Auditors, Investors Press US Watchdog to Fast-Track AI Guidance

Ah, splendid. The auditors who sign off on the world's most important numbers have decided that the best way to handle artificial intelligence is to ask the regulators to hurry up and tell them what it means. PwC and Baker Tilly — two firms with enough partners to populate a small principality — have joined investor groups in pestering the Public Company Accounting Oversight Board to 'prioritize' staff guidance on AI-driven methods. That's right: the regulated are now lobbying the regulator to move faster, because the machines are already in the engine room and someone needs to draw a manual before the ship hits the reef.

The request itself is a masterclass in corporate doublespeak. 'Help auditors apply existing standards to AI-driven methods' translates as: we have already plugged the black box into the audit trail, and now we would like a blessing, a deadline and a careful note about where to file it. The PCAOB, being a watchdog, is expected to conjure this guidance from its staff without the boring old formality of actual rulemaking, because that might take years and PwC has a quarterly reporting season to impress. Meanwhile, investors — the very people who lose money when audits go wrong — are cheerfully signing the petition for more speed, presumably believing that a quick memo will make the algorithms trustworthy.

And what will this glorious fast-tracked guidance actually say? Either it will be so gloriously vague that any actuarial algorithm, however opaque, can be waved through with a footnote saying 'judgment applied', or it will be so prescriptive that it's obsolete before the PDF is sealed. Either way, the illusion of oversight will be maintained, the billable hours will flow, and when the next great audit scandal erupts — as it always does — the responsible parties will point to the guidance and say they followed it to the letter. Roll on the inevitable committee hearing: at least the witnesses will have slides.