AI accountability in professional services

Since our November 2025 article on AI readiness across the professions (available here), further guidance has emerged from professional and regulatory bodies. The overall direction of travel remains consistent in that AI is not being prohibited, but its use is increasingly expected to be governed, documented and subject to professional judgement.

For insurers, the significance is not that AI creates a wholly new category of professional obligation. Rather, it reinforces familiar risk themes of caution, confidentiality, record keeping, transparency and accountability. The latest guidance suggests that professional bodies are continuing to move towards a shared position that AI may assist professional work, but responsibility for its use remains with the professional.

Financial Reporting Council

The Financial Reporting Council (FRC) has now published further guidance for audit firms on the use of generative and agentic AI tools in audit engagements. Its March 2026 guidance addresses audit quality risks and sets out possible mitigations for firms adopting these tools. It also emphasises the need to exercise professional judgement when seeking to obtain appropriate confidence in AI-generated outputs.

This builds on the FRC’s June 2025 “AI in Audit” material, which considered an illustrative AI-enabled audit tool and provided guidance on documentation requirements. As a result, the FRC’s approach is becoming more detailed and practical. It does not treat AI as a substitute for audit evidence or audit judgement. Instead, it places emphasis on explainability, documentation, validation and the continuing responsibility of the audit firm.

For insurers, this is a useful example of a regulator seeking to codify good practice without preventing innovation. Where firms can evidence risk assessment and supervision, AI use may become easier to underwrite. Conversely, undocumented or informal AI use may create issues in the event of a claim.

Bar Standards Board

Further, the Bar Standards Board (BSB) has issued guidance on the safe and responsible use of AI and other emerging technologies by barristers. The guidance provides a practical framework for barristers using AI, while making clear that existing duties under the BSB Handbook continue to apply.

The BSB’s position is consistent with the wider regulatory trend. Existing professional duties remain the starting point. Barristers must consider confidentiality, competence, supervision, transparency and the risk that generative AI may produce inaccurate or fabricated material. The guidance is particularly relevant in the context of recent concern about hallucinated legal authorities and the use of AI-generated material in court proceedings.

Again, the central message is accountability. A barrister cannot rely on the fact that an error originated from an AI tool. Outputs must be checked, legal authorities verified and client confidential information protected. For insurers, that provides a clearer framework against which to assess both chambers-level controls and individual professional conduct.

A clearer direction of travel

These developments reinforce the conclusions of our earlier articles. Professional bodies are increasingly converging around a common set of expectations that AI use should be used with caution.

RICS remains at the more prescriptive end of the spectrum, with its mandatory global standard for surveying practice taking effect in March 2026. The FRC and BSB have now added further sector-specific guidance in audit and advocacy. Other regulators, including the SRA, continue to emphasise existing duties of competence, client care and professional accountability. The SRA’s February 2026 compliance tips for solicitors confirm that firms may use technology where appropriate but remain subject to the SRA Principles and Standards and Regulations.

Implications for insurers

For insurers, the key question is no longer simply whether a professional uses AI. It is how they use it. Issues may include whether the insured has an AI policy, whether tools have been approved, whether staff have been trained, whether client data is protected, whether outputs are checked, and whether an audit trail is retained.

The latest guidance from the FRC and BSB confirms that professional bodies are not seeking to prevent AI adoption. They are instead seeking to bring AI within existing professional risk frameworks. That should assist insurers in distinguishing between controlled and uncontrolled use.

If you have any questions regarding the information discussed in this article, please contact David McArdle and Anna Benz.

Further reading:

Financial Reporting Council, Innovative new guidance supports audit firm adoption of emerging AI technologies, March 2026: available here

Financial Reporting Council, AI in Audit, March 2026: available here

Bar Standards Board, New guidance supports barristers to safely adopt Artificial Intelligence and emerging technologies, May 2026: available here

Bar Standards Board, Guidance on the use of Artificial Intelligence and Other Emerging Technologies, May 2026: available here

Solicitors Regulation Authority, Compliance tips for solicitors regarding the use of AI and technology, updated February 2026: available here