Accounting and consulting giant Deloitte has announced it will offer a partial refund to the Australian government for a report that contained AI-hallucinated quotes and references to nonexistent research. This is just the latest example of a professional firm suffering massive embarrassment for the sloppy use of AI tools.
Ars Technica reports that Deloitte Australia has admitted to using a generative AI tool, specifically Azure OpenAI GPT-4o, in the creation of a report for the Australian government. The report, titled “Targeted Compliance Framework Assurance Review,” was published by the Department of Employment and Workplace Relations (DEWR) in August and cost Australian taxpayers nearly $440,000 AUD (approximately $290,000 USD).
Shortly after the report’s publication, Chris Rudge, Deputy Director of Health Law at Sydney University, noticed several citations to papers and publications that did not exist. This included multiple references to nonexistent reports by Lisa Burton Crawford, a professor at the University of Sydney law school. Crawford expressed concern about the misattribution of research to her name and sought an explanation from Deloitte regarding the generation of these citations.
In response to these findings, Deloitte and the DEWR published an updated version of the report on Friday, addressing “a small number of corrections to references and footnotes.” The updated report included a reference to the use of “a generative AI large language model (Azure OpenAI GPT-4o) based tool chain” in assessing the mapping of system code state to business requirements and compliance needs.
The updated report removed 14 of the 141 sources cited in the original report’s extensive “Reference List.” These deletions included the fake publications attributed to Crawford and other academics, as well as a fabricated quote attributed to a ruling by federal justice Jennifer Davies (misspelled as “Davis” in the original report).
Deloitte Australia has stated that it will repay the final installment of its contract with the government, although the exact portion of the total contract this represents remains unclear. A DEWR spokesperson affirmed that the substance of the independent review and its recommendations remain unchanged.
However, Rudge criticized the report’s foundation, stating that the recommendations cannot be trusted when they are built on a flawed, initially undisclosed, and non-expert methodology. He emphasized that Deloitte’s admission to using generative AI for a core analytical task without proper disclosure raises concerns about the report’s credibility.
Professional firms have repeatedly fell into the AI trap by relying on the technology to provide accurate information. One of the most serious areas for AI hallucinations is the practice of law, where lawyers have cited fictitious case law in legal filings thanks to AI chatbots.
Breitbart News previously reported that one major law firm called this risk ‘Nauseatingly Frightening:’
In an internal letter shared in a court filing, Morgan & Morgan’s chief transformation officer cautioned the firm’s more than 1,000 attorneys that citing fake AI-generated cases in court documents could lead to serious consequences, including potential termination. This warning comes after one of the firm’s lead attorneys, Rudwin Ayala, cited eight cases in a lawsuit against Walmart that were later discovered to have been generated by ChatGPT, an AI chatbot.
The incident has raised concerns about the growing use of AI tools in the legal profession and the potential risks associated with relying on these tools without proper verification. Walmart’s lawyers urged the court to consider sanctions against Morgan & Morgan, arguing that the cited cases “seemingly do not exist anywhere other than in the world of Artificial Intelligence.”
In response to the incident, Ayala was immediately removed from the case and replaced by his supervisor, T. Michael Morgan, Esq. Morgan expressed “great embarrassment” over the fake citations and agreed to pay all fees and expenses related to Walmart’s reply to the erroneous court filing. He emphasized that this incident should serve as a “cautionary tale” for both his firm and the legal community as a whole.
Read more at Ars Technica here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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