three months of restated comparatives.
Has the firm-level approval discharged R320.11?
No, and the reason is the difference between the tool and the use. The IT partner’s evaluation is real evidence and goes to several of the factors — the tool has been tested, someone in the firm can explain it, oversight exists. What it cannot establish is whether this use is appropriate for its intended purpose, because the client’s circumstances are the part that changed: a restated comparative period on a new chart of accounts is precisely the condition under which a tool tested on ordinary files produces output that is plausible and wrong. The determination belongs to the person taking on this engagement and it is a short one — either a reason to believe the tool handles restatements, or a decision to prepare the comparatives outside it. The positional point bites here too. If the manager cannot find out how the tool maps accounts, that is a fact about the firm’s arrangements which the Code makes part of their judgement, not a reason to proceed and hope.
§ 6 — Elsewhere
Where another instrument addresses the same obligation. These are correspondences, not comparisons — the Council does not rank one framework against another.
Finance and accounting standards
R220.8 places the duty on the accountant in business and turns on the employing organisation’s oversight. R320.11 places it on the accountant in public practice, turns on the firm’s, and asks whether the use is appropriate at all.
Article 26 places duties on the organisation deploying a high-risk system, including the assignment of oversight. R320.11 reaches the individual in a practice who must decide whether a use is appropriate before the engagement proceeds.
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.
§ 7 — When it applies
15 December 2024
Effective date of the Technology-related Revisions to Parts 1 to 3, which introduced R320.11 as new text. An effective date for a code provision rather than a statutory deadline, and it binds a given practitioner through the member body that adopted the revised Code.
§ 8 — Exposure
No Code fine; the practising certificate is the exposure, through the adopting body
The provision binds the accountant in public practice, and a failure is a matter for the IFAC member body that adopted the Code: investigation, then reprimand, fine, conditions on practice, or withdrawal of membership and the practising certificate. For someone in practice the last of those is the operative consequence, because the certificate is what permits the work. Where a jurisdiction separately regulates the practice, that exposure sits under other instruments.
§ 9 — Where this is assessed
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§ 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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