Hefty cost! KMPG partner hit with $7,000 penalty for using AI to take test on AI

KPMG Australia has been fined a hefty AUD$10,000 ($7,000) after one of its partners allegedly used AI tools to cheat on an internal AI-related training course.

According to the Financial Times, the partner, whose name was not publicly disclosed, had to redo the test. They allegedly uploaded the educational material to an AI platform to help answer questions about AI.

More than two dozen employees were caught using AI tools to take internal exams this financial year, according to the FT report citing KMPG.

These incidents have led to increased concerns about the use of AI-enabled fraud at leading accounting firms. The latest incident is the latest example of a professional company struggling with employees using AI to pass internal tests or produce work for clients.

KPMG used its own AI detection tool to find out about the fraud, according to the Australian Finance Review, which first reported the matter.

“Like most organizations, we are grappling with the role and use of AI in relation to internal training and testing,” Andrew Yates, chief executive of KPMG Australia, told the FT.

“It’s a very difficult thing to overcome, given how quickly society has adopted it,” he added.

Yates said the company wants to strengthen its approach in some regimes.

“Given the daily use of these tools, some individuals violate our policy. We take this seriously. We are also looking at ways to strengthen our approach within the current self-reporting regime.”

No other action taken

The issue came to the fore last week when Australian Greens Senator Barbara Peacock pointed out a “misdemeanor” at KPMG during the Senate inquiry into the management of the sector.

Peacock said it was “extremely disappointing” that further action had not been taken.

“We have a toothless system where fraudsters get away with a lot,” he said.

The Australian Securities and Investments Commission, the country’s corporate regulator, said it had confirmed the incident with KPMG. But he refused to take any action until the accountants’ professional trading authority initiated proceedings against the partner.

Cheating scandals worry the big four

In recent years, the big four accounting firms have been struggling with fraud incidents.

KPMG Australia was fined AUD615,000 for “rampant” fraud in 2021. It comes after authorities found more than 1,100 partners at the firm were involved in “improper answer sharing” during tests designed to assess skill and integrity.

All four major firms, including Deloitte, PwC, EY and KPMG, have faced fines in different countries due to cheating scandals in recent years.

Artificial intelligence fuels rule-breaking

As artificial intelligence takes over the world, it also introduces new ways to break the rules.

The Association of Chartered Accountants, the world’s largest accounting body, scrapped online exams last year and said it would require accounting students to take the exams in person. The organization said it would otherwise be very difficult to detect whether someone is cheating on exams using artificial intelligence.