This article is for informational purposes only and does not constitute audit or legal advice. You should consult with a qualified professional before making any decisions about the use of AI in your firm.

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What Are the Risks of Using ChatGPT for Audit Work Papers?

Let's be blunt. Using the free, public version of ChatGPT to draft any part of your audit work papers is not just a bad idea; it is an act of professional negligence. It is a flagrant breach of client confidentiality, a violation of your professional standards, and a regulatory car crash waiting to happen. If you or your staff are doing this, you need to stop. Now.

The appeal of ChatGPT is obvious. It can summarise documents, draft narratives, and check for grammatical errors in seconds. It seems like the perfect digital assistant for the time-pressed auditor. But the free version of ChatGPT comes at a very high price: your client's data.

The Confidentiality Catastrophe

When you use the public version of ChatGPT, the data you input can be used by OpenAI to train its models. This is not a secret; it is in their terms of service. This means that if you paste in a client's trial balance, a summary of an internal control deficiency, or even a draft of your audit opinion, you are feeding that confidential information directly into a publicly accessible system.

Imagine explaining to your client that their sensitive financial data is now part of the training set for a global AI model. Imagine explaining it to the Information Commissioner's Office (ICO).

This is not a theoretical risk. It is a direct and immediate breach of your fundamental duty of confidentiality.

The Hallucination Hazard

Beyond the confidentiality crisis, there is the critical issue of accuracy. Generative AI models like ChatGPT are notorious for "hallucinating" – inventing facts, figures, and references with absolute confidence. They are designed to be plausible, not truthful.

We have already seen a major consulting firm forced to issue a refund after their AI-generated report for a government client was found to contain fabricated references. In the context of an audit, the consequences could be far more severe.

Risk of Using ChatGPT for Work Papers	Example Scenario
Fabricated Summaries	You ask ChatGPT to summarise a complex lease agreement. It confidently produces a summary that misses a crucial break clause, leading you to misjudge the client's liabilities.
Invented Explanations	You ask ChatGPT to provide a possible explanation for a fluctuation in a client's gross margin. It invents a plausible but entirely fictional reason (e.g., "a previously undisclosed supply chain issue"), sending your audit team down a rabbit hole and wasting hours of time.
Misinterpreted Standards	You ask ChatGPT to explain the application of a specific IFRS standard. It provides a summary that is subtly incorrect, leading you to apply the standard improperly in your audit testing.

Using these outputs in your work papers without rigorous, independent verification is a failure to exercise due care and professional scepticism.

The Illusion of Efficiency

The argument for using ChatGPT is always efficiency. But it is a false economy. The time you might save in drafting is dwarfed by the time you must then spend meticulously verifying every single word, every single fact, and every single number that it generates.

And if you are not doing that verification, you are not performing an audit; you are conducting a high-stakes gamble with your client's business and your firm's reputation.

What About a Private, Enterprise Version?

Using a private, sandboxed version of a large language model (like ChatGPT Enterprise) can mitigate the confidentiality risk, as your data is not used for public model training. However, it does not eliminate the hallucination hazard.

Even in a private instance, the model can still generate inaccurate or misleading information. The need for rigorous human verification remains absolute. Your AI governance framework and your audit methodology must account for this.

The Bottom Line: There Are No Shortcuts in an Audit

ChatGPT and other generative AI tools are powerful technologies. They have the potential to be valuable assistants in the audit process, helping with tasks like summarising lengthy documents or performing initial data analysis.

But they are not a substitute for the professional judgment, critical thinking, and scepticism of a trained auditor. And they certainly cannot be trusted to draft the core of your audit work papers.

Using the free version of ChatGPT for any client-related work is a fireable offence. It is a breach of your most basic professional obligations.

There are no shortcuts to quality in an audit. And any tool that promises you one should be treated with the utmost professional scepticism.

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