Ethical Implications of Artificial Intelligence in Accounting and Auditing: Challenges and Mitigation Strategies
Dr. Avinash Anand Patil
Asst. Professor
Department of Accountancy
Ganpatrao Arwade College of Commerce
Sangli. Ph- 7083831008.
Abstract
The integration of Artificial Intelligence (AI) into accounting and auditing has transformed the profession, enabling automation, advanced analytics, and fraud detection. However, this evolution presents significant ethical challenges, including data privacy, bias, lack of transparency, over-reliance, Data Ownership and Intellectual Property Risks, Job Losses, Cybersecurity Threats, Compliance with Rules and Standards and accountability concerns. This paper identifies the key ethical issues arising from the adoption of Artificial Intelligence in Accounting and Auditing Practices, Real-life examples where using AI in these areas caused ethical issues and practical ways to reduce these risks. The findings or recommendations highlight the Establish AI Ethics Committees in accounting firms, High efforts to improve transparency, Following Strict Data Privacy Protocols, Clarity for responsibility for Errors and Frauds, Regularly updating of AI models, Provide training for employees, Client Consent for AI Use, Engage with bodies like ICAI, IFAC, and SEBI to develop AI-specific accounting and auditing standards, Strong monitoring system for AI Accounting and Auditing against Cybercrime, Continuous professional education for accountants and Auditors on AI ethics etc. The rise of artificial intelligence (AI) in accounting and auditing presents an opportunity, not a threat, to the profession. While AI won’t replace accountants and auditors, it will transform their roles by automating tasks and improving efficiency
Key Words: Artificial Intelligence (AI), Accountability, Errors and Frauds, Intellectual Property Risks, AI Ethics, Cybersecurity, IFRS (International Financial Reporting Standards), GST (Goods & Service Tax)
DOI link – https://doi.org/10.69758/GIMRJ/2509I9VXIIIP0007
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